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September 19, 2018

How broke public universities can change fortunes

University of Nairobi Towers on January 31, 2017. Photo/Monicah Mwangi
University of Nairobi Towers on January 31, 2017. Photo/Monicah Mwangi

Public universities in Kenya generate most of the elite brains in the society. But for close to a decade, they have been struggling and sliding deep into debt.

Tabling a report before Parliament last year, auditor general Edward Ouko said the liabilities of 11 public universities exceeded their assets.

These include University of Nairobi, Jomo Kenyatta University of Agriculture and Technology, Pwani University and the University of Eldoret.

Like any other business that is not profitable, the quality of service in universities is also affected. This has led to the emergence of “half-baked” graduates.

The universities rely on students’ fees and funding from the government, but they used to get a fair share of revenue from student enrolment through the Module 2 (parallel) courses.

However, the market for new students is highly competitive, and universities can no longer rely on traditional marketing tactics to hit enrolment goals and generate revenue.

All 31 public universities missed enrolment goals of increased first-year students and tuition revenue for the 2016 academic year, according to the Kenya Universities’ and Colleges Central Placement Service.

So it’s high time they started exploring new ways to generate revenue from their resources to become self-sufficient.

UNDERUTILISED ASSETS

David Some, retired CEO of the Commission for University Education, believes universities remain underutilised in terms of financial generation.

While some universities have long-running businesses, industry partnerships and facilities, what they generate does not match the resources they own, Some said.

He said for a university to have a successful industry partnership, it must cultivate an open culture that welcomes industry experience.

These partnerships serve a double purpose of giving students career experience, while shoring up the budget. To build this culture, the professor said universities should focus on four areas: establishing the unit cost of operations, capitalising on non-core functions, research, and talent and sport management.

University and Academic Staff Union secretary general Constantine Wasonga said the key to self-sustenance is research.

Last year, Kenya was ranked number 80 in the Global Innovation Index. The government earmarked 2 per cent of its GDP to support research and innovations.

Wasonga said if universities invested in quality research, their patents would generate revenue for them, which unfortunately is not happening. He said this is because either the universities are not monetising their patents or they are not monetising them the right way.

This means patent portfolios of many universities are like an underutilised asset, as few universities earn by selling or licensing their patents.

Giving the example of University of Nairobi, Wasonga said administrators should consider the primary customers for their product or services.

“University of Nairobi is renowned for producing the best doctors not only in the region but in sub-Saharan Africa. But most of these doctors’ research works have not been used as a source of wealth because the university is not providing adequate resources to conduct a research, so the doctor ends up looking for outside sources to help them,” Wasonga said.

The National Research Fund, in its 2016-17 financial year, revealed that less than 20 per cent of funds allocated for research was taken by the universities, while only 2 per cent of total university revenues ends up being allocated to research.

The research funds cover three areas: Postgraduate category (master’s and PhD), multidisciplinary and multi-institutional category, and the infrastructure category.

Under NRF funding, master’s students receive Sh500,000 each to help them in their research, while PhD researchers receive Sh2 million.

“Scholars in our universities conduct research for their ‘resumes’ and it will never be put into practice,” Wasonga said.

UNIT COSTS

Different courses demand different funds to run them, but each unit studied in the course also varies in the amount of resources it requires.

However, the government funds university education via a wholesome capitation to each student, while the remaining tuition fee is paid by students.

Some said universities need to establish the cost of running units in various disciplines to determine the accurate amount required to run a whole course.

Art courses being popular attract the lowest tuition fees compared to science and technical courses in universities.

Each academic year costs approximately Sh120,000 for parallel students and Sh30,000 for those government-sponsored in public institutions.

Kenyatta University charges Sh22,000 for government-sponsored students, and Sh100,000 for parallel students in arts programmes, with UoN at Sh28,500 and Sh154,500 for the same.

It costs Sh39,500 the whole year for a journalism student under the government sponsorship programme and Sh128,000 for a self-sponsored student.

For the education course, it would cost a parallel student Sh90,000 and a government-sponsored student Sh28,000.

On the other hand, medicine will cost Sh48,000 per year for government students, while parallel students part with Sh150,000 per year.

But universities have failed to link courses offered with revenue generation, according to Charles Mukwaya, secretary general of the Kenya University Staff Union.

“Universities have an option to generate revenue not only to sustain some courses but also cater for other expenses arising from the university,” he said.

He said options include investing in hotels, hostel facilities, conference facilities, hospitals for schools undertaking medicine and health sciences (such as University of Nairobi), buildings to lease and let, and publications for those teaching education.

SPORTS, TALENT MANAGEMENT

The average age of Kenyans who represented the country in the Rio Olympics games was 29 years, while that of the United States of America was 22 years.

Out of the participants representing Kenya, only two were students from universities, compared to their US counterparts, made up of 38 per cent student participants.

Prof Some said in the US, when you’re an accomplished high school athlete, hundreds of schools vie for your attention in enrolment.

Consequently, the students’ talent ends up generating revenue to the institutions through partnerships, endorsements and sponsorships.

“We are poor sports and talent managers. Most institutions in the country have very poor facilities when it comes to anything surrounding gaming or talent activities. It is an intellectual property like any other property. It should generate revenue,” Some said.

Another potential source of revenue is alumni. While in Kenya few alumni associations have trust funds to help the institutions, in developed countries, this is a popular practice that generates a substantial amount of revenue.

Uasu secretary general Constantine Wasonga said alumni need to be enticed to contribute. Just as students do with recruitment and enrolment, alumni should feel as though they have been specifically sought after and personally communicated with, he said.

“When equipped with the right data on your targeted audience, you can better seek donations using personalisation and share updates on your university about areas of interest, past and upcoming events, big games, advanced degrees and more. The alumni will donate to the school kitty and support some areas,” Wasonga said.

The Uasu official also called for merging and dissolving of some universities that don’t make economic sense to cut down on costs.

RESOURCE UTILISATION

UoN deputy vice chancellor (finance and administration) Prof Isaac Mbeche acknowledged that some quarters have fronted merging as a means of reducing university expenditure, but said it was not an option.

He said even though public universities can do without state funding, they need to expand and explore new revenue sources to sustain their operations.

Mbeche called on universities to introduce short course programmes that target the needs of counties or devolved units of governance.

They should come up with studies that will help develop the capacity and skills in counties to steer growth and overcome emerging problems, he said.

Offering consultancy services, he said, is a new area that universities can exploit to generate revenue.

“This is an area that has full potential to generate massive revenue. But unfortunately, unlike other countries like Tanzania, where all government consultancies are conducted by institutions of higher learning, here it’s been left to foreigners and private firms,” he said.

He also proposed a funding model that targets the cost of unit and caters for postgraduate programmes as a means of overcoming the financial problems afflicting universities.

In April, Education CS Amina Mohamed formed a nine-member team to review governance and human resource management policies, practices and staffing.

The team, led by University Education PS Micheni Ntiba, was also tasked with assessing student enrolments for undergraduate and graduate programmes, to advise on availability and adequacy of teaching, learning and accommodation facilities.

It would also analyse the success and problems of parallel course in the development of university education and training.

The CS said some universities have weak management. She questioned the quality of undergraduate and postgraduate teaching, accusing some lecturers of laziness. “There is increasing lethargy among teaching staff, most of whom seldom attend lectures,” she said.

Amina also raised the red flag on handling of finances. “There are ongoing investigations into alleged diversion of resources meant for statutory payments into other purposes,” she said.

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