Kenya moots $124 mln bond to finance universities

Kenya’s Government aims to float a KSh10 billion (USD124 million) university bond early in 2011 to help higher learning institutions raise funds to admit more students. The aim is to open new financing avenues by offering a Government guarantee, and to open places for 25,000 more students, eliminating a 2 year wait for furuterh studies.
According to a report in Business Daily newspaper (, Higher Education Minister William Ruto said Treasury is finalizing details. He said it aims to achieve interest rates of 6%-8% “rather than the market rates of 18%.” A recent government infrastructure bond raised KSh30.5 billion at a 7.3%, but corporate bonds yield twice as much.
Listing this kind of bond could prepare the way for other institutions.
The Government is considering many plans to boost enrolment, which has blocked students and hurt quality of learning. The newspaper quotes Prof Olive Mugenda, chairperson of the Vice-Chancellors’ Association and vice chancellor of Kenyatta University, that public universities have not been able to expand their facilities in line with the increased intake because of minimal funding from the Government: “We are looking forward to the Government to double or triple the current funding worth KSh5 billion.”
Students also pay tuition fees. Universities need to build more lecture rooms and improve libraries. The Government also plans a full public open university, offering e-learning at university level.
Universities will be seeking to increase their capacity to offer tuition by building more lecture theatres and better equipped libraries.


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