After more than two decades of high-altitude mountaineering, Kenya’s higher education sector is finally returning to base camp with near-fatal consequences as the education boom cools off.

A sharp drop in the number of self-sponsored students coupled with a cashflow tsunami forced public universities to call for a Sh20 billion Treasury bailout.

This after a drop in the number of so-called parallel students who incidentally led to the surge in the number of universities across the country, feeding the once buoyant sector.

The last 10 years have seen the number of public universities rise from less than 10 to over 100 as county governments moved to stamp their presence on the higher education market.

Higher education sector has been booming for more than two decades with the private sector also injecting in billions of investments from colleges to universities. Universities as a result started competing with banks and supermarkets for prime office spaces across cities and major towns targetting postgraduate students who could jump from office to class.

Weak business models

However, the advent of Covid-19 has shaken the weak business models of the education sector as most students remained at home while some took online classes. This combined with rapid growth in the number of universities has sucked the steam out of the growth engine.

Last week, Parliament after witnessing the cash crunch news called for the introduction of an integrated data management system among the public universities to monitor the use of funds among the cash-strapped institutions weeks after the World Bank recommended that some of them be merged or shut down.

“Within the next three months, the higher education sub-sector should through the University Funding Board establish and implement the university education data management information system to improve accountability and management of disbursed funds,” Parliament said in the Budget Policy statement.

The sector is struggling with lack of funding and random borrowing that have left them barely surviving and looking for State bailouts. Some universities, according to Parliament, are getting more than they need while others with more students are missing with Egerton university being the most affected.

Funding gap for students in public universities has more than doubled in the past two years, signalling even tougher days ahead for the cash-strapped institutions. Universities have come in the spotlight on increased borrowing to build towers despite their lack of cash and building gates costing nearly Sh100 million.

World Bank late last year called on Kenya to close and merge the cash-strapped public universities and loss-making parastatals.

“Several universities have already written to us and requested for additional funding amounting to Sh20 billion,” Treasury Principal Secretary Julius Muia earlier told the National Assembly Committee on Education.

Muia said institutions that made requests for additional funding include the University of Nairobi, Jaramogi Oginga Odinga, Kisii University, Jomo Kenyatta University of Science and Technology, Egerton University and Kabianga University.

The multilateral financier reckons that Kenya should merge the institutions of higher learning because of duplication of courses and the need to cut spending. The State-owned firms that the bank wants to be closed have turned losses for three consecutive years.

Kenya has 102 public universities and campuses — which posted a deficit of Sh6.2 billion ($55.3 million) in the year to June and received nearly Sh70 billion ($624.9 million) from the Treasury to run their operations.

Public universities

Their merger could help cut their wage bill since the workers are estimated at 27,000 workers, including 9,000 lecturers.

World Bank’s push for the closure of State universities and corporations was part of the advice on post-Covid-19 recovery to the government after the Bretton Woods institution approved funding to the National Treasury.

Data from the Universities Fund (UF) —which guides the allocation of State cash to public universities— shows that the gap has hit Sh27 billion in the current financial year, a 107.7 percent jump from Sh13 billion two years ago.

Capitation per student declined by up to Sh35,616 per student in the period, raising fears that more universities may follow the University of Nairobi in raising tuition and accommodation fees to plug the gaps.

The average allocation per student fell to Sh135,244.88 in the current financial year from Sh170,861. 63 in the period to June last year. Vice-chancellors have since last year been pushing the government to increase fees nearly three times, in a bid to ease the cash flow woes bedeviling the institutions.