Why cash crisis looms at University of Nairobi
There is a looming financial crisis at the University of Nairobi following the decision by the government to reduce its annual funding from Sh6.2 billion in the current financial budget to Sh4.5 starting July 2017.
This is due to the introduction of differenced unit costs (DUC) set to be implemented in July in which funding of public universities will now be based on the cost of running academic programmes instead of the number of students enrolled.
This means universities offering courses such as medicine, dentistry, engineering, architecture and law will receive more cash for tuition compared with those largely offering arts and humanities.
The DUC funding formula is determined by the actual costs of running a programme and ensures universities get realistic financial allocations to fund respective academic programmes.
The University of Nairobi is now warning that the reduction in government funding will lead to staff layoffs, closing of core university programmes and possible shutdown of university operations.
“The implementation of DUC will impact on university budget since it was carried out without university involvement as previously agreed.
“Further, the figures applied for differentiated unit cost did not take into account the university’s input,” states a report by the university.
The report indicates that the university will have a shortfall of Sh1.7 billion per year, which will translate to Sh142 million per month.
“The implications will be inability by the university to fund critical programmes e.g staff costs [of] Sh770 million per month.
“[There are] expected staff costs shortfall per month of Sh392 million as a consequence and this will lead to possible staff layoffs,” states the report.
The new directive is based on the recommendations of a task force on university funding that was chaired by the vice-chancellor of the Technical University of Kenya, Prof Francis Aduol.
The report established that it costs Sh600,000 to train a dentist, while medicine costs Sh576,000, veterinary medicine Sh468,000, pharmacy Sh432,000 and a general art degree Sh144,000.