The University of Nairobi (UoN) has told Parliament that its outstanding debt stands at about KSh 20 billion, Pulse Live Kenya reported. Vice-Chancellor Professor Ayub Gitau gave the figure to the National Assembly's Public Investments Committee on Governance and Education. The committee is examining whether the university can meet its obligations.
The university reports assets worth more than KSh 220 billion. Lawmakers asked why an institution with such valuable property is struggling to pay creditors. Owning property does not mean having the cash to pay salaries, suppliers and pension contributions when they fall due.
Management partly blamed a cut in government funding. The cut followed the introduction of the Differentiated Unit Cost (DUC) model in the 2017/2018 financial year. DUC sets funding based on student numbers, courses offered, staff costs, infrastructure and the cost of running programmes. Acting Director of Finance Stephen Kimeli told MPs that the switch left a capitation gap of about KSh 1.6 billion. The university said this hurt operations as payroll costs kept rising.
MPs also raised concerns about unpaid pension contributions and other statutory obligations. When pension deductions are remitted late, staff do not receive the money in their retirement schemes on time. The committee questioned losses at some of the university's income-generating units. These units are meant to supplement tuition fees, government funding and research income.
Auditor-General reports for the 2020/2021 to 2024/2025 financial years are also under review. Statements for the year ended June 30, 2022, received a qualified audit opinion. The auditor also flagged a material uncertainty over whether the university could keep operating. Officials told MPs that the university was classed as technically insolvent for that year because its liabilities exceeded its assets. Pulse noted that the finding applies only to that audited period, not to the university today.
To raise money, management plans to rent and lease selected property. A committee led by the Deputy Vice-Chancellor in charge of finance is reviewing asset valuations. Other measures include enrolling more students, reviving commercial units, expanding research and tightening spending controls.
The parliamentary committee was not satisfied with a plan that leaned mainly on austerity and property. MPs want verifiable financial targets, a clear timetable and practical steps to cut the debt. UoN must submit a report on its recovery measures by December 1, 2026.