- The Office of the Auditor-General flagged the University of Nairobi as technically insolvent, with a negative working capital of KSh 8.62 billion
- The university's accumulated deficit reached KSh 8.8 billion, while unremitted statutory deductions alone amounted to KSh 10.57 billion
- Vice-Chancellor Prof Ayub Gitau appeared before the National Assembly Education Committee to defend the institution's financial position
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Kenya's oldest and largest university has been declared technically insolvent.
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The Office of the Auditor-General (OAG) placing the University of Nairobi's total debt burden at approximately KSh 20 billion.
The declaration was presented to the National Assembly Education Committee on Thursday, October 22, 2026, and drew on findings from the institution's 2021/2022 audit report.
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What the UoN audit found
The OAG's review showed that the university posted a deficit of KSh 2.2 billion in the 2021/2022 financial year, bringing its accumulated deficit to KSh 8.8 billion.
Current liabilities stood at KSh 13.79 billion against current assets of KSh 5.17 billion, leaving a negative working capital of KSh 8.62 billion.
"Assets of Kenya shillings 5,170,219,000, resulting in a negative working capital of Kenya shillings 8,615,765,000," an OAG officer told the committee.
Unremitted statutory deductions, including tax and pension obligations, amounted to KSh 10.57 billion.
The auditors concluded that the university's continued operations depended on backing from the government, donors, and creditors.
Vice-Chancellor's position
Vice-Chancellor Professor Ayub Gitau, who took office as the university's ninth VC in 2026, acknowledged the financial strain but pointed to an asset base valued at more than KSh 220 billion.
He told lawmakers that management was pursuing revenue-generating measures, including leasing university properties, growing student enrolment, attracting research funding, and reviving commercial units.
"We are trying to salvage the situation by optimally raising our resources, and outside there have been some improvements going forward," Gitau said.
Education Committee chair Maungu pressed Gitau on how an institution declared technically insolvent could continue to honour its obligations to staff, suppliers, and other stakeholders.
Lawmakers insisted that any recovery plan be supported by verifiable financial projections, clear timelines, and measurable targets.
A sector-wide problem
The University of Nairobi's predicament reflects a broader crisis across Kenya's public university system.
A wider OAG assessment found that 21 public universities carried combined negative working capital of approximately KSh 42.55 billion in the 2023/2024 financial year.
Education Cabinet Secretary Julius Ogamba has EARLIER stated that 23 of 35 public universities are effectively insolvent, with a collective unpaid bill of KSh 75 billion owed to statutory entities.
As reported earlier on TUKO.co.ke, Moi University has struggled with liabilities exceeding KSh 9 billion, while Kenyatta University recorded negative working capital of approximately KSh 10.98 billion.
Successive funding models, including the Differentiated Unit Cost model and the Student-Centred Funding Model introduced in 2023, have been criticised for falling short of actual operational costs.
CS Ogamba has said the combined funding gap under both models reached approximately KSh 29 billion.
The Education Committee is expected to continue scrutinising university administrators and government officials as the government works to develop a new funding framework to address the structural shortfalls.
Source: TUKO.co.ke