MPs question UoN's management over insolvency, Sh20bn debt

Luanda MP Dick Maungu during a committee sitting at Parliament on September 15, 2026. [Boniface Okendo, Standard]

The University of Nairobi (UoN) has been tasked with providing concrete measures they intend to put in place to clear a whopping Sh20 billion debt, in addition to restoring the institution’s financial stability.

This came as an audit report found the university technically insolvent, with MPS now challenging the management to provide verifiable figures and firm timelines for its financial recovery.

The National Assembly Public Investments Committee on Governance and Education, questioned the university’s management over its financial position during a review of the Auditor-General’s reports covering the 2020/2021 to 2024/2025 financial years.

The committee was concerned over UoN’s accumulated deficits, outstanding statutory obligations and pension contributions, as well as losses reported by some of its income-generating units.

Auditor-General Nancy Gathungu’s report has shown that UoN’s financial statements for the year ended June 30, 2022, attracted a qualified audit opinion, with a material uncertainty relating to its ability to continue operating as a going concern.

But the MPs raised questions about the university's ability to meet its financial obligations despite holding valuable assets.

Vice-Chancellor Prof Ayub Gitau admitted to financial challenges but stated that the university is still a premier institution with a substantial asset base that could be leveraged to support its recovery.

“We have a debt of about Sh20 billion and an asset base of over Sh220 billion. The university's management and council are exploring ways of maximising returns from its assets, including through renting and leasing some of its properties,” Prof Gitau said.

Similarly, the VC told MPs that the institution has since established a committee chaired by the Deputy Vice-Chancellor in charge of finance to examine the valuation of its assets and identify opportunities to improve revenue generation.

Although he cited austerity measures intended to reduce financial leakages and improve the management of the university's resources, the explanation did not convince the committee.

The committee accused the management of failing to demonstrate how the proposed interventions would translate into measurable financial improvements.

Commiitee chair Dick Maungu challenged the VC to move beyond citing the university's property portfolio and provide practical measures for addressing its outstanding obligations.

“The people who are suffering, some of whom are your creditors, will not mind about the asset base you have. What members and I have not seen are pragmatic steps that you have put in place as management to secure the university from this condition. We need to see actionable, pragmatic steps to free the university from this yoke.”

Embakasi West MP Mark Mwenje wondered whether the institution's leadership was adequately responding to the financial crisis.

"Is the university insolvent or not?" he posed, warning that the financial difficulties threaten the reputation of an institution that had long been regarded as one of Kenya's leading universities.

But Deputy Vice-Chancellor Prof Josiah Aduda explained that UoN had been declared technically insolvent for the financial year under review because its liabilities exceeded its assets.

The committee was particularly concerned about the outstanding pension contributions, warning that delays in remitting the money could cause hardship to former university employees who depended on their retirement benefits.

The university's acting Director of Finance, Stephen Kimeli, attributed its financial difficulties partly to a reduction in government funding following the introduction of the Differentiated Unit Cost (DUC) funding model in 2017/2018.

According to Kimeli, the reduction in capitation had created a funding gap of about Sh1.6 billion, which continually affect the institution's operations.

“Rising payroll costs has compounded the problem, making it increasingly difficult for the university to meet its financial obligations while sustaining its operations. However, the university was implementing measures under its 2023–2027 strategic plan to improve its financial position,” Kimeli explained.

These include increasing student enrolment, reviving income-generating units and expanding research activities to generate additional revenue, even as he stated that the revised university funding model could also help improve revenue, while research grants offered another opportunity to raise funds.

Prof Aduda told the committee that the university was developing a policy to commercialise its assets, which was awaiting approval by the university council.

“We have developed serious austerity and cost-management measures at the university because when you are in a hole, you don't continue digging,” said Aduda .

He maintained that the measures are beginning to yield results through improved revenue and reduced costs.

The committee, however, demanded a clear implementation schedule, with Maungu directing the university to submit a report on the proposed interventions by December 1.