Members of Parliament have called for swift government intervention to save Moi University from the financial and mismanagement woes that have rocked the institution for the past couple of months.
This is after the National Assembly’s committee on education revealed what it said was the sorry state of the institution including university’s financial woes occasioned by mismanagement of funds, insolvency and a crippling wage bill.
Committee chairman Julius Melly said that the situation has since forced the institution to seek urgent financial aid from the government.
Lawmakers learnt that Moi University’s wage bill has ballooned to an unsustainable 88% of its total revenue. This is in contrast to the 35 percent standard in other institutions that has worsened its financial predicament, leading to the institution’s technical insolvency since 2016.
“The University’s liabilities now exceed its assets, with pending bills standing at Sh7.9 billion. This is a clear sign of the institution’s struggle to stay afloat,” Melly informed Parliament.
The Tinderet MP pointed out the University’s operational challenges which began in 1991, exacerbated by the establishment of over nine other universities, which depleted its critical infrastructure, assets and financial resources.
To avert a complete collapse, Moi University has requested Sh315 million in monthly support for the next two years, along with a one-time bailout of Sh2.4 billion to clear outstanding debt and salary arrears stemming from court rulings on Collective Bargaining Agreements (CBAs).
“The University also plans to raise Sh700 million by selling some of its properties as part of a broader strategy to right-size its staff,” added Melly.
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“After consultations with the Office of the President, National Treasury, and Ministry of Education, it was concluded that the university’s financial requests were not fully sustainable,” said Melly.
The institution has been tasked to find alternative ways to increase revenue through income generating activities, such as leveraging its idle assets, conducting short-term training, and improving consultancy services.
“Moi university has been directed to protect its revenue over the next three years from these activities and negotiate a priority payment plan with creditors,” said Melly.
To stabilize the situation, the National Treasury has already disbursed Sh609 million to Moi University in October 2024, with an additional Sh500 million expected by November 15, 2024.
A caretaker committee will also be formed to strengthen the management of the university during this recovery phase.
The University is expected to reopen on November 4, 2024, dependent on the signing of a return-to-work formula by staff unions, a critical step towards restoring operations at the institution.
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