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Kenyan universities lose millions in botched TNE bids

Two Kenyan universities have lost a total of $6 million in the past year and a half in a botched bid for international students in the East African region, it can be revealed.

Kigali, the capital of Rwanda where two of the failed campuses were built. Photo: Flickr/ Adrien K

The regulatory legitimacy of the campuses was questioned by Rwandan authorities

The universities, Jomo Kenyatta University of Agriculture and Technology, and Kenyatta University, are both top public institutions and had embarked on an ill-fated expansion with hopes of capitalising on a growing demand for higher education in the region.

The full extent of the institutions financial losses can now be shared, after an inquiry by the local authorities concluded.

“KU is already working on the process of closing the campus”

As the demand picked up between 2009 and 2015, the universities opened satellite campuses in neighbouring countries of Tanzania and Rwanda, attracting thousands of learners.

However, it seemed that attracting students was the easy part, for soon after problems including regulatory and management challenges set in, setting the stage for closure of the campuses.

It also turned out that the expansion was illegal, according to the Kenyan parliament. As the universities are publicly-funded institutions, their mandate according to Kenya Universities Act 2012 was to serve Kenyan students, apparently alone.

First to go down was JKUAT’s Kigali, Rwanda campus, which was shut down in April 2017. It folded under pressure from Rwanda’s Higher Education Council, after an audit found the institution lacked the capacity to deliver programs, despite admitting close to 1,900 students. Reports also suggest that the university’s leadership may have failed to obtain the correct approvals from the governments in Nairobi or Kigali.

Problems did not stop there for JKUAT, as it was accused of failed to get enough students to study at it’s campus in neighbouring Tanzania. This again led to the campus’s closure, and with it a further loss of $100,000 in seed capital, according to outgoing vice chancellor Mabel Imbuga.

“Management has not explained the steps being taken to recover the amount so far incurred”

But it is Kenyatta University that failed the hardest, losing a $5.2 million investment in both Rwanda and Tanzania, where it was running two well-attended campuses.

Kenya’s largest university in terms of student numbers lost $4.2 million it has invested in the Tanzania’s resort city of Arusha, and a further $900,000 stake in its campus in Rwanda, according to local media reports.

“Although the university explained that all the due diligence was done before the decision to open up the two campuses, the management has not explained the steps being taken to recover the amount so far incurred, totalling $5.18m,” said Auditor General Edward Ouko, when finding KU administrators culpable for the loss.

Earlier in 2017 Tanzania Commission for Universities had stopped KU from admitting students warning that it operating in breach of regulations, before eventually ordering closure of the campus over failure to comply with the law last month.

“We received written instructions on the same and KU is already working on the process of closing the campus, which is still ongoing and will be completed in due course,” said KU vice chancellor Michael Wainaina on the process of closure of Tanzanian branch which shuts its doors for good in December.

Kenyan universities have been hit by a cash crisis sparked by reduced state funding, and increased competition from more private institutions, beginning a race to attract foreign students for much needed revenue to enable them stay afloat.

However the universities have been outwitted by the more specialised private institutions such as the United States International University (USIU-Africa) and Strathmore University, both highly internationalised institutions by their nature.

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