Egerton varsity future bleak as it chokes under Sh6 billion debt

Egerton University is staring at a bleak future over a debt totaling over Sh6 billion. The debt is partly to blame for the ongoing two-month strike by lecturers.

The university’s vice-chancellor Prof Isaac Kibwage told The Standard that the institution is grappling with a Sh77 million deficit for its payroll alone every month due to underfunding.

“The university is broke. Any time we close, the situation gets worse. We are not talking about little money. As of September last year, Egerton had a debt of Sh6.1 billion,” said Kibwage. “The figure continues to rise because some of these debts have compounded interest. We have raised the matter with the Ministry of Education and the Treasury has been informed.” 

The University Senate after a sitting on Friday last week announced the immediate reopening of the institution which was shut on November 26 last year following a lecturers’ strike. The dons who have been on strike since November 12 are demanding the implementation of a nationally agreed 2017-2021 Collective Bargaining Agreement (CBA).

They are also demanding salary arrears accrued last year when the university slapped them with a 40 per cent pay cut as an austerity measure at the height of the Covid-19 pandemic.

Kibwage said that a section of lecturers had expressed their willingness to resume teaching as the agricultural university seeks solutions.

“Some staff understand the crisis we are in and agreed to go back to class. We have assured them of their security as we get the university back on its feet,” said Kibwage.

The move comes days after the university suspended 14 lecturers who are officials of the University Academic Staff Union (UASU) for leading the strike.

He dismissed claims of weakening the union by suspending their leaders saying that those going back to their duties were not under pressure.

“We are not strangling the union. You can’t flout regulations just because you are in the union. It is on that basis that we suspended them. Some of them sit in the disciplinary committee too and shall be part of the process,” he said.

“This is not intimidation. Before they are union officials, they are lecturers. We only suspended the 14 because in every institution there has to be someone who bears the biggest responsibility.”

He explained that the university was engaging the Ministry of Education for more funding that would see it downsize the staff who gobble up millions of shillings in salaries. “We wrote to the Ministry requesting Sh1.5 billion for right-sizing our staff. Payroll is our biggest expenditure. When contracts expire, we no longer renew them,” he said.

Kibwage said that reduced budget allocations to institutions of higher learning was partly to blame for Egerton’s woes. He noted that they can continue sinking into more into debts. “Each month we spend Sh251 million on salaries. The university receives Sh174 million in the continued budget cuts. Our income-generating units can’t bridge the deficit,” he added.

He added that the university started going off the tracks in 2017 when it underquoted its enrolment through Kenya Universities and Colleges Placement Service (KUCCPS).

“It started by giving the wrong statistics. There was a difference of 3,822 students. This meant that we could not get funding for the students,” said Kibwage.

The challenges got worse in 2018 when nearly Sh1 billion from the National Treasury meant for Egerton University was channeled to another public university under unclear circumstances.

“Money meant for the 3,822 students never came to Egerton. It had been disbursed elsewhere when our officers went to have the anomaly corrected. That was Sh935 million,” he added.

Among the debts sucking life out of the university include a Sh856 million tax debt which Kibwage said they had reached an agreement to pay in monthly instalments.

“We have been paying Sh10 million per month to Kenya Revenue Authority (KRA) since September 2019. The balance is now less than Sh500 million exclusive of interest. Once we complete the principal amount, we shall ask them to forgo the interest,” said Kibwage.

He added that the institution has taken short term measures to resolve certain conflicts such as remitting statutory deductions to the relevant bodies but was not yet in a position to pay full salaries.

“We are still paying them 60 percent. That is the only money that is available. It is reflected on their payroll that we owe them and the arrears shall be paid when we are stable. We have started remitting all statutory deductions in January,” he said. “The lecturers claim they will resume duties when they have full pay. This is a bankrupt university. Why should we pay them for not working? The Employment Act does not obligate us to pay for work not done. Whether the strike is legal is a matter in court.”

Prof Richard Mulwa, the Deputy Vice-Chancellor in charge of Administration, Planning and Development said that the university’s income-generating units (IGUs) have also lost their productivity.

“Some IGUs went into disuse and we need money to modernise them. We are trying to revamp them to increase our own source revenues to bridge the gap arising from underfunding,” said Mulwa.

The IGUs are products from students’ practicals, a dairy plant, a turtle park, students accommodations among other agricultural activities.

Dr Grace Kibue, the UASU Egerton chapter Secretary disputed claims that some of of their members had offered to resume duties. “We thank our members for heeding our call and advisory not to teach until the strike is resolved,” said Dr Kibue.