There is fear of a financial crisis at the University of Nairobi following a decision to slash the annual funding to the institution by Sh1.7 billion.
The Ministry of Education in the current budget has reduced the funding to the learning institution from Sh6.2 billion in the last financial year to Sh4.5 billion in the 2017/18 financial year.
Sources say this reduction is informed by the introduction of the Differentiated Unit Cost (DUC) by the ministry, which is set to be implemented in July.
Funding of public universities will be based on the cost of running academic programmes with respect to the number of students enrolled in each programme.
According to a confidential UoN risk analysis report seen by The Standard, the administration of premier learning institution, is warning that the proposed reduction of State funding will lead to massive staff lay-offs and disruption of core university programmes.
In addition, according to the report, there will be difficulties in payment of salaries and remittance of statutory obligations on time and a possible shutdown of other essential operations at the university.
"The implementation of the DUC will impact on university budget since it was carried out without university involvement as previously agreed. Further, the figures used in calculating the DUC did not take into account the university's input," reads the report.
The report indicates that the institution will have a shortfall of Sh1.7 billion annually, which will translate to Sh142 million monthly.
A recently released Webometrics rankings placed UoN at position one in the country and in East and Central Africa.
In the last five years, the institution has consistently posted excellent results in world rankings.
"The implication will be inability to fund critical programmes, for example, staff costs which amount to Sh770 million monthly. There is bound to be a shortfall of Sh392 million, thanks to this reduction. This amount would cater for staff costs," adds the report.
Universities were among education institutions in the country that received the lion share of the 2017/2018 budget.