Nov 28, 2021

Mawazo Writing Africa

Writing about the main

Cash-strapped Kenyan varsities face closure in World Bank loan deal

Kenya has come under pressure from the World Bank to shut down and merge insolvent public universities and loss-making parastatal corporations, which would cause thousands of civil servants to lose their jobs.

The multilateral financier expects Kenya to die Universities should merge due to duplication of courses and the need to cut spending.

The state-owned companies the bank plans to close have lost three years in a row.

Kenya has 102 public universities and universities, which recorded a deficit of Ksh 6.2 billion ($ 55.3 million) for the year through June and received nearly Ksh 70 billion ($ 624.9 million) from the Treasury to run their operations The amalgamation of universities and campuses and the review of academic courses mean the institutions will have to lay off some staff. Public universities have an estimated 27,000 employees, including 9,000 faculty.

The World Bank’s call to shut down public universities and businesses was revealed in a statement to the government after the fund’s board of directors raised billions in loans Schilling had approved in support of supporting the country’s budget and helping the economy recover from the effects of the Covid-19 pandemic.

“Combat the proliferation of SCs [state-owned companies] and commercial and non-commercial Streamline SCs. For example, measures to address overlapping mandates and consolidate SCs in the education sector could improve the efficiency of public spending on higher education and reduce spending pressures, “the World Bank said in the Kenya State Corporations Review.

” An acceleration the rationalization agenda for commercial SCs could help contain losses in the treasury while increasing overall economic efficiency. A focus could be placed on systematically underperforming SCs that have recorded sustained losses over a longer period of time (e.g. in the last three consecutive years). “

As a result, public universities have become financially in recent years under pressure to expand rapidly amid a decline in student numbers.

They are expected to go through reforms to cut their costs in order to make them financially viable.

The number of public universities and campuses rose from 49 in 2010 to 204 in 2017 before dropping to 102 last year.

Since 2016, several campuses across the country have been closed after the number of undergraduate students cut which adversely affected the lucrative parallel degree programs in which students paid fees based on market prices.

Universities were the hardest hit by the decline in P Kenyan Certificate of Secondary Education exams, who achieved the grade C + and higher required for university entrance, which further worsened their cash flow Schilling brought in.

Huge pay slips

The shortage of money at universities was also compounded by the introduction of the Differentiated Unit Cost (DUC) model, which led to a reduction in government costs at large universities.

This created a huge wage gap and an accumulation of debt.

Universities, some. Their campuses include Kisii, Laikipia, Moi and the Jomo Kenyatta University of Agriculture and Technology.

The World Bank is aiming to accelerate the closure after the performance of top public universities is reflected.

The World Bank and the International Monetary Fund (IMF) are expected to play a role in shaping policies that would require the government to implement tough terms in many sectors.

That is coming now the back of their multi-billion dollar credit facilities to Kenya, where money goes straight into the budget to top up the public purse.

Under the administration of former President Mwai Kibaki, Kenya stayed away from this type of loan, with the Most of the money from institutions like the IMF and the world came in the form of project support.

The University of Nairobi (UoN) and Kenyatta University (KU) recorded together n A Ksh 4.3 billion ($ 38.3 million) financial deficit, underscoring the cash flow problems that saw them try to raise tuition fees.

The Treasury Department announced to Parliament last week that UoN had a deficit of Ksh 2.17 billion ($ 19.3 million) for the year to June, up from Ksh 1.62 billion ($ 14.4 million) a year earlier .

The deficit of KU decreased from 1.3 billion Ksh ($ 11.6 million) to 2.13 billion Ksh (19 million US dollars) during the reporting period, with the institute reliant on short-term loans was to fund its business.

The recent revelations underscore the profound financial difficulties faced by the country’s institutions learning.