Government plans biggest funding hike in years

Kenya plans to up financing of public universities by 10% in the coming fiscal year, which begins in July – the biggest funding rise in three years, but still far shy of the surging thirst for funds in expanding institutions.

The government allocation to state-funded universities is to increase from the current year’s US$627.2 million to US$692.7 million in 2015, according to a budget paper prepared by Treasury that was published this month.

Only 10% (US$70 million) will go into funding development expenditure while the balance will be gobbled up by recurrent costs.

This means that the government is unlikely to end the ongoing problem of infrastructure deficit that continues to constrain growth of Kenya’s higher education sector and has become a major challenge for the government.

Student numbers have more than doubled in the past four years to a current 320,000, with the biggest strain being put on Kenya’s 31 state-funded higher education institutions.

The number of students enrolled in both public and private universities has continued to increase at a faster rate than revenue streams to institutions.

Public universities responded by introducing self-sponsored, ‘Module II’ programmes – private, fee-charging courses – but this led to overstretching of physical facilities and decreased educational quality. There has been rapid establishment of new university colleges across the country – but they are also underfunded.

“Funding higher education has emerged as one of the biggest concerns in Kenya, with the surge in student numbers. Government subsidies are no longer enough and universities are going into commercial activities,” Professor David Some, secretary of the Commission for University Education, told reporters in Nairobi recently.

“Kenyan families sacrifice so much for higher education and on analysis contribute more than the government in funding this public good. The cost is an issue.”

Student loans not enough

The number of government-sponsored students admitted to public universities increased from 32,648 in 2011 to 56,938, and the number of students benefitting from loans disbursed by the Higher Education Loans Board, HELB, rose from 105,850 to 144,785.

“However, there is a constraint on HELB’s ability to provide loans to the increased number of students, thus the need to increase funding to HELB,” said the Treasury in the document.

Government statistics show that the total amount disbursed for undergraduate loans increased from US$49.7 million in 2012 to US$68.5 million in the current fiscal year. During the same period, postgraduate loans also increased from US$2.6 million to US$4.5 million.

But the amount allocated per student is too low – an average of US$411 – compared to the high fees charged by universities per semester, estimated at US$700. HELB is expected to increase the average amount from the current allocation per student to US$555 annually.

In the current fiscal year 2014-15, HELB intends to fund 215,739 students at a total budget of US$95.5 million. This is expected to rise to 307,984 students at a total budget of US$141.3 million in the 2015-16 financial year which begins in July.

“The target was to ensure 30% coverage of students at the university level and that they are financed adequately to cover at least 50% of the annual fees cost. However, this is not feasible given the scarcity of resources. This will require mobilisation of alternative resources to cover the gap,” said the Treasury paper.

Universities worried

University administrators are worried about the sluggish growth in state subsidies.

“I urge the government to extend support in providing more capitation to the University of Nairobi to at least cater for the payroll so that the university can free its funds for development projects,” said outgoing University of Nairobi Vice-chancellor George Magoha, who retired at the end of December after being at the helm for 10 years.

“As it stands, the university supplements its payroll to the tune of US$3.3 million every month. This situation is not sustainable as the wage bill grows every year and the traditional source of revenue, which is fees from Module II programmes, will soon plateau.

“Universities offering courses that require more resources should be financed at a level that is commensurate to their running costs, as opposed to uniform funding for all government-sponsored students.

“If adopted, the unit cost based funding will plug the deficit that has continually affected universities offering courses that require a lot of investment in learning materials and personnel,” said Magoha, who has now been replaced by Deputy Vice-chancellor Peter Mbithi.

More money needed

The rise in student numbers has been buoyed by an increase in the number of public and private universities, which grew from 58 in 2011 to 68 now – comprising 22 public chartered universities including three technical universities, nine public university constituent colleges, 17 private chartered universities, 12 universities operating with letters of interim authority, five private university constituent colleges and two registered private universities.

Kenya’s first free primary education cohort will transit to tertiary education in 2015. This initiative launched in 2003 by former president Mwai Kibaki has contributed to massive increases in school enrolments, which will translate into a surge of tertiary demand in the coming years and strain already overstretched university facilities.

“The government recognises the need to scale up expenditure to ensure better access to education as well as better implementation of programmes-projects,” said a document by Education Secretary Professor Jacob Kaimenyi, produced to aid budget preparation and seen by University World News.

“However, the resource envelope still remains constrained when measured as a share of overall government budget, and as a proportion of gross domestic product, and in per capita terms.”

Challenges

According to policy-makers in the Treasury and Ministry of Education, other challenges that confront university education in Kenya include inequalities, inadequate capacity to cater for growing demand for more university places, and a mismatch between skills acquired by graduates and the demands of industry.

“There is an imbalance between the number of students studying science and arts based courses, gender and regional disparities in terms of admissions and in subjects and courses undertaken, and inadequate household income as a barrier to students who have qualified and been admitted to university,” said the Treasury document.

“At the university level there is a shortage of staff qualified with PhDs, which is likely to compromise the quality of education at this level. The limited availability of financing has rendered universities unable to recruit additional qualified staff.”

In a policy document prepared for the 2015-16 budget, the Ministry of Education highlighted weak links between universities and industry, including in formulation of the curriculum.

“Universities therefore train graduates who are not relevant to the labour market. This mismatch between demand and supply of labour has led to unemployment and low productivity.”