CS Machogu Offers HELB Increment and Ksh 50 Billion in University Funding
After Cabinet Secretary Ezekiel Machogu raised its financing, the Higher Education Loans Board (HELB) received a financial boost.
Tuesday, November 8th, Machogu informed the press that the state had already approved Ksh15.8 billion for HELB.
This is a rise from the board’s prior budget of Ksh15,2 billion for the 2021/2022 fiscal year.
Machogu also disclosed that Ksh50 billion had been allocated aside to subsidize activities at public universities and assured that the two kitties would not be exposed to austerity measures applied across government agencies.
“The Government has allocated a capitation of Ksh50 billion for university education and another Ksh15 billion to the Higher Education Loans Board. I want to assure our Universities that nobody is interfering with that money – even the cost-cutting measures with other sectors of the economy.
“Our universities, relax and rest assured that the Government will continue to fund our universities but we are also asking that if there are other ways we can generate income for our universities, why not,” he stated.
The remarks were a shift from his previous position, in which he apparently urged for the government to cease financing universities.
Instead, he said that the institutions should find ways to generate their own revenue through activities such as research.
However, at his most recent press briefing, the CS distanced himself from the statements.
“I want to make a clarification, nobody ever said that University funds are going to be done away with. It is better we get an entire story, what we said is that the government is supporting universities through capitation and infrastructural funds. That is clearly manifested in the Kenya Kwanza Manifesto,” he added.
Recent problems with getting money to HELB recipients have been blamed on a low repayment rate and a slow release of funds from the exchequer.
After the treasury failed to grant Ksh3 million to 75,000 beneficiaries on schedule in February 2022, the board delayed payments to these individuals.
This comes as Kenya is set to receive an additional Ksh.52.7 billion ($433 million) from the Extended Fund and Extended Credit Facilities of the International Monetary Fund (EFF & ECF).
The payout, which needs IMF Executive Board approval, followed the conclusion of an IMF staff mission to Kenya, which constituted the fourth review of the country’s 38-month program with the multilateral lender.
It is anticipated that the current disbursement will bring total payouts by the IMF to Kenya under the EFF and ECF facilities to Ksh.188.3 billion ($1.548 billion).
This includes an additional Ksh.15.5 billion ($127.4 million) from the program’s expansion to satisfy external funding needs causing by drought and debt vulnerabilities in conjunction with difficult external financing circumstances.
Kenya has made commendable progress in addressing debt vulnerabilities despite a tough domestic and external environment, according to the IMF staff team that visited the country between 25 October and 8 November.
“There has been good progress on fiscal adjustments needed to address debt vulnerabilities though pressures remain elevated.
“The authorities are taking forceful measures to further reduce the fiscal deficit. Fuel subsidies were mostly eliminated in September and the variable cost adjustments in electricity prices reinstated,” the IMF said in a statement issued Tuesday night.
“In addition, the new government is in the process of formulating a supplementary budget for the 2022/23 financial year that will institute significant spending cuts with a view to modestly reducing the deficit from the previously programmed level of 5.9 per cent of GDP.”
However, the IMF has demanded swift structural and governance reforms, especially at ailing Kenya Airways and Kenya Power.
“This includes completing efforts underway to publish beneficial ownership information for awarded government contracts, which will be a major step towards transparency and accountability.
“Reform of financially troubled State-Owned Enterprises (SOEs) including Kenya Airways and Kenya Power and Lighting Company will also be key,” the IMF added.
The IMF personnel met with important government leaders, including President William Ruto, the new Treasury Cabinet Secretary Prof. Njuguna Ndung’u, and CBK Governor Dr. Patrick Njoroge.
At the conclusion of the 38-month program, which expires on 30 June 2024, Kenya is scheduled to have earned Ksh.284.6 billion ($2.34 billion) from the IMF program agreed upon in February of last year.