The University of Nairobi (UoN), the country’s oldest and largest public university, has been declared technically insolvent by the Office of the Auditor-General, with debts estimated at Sh20 billion.
University management appeared before the National Assembly’s Public Investments Committee on Governance and Education on Thursday, October 22, 2026. Vice-Chancellor Prof Ayub Gitau told MPs that the institution has a substantial deficit but holds assets worth significantly more.
“We have a deficit of about Sh20 billion,” he said. “We are at the stage of commercialising our asset base, which totals about Sh200 billion.”
Auditors told the committee that the university’s short-term debts far exceed the cash and other assets it can readily access to meet its obligations. “The university held current assets of Ksh5,170,219,000, resulting in a negative working capital of Ksh8,615,765,000,” a representative of the Auditor-General said.
The debt stems from years of operating deficits, unremitted statutory deductions and pension arrears, with unpaid tax and pension liabilities alone estimated at about Sh10.6 billion. The 2021/2022 audit recorded an annual shortfall of Sh2.2 billion and a cumulative deficit of Sh8.8 billion.
Several factors have driven the university into financial distress. Its government funding fell after the Differentiated Unit Cost formula was introduced, leaving an estimated Sh1.6 billion gap, while its payroll has continued to grow. Some of its internal commercial ventures have also incurred losses. According to the Universities Academic Staff Union, the university has not hired a lecturer since 2020, when it froze recruitment to contain costs.
MPs pressed the management to explain how the university would use its vast property holdings to settle its debts. Committee Chairperson Dick Maungu said the plan presented did not align with the explanations provided by the university’s management.
“Members are concerned because, as you indicated, there is no nexus between the report presented and what you have said,” he said. “You have an asset base of more than Sh200 billion, but now the people who are suffering are the staff and creditors. You need to bring strategies of clearing the debt.”
He added: “We cannot see pragmatic steps you have put to secure the university in terms of investment.”
The committee asked for a detailed timeline for reducing the deficit and clearing outstanding payments, as well as verifiable financial models and clear targets.
Prof Gitau said the university was taking steps to stabilise its finances. These include leasing idle property, admitting more students, pursuing international research grants, restructuring underperforming business units and cutting spending through austerity measures.
“We are working to stabilise the situation by optimising our internal revenue generation, and we are already seeing signs of progress,” he said.
UoN’s troubles reflect wider pressure on public universities, which face rising wage bills, mounting statutory debts and inflation at a time when government grants have not kept pace.
The report on the university’s financial position comes as lecturers at public universities enter the fourth week of a nationwide strike over the 2025–2029 Collective Bargaining Agreement. On October 21, 2026, UoN students blocked Waiyaki Way to demand an end to the stalemate.
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