More than half of Kenya's 400,000 primary school pupils cannot go to secondary school due to lack of space.
Only 47 per cent of those who took the certificate of primary education have been offered places.
Sammy Kyungu, the director of education, said 171,560 students were admitted to the 2,800 public schools and another 24,000 to private schools in this academic year, which began in January.
The government is worried by the high wastage, since the number of form one places has remained fixed at 47 per cent for years, said Elizabeth Masiga, permanent secretary.
It has set a target of 70 per cent by the year 2010, and is relying on two billion shillings from the British Department for International Development to improve access and quality of education.
Since 1990, completion rates at primary level have dropped from 55 per cent to 45 per cent. Gross enrolment has also dropped from 95 per cent to 80 per cent.
"So far, Kenya's education system at primary and secondary levels is characterised by high wastage and drop-out rates, usually brought about by rising costs and inefficiency in the education sector," said Professor Florida Karani of the University of Nairobi.
He says that on average only 29 per cent of children go to secondary schools in Kenya. In some districts, especially among the nomadic ethnic groups, only l0 per cent are enrolled.
A recent World Bank survey blamed wastage and declining enrolments on expensive fees and the failure of institutions to expand. The number of students unable to pay for their education has increased from 30 to 50 per cent since 1985.
"Many local communities are unable to build new, or to maintain old schools because of poverty," says another World Bank report on poverty assessment.
Now the Department for International Development has recommended the expansion of existing schools to accommodate more students. It also suggested converting some boarding schools to day schools.
But the department promised to help build 35 quality boarding primary and secondary schools in the arid districts, where drop-out rates and wastage have been particularly acute.