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Let universities have alternative revenue streams

University funding

The funding challenges will continue to deepen and the number of insolvent universities will increase if universities bury their heads in the sand hoping for increased funding.

Photo credit: Pool



In the past two decades, Kenya has experienced a huge demand for tertiary education. This was because higher education is responsible for skilled and knowledgeable workers.

The country’s higher education system has a dual mode of delivering education to the general public—the public and private institutions. The Commission for University Education (CUE), which is domiciled in the Ministry of Education, has a responsibility of controlling the quality of higher education in Kenya.

Public universities are non-profit public institutions and are fully funded by the government. The ability to consistently meet service delivery and financial obligations to creditors in the short- and long-term has become a primary concern among public universities.

Universities are faced with a myriad challenges—such as declining trend of government funding, post-Covid-19 effects, economic meltdown, technological changes, decrease in student enrollment and the ballooning higher education cost. The situation is dire in some universities, which are no longer able to pay salaries.

Universities have two main revenue streams—government grants and student fees. To overcome the dwindling income resources, revenue diversification is one of the key approaches public universities can employ to mitigate the financial challenges. They have at their disposal competent human resources and other capital assets that can be used to generate more income.

Asset monetisation

Alternative revenue streams include consultation fees, asset monetisation, technology transfer, endowment and short courses. Public universities vary in size. Some are mature with many campuses and larger total assets that can be used to generate more income.

However, the smaller ones have fewer assets to monetise and are limited from generating an extra income.

For developing countries like Kenya, a public university revenue diversification strategy may only contribute up to 10 per cent of the extra revenue. That implies many will collapse if the government suspends its funding.

Dr Manyali, PhD, is the former dean, School of Science, Kaimosi Friends University. [email protected]. @george_manyali