NAIROBI, Kenya – The University of Nairobi is facing renewed scrutiny over its financial sustainability, with mounting debts, unremitted statutory deductions and pension obligations placing pressure on Kenya’s oldest public university.
The institution’s financial position came under fresh attention on Thursday, October 22, when the National Assembly’s Public Investments Committee examined its audit report, renewing questions about how the university will meet its obligations to staff, tax authorities, suppliers and other creditors.
The concerns extend beyond the university itself. Public institutions of higher learning across Kenya are struggling with accumulated liabilities, funding shortfalls and unpaid bills, raising questions about the sustainability of the current university financing arrangements.
UoN’s debt figures raise questions
The Controller of Budget’s report for the financial year ended June 30, 2025, placed the University of Nairobi’s debt at Sh16.43 billion, the highest among public universities in the report.
Kenyatta University followed with Sh13.93 billion, Jomo Kenyatta University of Agriculture and Technology with Sh10.97 billion, and Moi University with Sh10.11 billion.
The university has previously been classified as technically insolvent by the Auditor-General. In the audit of its 2021/22 financial statements, the Auditor-General reported current liabilities of Sh13.79 billion against current assets of Sh5.17 billion, leaving negative working capital of Sh8.62 billion.
The report also identified Sh10.57 billion in unremitted statutory deductions, including approximately Sh5.01 billion in taxes owed to the Kenya Revenue Authority and Sh5.53 billion in pension contributions.
Technical insolvency in this context means the institution’s short-term liabilities exceed its current assets, making it difficult to meet obligations as they fall due. It does not, by itself, mean the university has been formally declared bankrupt or ordered to close.
Staff pensions and statutory deductions at stake
The university’s financial challenges have consequences for employees and retirees whose pension contributions and other deductions depend on timely remittance.
When employers deduct money from workers’ salaries but fail to transfer it to the intended institutions, employees may face uncertainty over their retirement benefits and other financial obligations.
The Auditor-General’s earlier findings showed that UoN’s pension and tax arrears had accumulated over several years. The report also warned that continued operations depended on financial assistance from the government, donors and the tolerance of creditors.
The latest scrutiny places renewed focus on whether the university has made sufficient progress in addressing the longstanding liabilities and what measures are being taken to prevent further accumulation.
Public universities carry billions in unpaid bills
UoN’s difficulties form part of a broader funding challenge affecting public universities.
In February 2026, Higher Education Principal Secretary Beatrice Inyangala told MPs that 11 public universities were technically insolvent as institutions grappled with mounting debts and funding gaps.
The government’s Budget Implementation Review Report for the year ended June 30, 2025, placed the combined debt of public universities at Sh69.23 billion, with UoN carrying the largest share.
Separate figures presented by the State Department for Higher Education placed universities’ pending bills at Sh85.28 billion, illustrating the scale of outstanding obligations across the sector.
The figures differ because they relate to different reporting periods and financial measures. Nevertheless, they point to sustained pressure on university finances.
Funding model under scrutiny
The financial strain has intensified debate over government funding, the cost of running universities and the way money is allocated to institutions and students.
In May 2026, Inyangala said the State Department for Higher Education had been allocated Sh155.2 billion for the 2026/27 financial year against a request of Sh311.9 billion, leaving a shortfall of Sh156.7 billion. She also cited a broader higher education funding gap of about Sh260 billion.
Universities must meet recurrent expenses, including salaries, utilities, teaching resources, research costs, maintenance and pension obligations. When funding and revenue collections fall short of expenditure, institutions can struggle to pay creditors and remit deductions on time.
The crisis has also raised concerns about governance, financial management and whether universities have adequate systems to match expenditure with available resources.
Is UoN heading for collapse?
The university’s financial position presents serious questions about its ability to meet immediate obligations and sustain services without continued financial support and effective corrective measures.
However, the available figures do not establish that UoN is about to close. Technical insolvency is a warning about financial capacity, rather than proof of an imminent shutdown.
The immediate issues are whether the university can reduce its liabilities, clear outstanding statutory deductions, protect staff retirement benefits and secure a sustainable funding arrangement.
The outcome of the latest audit scrutiny may help clarify the extent of the institution’s obligations and the steps management and government intend to take.
For students, lecturers, employees and alumni, the stakes go beyond the balance sheet. The university’s ability to maintain teaching, research and essential campus services depends in part on whether its financial challenges can be brought under control.
The wider question facing Kenya is how to stabilise public universities without allowing unpaid obligations to continue accumulating at the expense of staff welfare, students and the quality of higher education.
