President William Ruto’s government will be facing a headache next year about continued university funding while simultaneously implementing hard-hitting university reforms being pushed by the International Monetary Fund (IMF).
The Head of State has promised to continue meeting IMF conditions throughout the medium term following the lender’s approval of a $433 million loan that will be disbursed next month for budgetary support.
Some of these conditions, which were initially placed in 2021 when the country first tapped the 38-month IMF loan facility, will be seeking to reform financial-troubled public universities, which the lender says carries the biggest financial risks to the government.
These preconditions cut across other areas, including an increase of tax collection, signaling that heightened austerity measures will usher in the New Year. A consortium of about 24 civil society organizations under the Okoa Uchumi Campaign umbrella that is seeking fiscal justice on the back of Kenya’s debt management measures now says reforms at the institutions must be pegged on proper governance while protecting the poor students.
“Reforms should be geared towards improving governance in these institutions while safeguarding the objective of access to education by poor students. Any reform must be carefully evaluated given that universities play a critical role in human capital development,” they said in a review of the IMF-Kenya fiscal consolidation program.
The management of universities have several times turned to the government for bailout whenever lecturers strike. Already, budget cuts and reforms are reverberating in most institutions like Moi University and the University of Nairobi which are juggling to increase school fees, trim workforce, consolidate courses, and shut down some satellite campuses to stay afloat.
The move is seemingly in response to the IMF’s push and the National Treasury’s call in July 2022 that asked the Ministry of Education to start reviewing university fees. This, which was followed by another letter dated 1st November 2022 from the exchequer to all Ministries, Departments, and Agencies (MDAs) requesting them to cut expenditures, could further impact the delivery of higher education services.
But in a separate media briefing after launching the 2023/24 budget preparation process, the Cabinet Secretary for the National Treasury professor Njuguna Ndung’u maintained that the IMF-Kenya agreement is the best but the country will still not bow to pressures to cease university funding.
His response is in tandem with President Ruto’s election campaign which promised the education charter an increase of the current capitation for both university and technical and vocational education and training (TVET) education.
However, various government agencies are seemingly not reading from the same page, revealing the loud confusion that has rocked the education funding agenda amid IMF’s push for fiscal consolidation. Education Cabinet Secretary Ezekiel Machogu recently said that the government will end university funding but later withdrew the statement.
Other education sector players such as the cash-crunched University Fund Board (UFB) and Higher Education Loans Board (HELB) have also insistently called on universities to generate their own revenue to relieve the national exchequer, which has been slashing budgetary allocations since 2019.
“Capable parents should be asked to pay for the fees and government to fully shift to fund only needy, bright students,” UFB Chief executive Geoffrey Monari recommended in August. Public Universities collectively have about KES 56 billion debt owed to various state agencies such as Kenya Revenue Authorities and part-time lecturers, according to Mr. Monari.
Now, should the government proceed to increase university funding, as promised by President Ruto, it risks irking IMF. And on the flipside, leaving the universities in their current dire financial state or slashing the funding could make higher education too costly for the majority.
Okoa Uchumi Campaign organizations insist that there is a big disconnect between the IMF-backed reforms and the rife inequality affecting citizens. For instance, should the government cut university funding, students will be forced to dig deeper into their pockets to pay lecturers, meet their living expenses, and other additional costs like stationery budgets.
“The review reports by the IMF show a largely macro-economic picture of the progress of the economy ignoring the reality on the ground that more and more Kenyans are sinking into poverty and that inequality on all levels keeps increasing,” Okoa Uchumi said in a memo during a meeting with the IMF on the fourth review of Kenya’s fiscal consolidation program.
In the current 2022/2023 budget, the government capitation meets about 40% of each student’s cost of undergraduate courses against the required 80% support. University Education was allocated KES 91.2 billion in the current budget, against about KES 115 billion it had requested.
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