Machogu: Government owes universities Sh147 billion
Education Cabinet Secretary Ezekiel Machogu has disclosed that the government owes universities an outstanding sum of Sh147 billion. During a meeting with the National Assembly Education Committee, Machogu stated that the owed amount surpasses the PAYE (Pay As You Earn) owed to the Kenya Revenue Authority.
Machogu explained that these debts arose primarily due to the government’s failure to adequately fund universities up to 80% of the Differentiated Unit Cost (DUC), as initially agreed upon. As a result, the government is indebted to universities for Sh147 billion.
As a resolution, the Ministry of Education is proposing that the accumulated PAYE be waived, citing the government’s failure to disburse the Sh147 billion owed to universities. Going forward, the intention is for universities to remit PAYE according to the New Funding Model’s projected sustainability.
Machogu urged universities to provide detailed information about their existing PAYE debts, enabling the government to settle the outstanding dues. Furthermore, he highlighted that universities are also grappling with a separate debt of Sh61 billion, encompassing unremitted statutory deductions, loans, and unpaid suppliers.
The government had adopted the DUC formula for university funding in 2017, with an agreement to provide 80% of DUC per student. The remaining 20% was expected to come from Higher Education Loans Board (HELB) loans and household contributions. However, the government consistently fell short of the agreed 80% DUC funding, reaching a maximum of 66.4% in the 2017-18 Academic Year.
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Machogu emphasized that the government’s DUC contribution declined annually, dropping to 48% in both 2022 and 2023. He elaborated that the new student-centered funding model would allocate funds to students based on their needs, contrasting with the uniform grants universities received under the DUC model.
He predicted that this new approach would increase funds to universities and Technical and Vocational Education and Training (TVET) colleges while incentivizing universities to enhance education quality and attract more students.
Machogu recommended an increase in funding for continuing students to 60% of the DUC, as they were currently receiving 42.6%, amounting to Sh34.1 billion. He asserted that this augmentation would alleviate financial challenges faced by universities.
Machogu: Government owes universities Sh147 billion
