Treasury Cabinet Secretary John Mbadi has told the National Assembly Committee of Education that the government’s commitment to free public education may no longer be financially sustainable.
- •Though no formal policy reversal has been announced, capitation shortfalls, staggering disbursements, and widening funding gaps indicate that the system is entering a phase of obvious strain.
- •At the center of the shift is a revised funding structure that caps secondary school capitation at KSh 16,600 per student, significantly below the KSh 22,244 benchmark established when the free day secondary education program was launched.
- •The reduction, attributed to fiscal constraints, is being executed through incremental releases of 50%, 30%, and 20%, forcing schools to rely on parental contributions to fill the deficit.
“Due to constrained fiscal space and other emerging priorities within the education sector, updating these rates might be untenable. The government will, however, consider reviewing this rate should revenue performance improve,” CS Mbadi said.
This approach marks a departure from the past, when the state underwrote virtually all operational costs of public schools. Enrollment growth has outpaced the budget and repeated delays in disbursements have turned many schools into debt-burdened institutions unable to meet their termly obligations on time.
Audit reports have revealed that billions of shillings have been misdirected to non-existent schools or funneled to institutions with inflated student populations. Systemic flaws in the National Education Management Information System have allowed fraudulent entries to persist, complicating efforts to match funds with actual learners.
Why it Matters
Mbadi’s comments before the National Assembly’s Education Committee reflect a growing acknowledgment within government that the current model is fiscally untenable. The implication is that while the policy of free education remains officially in place, its operational foundation is weakening. Disbursements are no longer sufficient to cover school running costs, and the shortfall is increasingly passed on to households.
The Ministry of Education disbursed KSh 22 billion in capitation funds for Term 2, offering temporary relief to schools facing cash flow strains after weeks of delays. Secondary schools received the largest share at KSh 11.6 billion, while the rest was allocated to junior, primary, and special needs institutions.
Technical and vocational colleges report a funding deficit of KSh 12.5 billion, further straining a sector seen as key to reducing youth unemployment. Meanwhile, CS Mbadi has proposed radical austerity reforms for universities buckling under the weight of debt and mismanagement, including staff layoffs and closure of satellite campuses.
The MPs also queried government officials about the new student data system, KEMIS, intended to replace the NEMIS platform, citing inefficiencies and data integrity issues. In response to these concerns, the Education Ministry said it is revising its management systems, but administrative fixes may not solve a deeper budgetary problem.
The education sector received the largest allocation in the 2025/26 national budget, with Treasury CS John Mbadi setting aside KSh 702.7 billion to reinforce basic, secondary, and higher education.
Despite this 12% year-on-year increase in budgetary allocation, the education sector has a flurry of obligations that the government is finding difficult to settle. The rising costs of teacher hiring, expanded CBC demands, and inflation erode the impact of the increased funding.