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Universities with unemployed graduates that will lose state funds

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Economy

Universities with unemployed graduates that will lose state funds


UoN

The Source of Knowledge at the University of Nairobi. FILE PHOTO | NMG

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Summary

  • Public universities whose graduates do not get a job in one year face reduced liquidity from the government.
  • The formula calls for reduced allocations to universities with courses that are not marketable in the job market.
  • Kenya is currently dealing with large numbers of unemployed graduates in an economy struggling to create new jobs.

Public universities whose graduates fail to secure jobs within a year face a reduction in cash from the State under a proposed performance-based funding formula.

The formula recommended by the University Fund, which guides the allocation of State funds to public universities, is based on five performance indicators, which include the absorption of graduates of an institution in the labor market, research and financial management training for senior officials.

This is a departure from the current formula that is based on the number of students and the cost of courses at universities.

The formula calls for reduced allocations to universities with courses that are not marketable in the job market.

The new funding structure comes at a time when Kenya has seen an increase in the number of universities and campuses, as well as degree courses, mostly liberal arts, offering few opportunities in the competitive job market.

“Performance-based funding is funding intended to allocate a portion of the universities’ education budget according to specific performance measures. It makes the allocation of funds more transparent and competitive, ”the UF board says in the draft.

“The key performance indicators to be considered will be the four-year graduation rate, the employability rate of graduates (one year after graduation) and research inputs.”

Kenya is currently dealing with large numbers of unemployed graduates in an economy struggling to create new jobs.

The number of students enrolled in Kenyan universities has increased in recent years, driven by state funding of students in private institutions and the creation of new campuses.

Public universities had 452,089 students last year, up from 412,840 the year before, according to the Economic Survey.

Kenya has 102 public universities and campuses, which posted a deficit of 6.2 billion shillings in the year to June and received almost 70 billion shillings from the Treasury to run their operations.

The state has been pressured by the World Bank to close and merge some of the liquidity-strapped public universities, citing duplication of courses and the need to cut spending.

Rising college tuition is putting pressure on the government to create jobs for graduates, whose number stood at 62,000 in 2002 amid a slowdown in new job creation. Before the start of Covid-19, which eliminated thousands of jobs last year, the economy had been generating fewer than 100,000 jobs in the private sector. The economy added 69,600 jobs in the formal private sector in 2019, at a time when the government was seeking to control its bulging wage bill through a hiring freeze.

Half of unemployed Kenyans have stopped looking for work, discouraged by shrinking opportunities in a tough economy that has seen many businesses downsizing in an attempt to survive.

Kenya National Bureau of Statistics (KNBS) data covering the quarter ending March 2021 shows that 1.23 million out of a total of 2.49 million unemployed Kenyans aged 15-64, and qualifying for the workforce, they were not actively seeking employment. .

The majority of those who have resigned from employment are between 20 and 24 years old with 363,018, followed by those between 25 and 29 years old with 232,146.

The 20-24 year old demographic consists primarily of recent graduates whose job search efforts are hampered by a lack of experience and a mismatch between skills and openings.

The large number of new entrants to the job market each year has also created limited opportunities, forcing many to seek alternatives, such as starting small businesses.

Since March 2020, many companies have been unable to accept more workers due to economic problems caused by the Covid-19 pandemic, and many have resorted to layoffs or pay cuts to survive.

Public universities have come under financial strain in recent years as a result of rapid expansion amid a drop in student enrollment in lucrative parallel degree programs in which students paid fees based on market rates. .

The number of public universities and campuses increased from 49 in 2010 to 204 in 2017 before dropping to 102 last year. Since 2016, several campuses have been closed across the country.

The cash shortage in universities has also been caused by the implementation of the differentiated unit cost model that resulted in a reduction in government capitation in large universities.

This caused a huge gap in payroll and the accumulation of debt.

Universities that have closed some of their campuses include Kisii, Laikipia, Moi, and the Jomo Kenyatta University of Agriculture and Technology. The World Bank seeks to accelerate the closure due to the losses reflected in the performance of the main public universities.

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