MPs give UoN until December 1 to submit recovery plan over Sh20 billion debt

University leaders appeared before the National Assembly Public Investments Committee on Governance and Education at Bunge Tower. MPs rejected general promises of financial recovery and demanded figure-backed proposals.

The administrators were questioned on multi-billion-shilling deficits, unremitted statutory deductions and mounting pension liabilities.

Reviewing Auditor-General Nancy Gathungu's reports covering the 2020/2021 to 2024/2025 financial years, the MPs were told the university posted an operational shortfall of about Sh2.2 billion for the year ended June 30, 2022. This took its accumulated deficit to Sh8.8 billion.

Unpaid taxes and overdue pension contributions have also grown to Sh10.6 billion, raising concerns over the welfare of former employees who depend on their retirement benefits.

University management attributed the liquidity crisis to rising payroll costs and a Sh1.6 billion annual funding gap. It said the gap arose when the government introduced the Differentiated Unit Cost model in the 2017/2018 financial year.

The Auditor-General issued a qualified audit opinion, raising doubts about the university's ability to continue as a going concern.

Vice-Chancellor Prof Ayub Gitau told the committee that despite the liquidity problems, the university is backed by a large asset portfolio. He said it holds debts of about Sh20 billion against assets of more than Sh220 billion.

He added that management was exploring ways to commercialise assets, lease properties and tighten internal cost controls.

The committee chairman, Luanda MP Dick Maungu, rejected the argument. He said creditors owed money care little about land and property valuations, and asked the vice-chancellor to present practical steps rather than general statements about the university's landholdings.

MPs also raised concern over university-owned commercial enterprises that were operating at a loss instead of generating additional revenue.

Embakasi West MP Mark Mwenje warned that technical insolvency threatens the reputation of Kenya's leading public university. Sotik MP Francis Sigei and Central Imenti MP Moses Kirima asked for verifiable figures showing that austerity measures were delivering actual savings.

Deputy Vice-Chancellor Prof Josiah Aduda acknowledged that liabilities exceed assets for the period under review, making the institution technically insolvent.

He said a comprehensive asset commercialisation policy is awaiting approval by the university council, and promised a full recovery proposal within a month.

Maungu directed university management to submit a comprehensive, figure-backed financial recovery plan by December 1, 2026.