MPs have directed the University of Nairobi to produce a rescue plan to help in the clearing out its staggering Sh20 billion debt and outline a plan that will save the institution from the brink of financial ruin.
The directive follows Auditor-General Nancy Gathungu’s report that found the university technically insolvent, with MPs challenging the university management to provide verifiable figures and firm timelines for its financial recovery.
The National Assembly Public Investments Committee (PIC) on Governance and Education specifically questioned the university’s management over its financial position during a review of the Auditor-General’s reports covering the fiscal years 2020/21 to 2024/25.
The committee chaired by Luanda MP Dick Maungu expressed concern over the institution’s accumulated deficits, outstanding statutory obligations, including pension contributions, as well as losses reported by some of its income-generating investment wings.
Prof Ayub Gitau, the 9th Vice Chancellor of the University of Nairobi, during the University’s 75th Graduation ceremony held on September 18, 2026 at the graduation square.
Photo credit: Pool
UoN Vice-Chancellor Prof Ayub Gitau, at a session with the committee, acknowledged the financial challenges but maintained that the university remained 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,” Prof Gitau told the MPs.
The MPs, however, expressed concerns about the outstanding pension contributions, warning that delays in remitting the money could cause hardship to former university employees who depend on their retirement benefits.
Audit reports before the committee show that the university’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.
The audit reports show that the university had reported a deficit of about Sh2.2 billion, pushing its accumulated deficit to Sh8.8 billion.
The institution also faces substantial statutory obligations, including taxes and pension contributions, which the Auditor-General said amounted to about Sh10.6 billion, an increase compared to the previous financial year, raising questions about its ability to meet its financial obligations despite holding valuable assets.
The university’s persistent financial crisis forced the committee to believe that the university is doing little to settle the pension arrears and protect the interests of the affected employees, including former staff.
However, Prof Gitau revealed that the university's management and council are exploring ways of maximizing returns from its assets, including rental income from leasing some of its properties.
The VC added that the institution had 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.
He also cited austerity measures that the university is undertaking to reduce financial leakages and improve the management of the university's resources.
But the explanation did little to convince the committee, which insisted that the management had failed to demonstrate how the proposed interventions would translate into measurable financial improvements.
Mr Maungu challenged the vice-chancellor 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, are not bothered about the asset base you have,” the chairman said.
He continued, “what the committee has not seen are pragmatic steps that you have put in place as management to secure the university from the current condition.
“We need to see actionable, pragmatic steps to free the university from this yoke,” noting that the committee expects clear timelines and evidence that the proposed recovery measures will deliver results.
Luanda MP Dick Maungu Oyugi of the National Assembly Departmental Committee on Education on Thursday, February 19, 2026.
Photo credit: Dennis Onsongo | Nation
The committee's concerns were amplified by Embakasi West MP Mark Mwenje, a member of the committee, who questioned whether the institution's leadership was adequately responding to the prevailing financial crisis.
"Is the university solvent?" Mr Mwenje posed a direct question to the university fraternity with Deputy Vice-Chancellor Prof Josiah Aduda acknowledged that the institution had been declared technically insolvent for the financial year under review because its liabilities exceeded its assets.
This, as the Embakasi West MP warned that the financial difficulties threatened the reputation of an institution that has long been regarded as Kenya's premier institution of higher learning.
“When you start looking at these figures and a whole university that was the first in this country is insolvent, then you have a crisis at the University of Nairobi,” said Mr Mwenje.
Mr Mwenje went on to question the university’s leadership capacity to reverse the situation, arguing that the university's financial records pointed to a deeper management crisis that requires urgent attention.
Central Imenti MP Moses Kirima also demanded detailed evidence to support claims that austerity measures were helping the institution recover.
Mr Kirima noted that the university management needs to demonstrate, through figures, how it was reducing unnecessary expenditures while addressing the university's financial obligations.
“Where is the analysis? Where are the figures to show that you are cutting down on expenses and taking steps to revive this university?” demanded Mr Kirima.
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 the fiscal period 2017/18.
Mr Kimeli told the committee that the reduction in capitation had created a funding gap of about Sh1.6 billion, which continued to affect the institution's operations.
He noted that the rising payroll costs had compounded the problem, making it increasingly difficult for the university to meet its financial obligations while sustaining its operations.
