Kenya’s higher education system is at risk of collapse as the government grapples with a severe financial crisis. Treasury Cabinet Secretary John Mbadi issued a clear warning, indicating that public universities may be forced to implement drastic measures, including staff layoffs and the closure of satellite campuses, due to a significant funding shortfall.
“We have been living a lie for a long time since we send our kids to universities for free education without any financial support,” Mbadi stated, emphasizing the unsustainability of the current system. He revealed that the government owes some universities over Ksh4 billion, accrued from educating students for free since 2016, with little prospect of clearing the debt.
The announcement has sparked widespread concern among lawmakers, education stakeholders, and the public, with many fearing a detrimental impact on the quality and accessibility of education across the country.
The financial challenges are extensive, with the Treasury facing an KSh 876 billion fiscal deficit despite the education sector receiving the largest share of the 2025/2026 national budget at KSh 702.7 billion. Mbadi explained that revenue constraints, rising student enrollment, and growing debt obligations have stretched the government’s fiscal capacity, leading to a reduction in secondary school capitation grants from KSh 22,244 to KSh 16,900 per student. Public universities alone face a staggering funding shortfall of KSh 58.8 billion.
The proposed reforms, which include restructuring institutions to cut administrative expenses, right-sizing staff, and outsourcing non-core services, aim to ensure financial sustainability. However, these measures are met with strong opposition from university staff unions, who have threatened industrial action if the government fails to address their concerns. Moi University, for instance, has already laid off 376 staff members, citing an KSh 8.8 billion debt crisis, a move that has drawn scrutiny from Members of Parliament regarding its legality and fairness.
Education Principal Secretary Beatrice Inyangala further stated the severity of the situation, revealing a KSh 12.3 billion funding gap for the 2023 KCSE cohort alone, with many students remaining unfunded. The crisis extends to scholarships, with a KSh 11.2 billion deficit, and a significant backlog of pending bills.
