Does the taxpayer need Kemsa?


Last week, Kenya was hit with revelation of similar Covid-related tender scandals where products supplied were overpriced and fraudulently given to those connected to government. FILE PHOTO | NMG

"Attempting to profit from a disaster that is claiming the lives of our people everyday is the action of scavengers. It is like a pack of hyenas circling wounded prey."

Those stinging words are from South Africa's President Cyril Ramaphosa when his government was hit with tender scandal in the procurement of Covid-related products and services. The graft involved overpricing, substandard products and services delivered and giving tenders to those connected to government and the ruling party.

The South African Public Protector has moved in to launch a probe and the President himself is taking an unprecedented step of publishing the full list of Covid-19 tenders and companies that secure those tenders and contracts for public scrutinize and also name and shame those sucking life out of the more than 500,000 Covid cases. This will be the first time the Office of the President will be using the name and shame in the fight against graft.

Last week, Kenya was hit with revelation of similar Covid-related tender scandals where products supplied were overpriced and fraudulently given to those connected to government.

A company that was registered in January, only four months in operation the company at the time had no record of financial capability to deliver, managed to get a tender to supply hundreds of thousands of Personal Protective equipment at twice the market cost.

Another company registered in February, less than four months old got a tender to supply 100,000 personal protective equipment (PPES) and 100,000 KN95 masks at twice the cost.

What makes Kenyan case worse than South Africa is that entrepreneurs and govt officials colluded and stole donation meant to address a pandemic delivered by Chinese entrepreneur Jack Ma and diverted them to private warehouses which they later sold to the taxpayer through the Kenya Medical Supplies Authority (Kemsa).

What kind of blood-leaching government steals donations and then sells it back to that taxpayer twice the market cost? And the President loses his voice, seeing no evil neither hearing no evil?

It is such scale of corruption in public institutions and private sector that cuts deal with governing elites that plunged Lebanon into a catastrophe last week after a mountain of explosive chemical was left lying around unsafely for almost a decade killing more than 150 people, injuring more than 6000 and creating a ton of destruction,.

In this covid tender scandal, the big question Kenyans need to ask themselves is whether we need Kenya Medical Supplies Agency after how it has handled the procurement of covid-related supplies when we are in a global pandemic, a time when we need it most.

First, KEMSA was established to source medical related supplies from manufacturers and global suppliers so we can have an efficient public health supply chain.

But between 2005 when it came to full operation and 2013 it was marred with corruption, inefficiencies and insolvency linked to heavy government interference. In 2013, it was transformed from a government agency to an authority, making it independent from govt but that seem to remain on paper.

Government interference remains too heavy for the organization to disentangle itself. In this Covid tender scandal, 12 firms reportedly linked to well-connected people in government were awarded contracts worth Sh 3 billion covered by the State Agency 2019/2020 approved budget. Now, this the kind of interference that the transformation from Govt agency to Authority was meant to check, but they are still happening.

Second, KEMSA is designed to be a bulk purchaser giving it an advantage of low sourcing cost. This is also meant to deepen its relationship with manufacturers and suppliers that guarantee bulk discounts.

But in the covid tenders, this business model was inverted with KEMSA outsourcing purchase of these products to small entities with many even lacking financial capability. And these companies delivered twice the market cost when KEMSA is supposed to be the lower cost supplier.

So, is it time the taxpayer does away with KEMSA and directly acquires medical supplies from the lowest supplier in the market?