University of Nairobi Faces Financial Crisis as Debts Exceed KSh 13b
- The University of Nairobi (UoN) is struggling to stay afloat as its debts continue to pile up, exceeding KSh 13 billion
- UoN acting vice chancellor Margaret Jesang Hutchinson revealed that student enrollment in the university's campuses has dropped
- The institution's debts include KSh 7.8 billion in pension arrears and KSh 4 billion owed to the Kenya Revenue Authority (KRA)
Japhet Ruto, an editor at TUKO.co.ke, brings over eight years of expertise in finance, business, and technology, providing valuable insights into economic trends in Kenya and globally.
The administration of the University of Nairobi has admitted that the public institution is in financial trouble, with debts totalling more than KSh 13 billion as a result of inadequate funding from the Ministry of Education.
Source: Twitter
Why UoN is facing a financial crisis
The issue has gotten worse due to a widening gap between the university council and the acting vice-chancellor, Margaret Jesang Hutchinson.
The acting VC alleged that important decisions, such as staff terminations, have been made by the council without consulting her.
On Tuesday, April 1, the National Assembly's Education Committee, chaired by Tinderet MP Julius Melly, visited the institution to investigate the causes of its administrative and budgetary issues.
"We noted with concern that despite receiving salaries directly from the exchequer, the university continues to struggle with outstanding bills amounting to over KSh 13.6 billion. Additionally, the institution operates an opaque human resource system, with many key managerial positions held in an acting capacity for extended periods and the creation of roles not aligned with statutory requirements," Melly disclosed.
Breakdown of UoN's pending bills
The university's management, led by Jesang, opened up on the reasons behind the problems facing the institution.
UoN's debts include KSh 7.8 billion in pension arrears and KSh 4 billion owed to the Kenya Revenue Authority (KRA).
"Our debts keep piling up, including KSh 194 million owed to suppliers and KSh 315 million owed to ABSA Bank," Jesang revealed.
The institution needs KSh 800 million monthly to pay its employees and is currently staying afloat due to external support.
Source: Facebook
Due to a sharp drop in student enrollment, its campuses in Kisumu and Mombasa are lying idle. The university has been forced to rent out some sections of its campuses.
"The government only disburses KSh 100 million every month, although our payroll requires KSh 800 million. We don't have any students in Kisumu or Mombasa," Jesang stated, as reported by Citizen TV.
The university also disclosed that between 14 and 20 senior management posts were created illegally.
UoN lawyer Fredrick Omondi noted that the university does not have the necessary paperwork for the employees who were assigned to the positions.
Why Moi University faces similar problems
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Earlier, TUKO.co.ke reported that Moi University lecturers threatened to strike over the pending payment of their salaries.
The University Academic Staff Union (UASU) issued a warning that the institution's academic operations could be halted.
Another source of contention was the university's alleged noncompliance with the return-to-work formula agreement, which was signed in November 2024.
The institution sacked over 300 workers, citing high operating expenses.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
