Counties cut Kemsa debt by Sh1.2bn as nine pay up

New Content Item (1)

Kenya Medical Supplies Authority (KEMSA) Embakasi warehouse, Nairobi on December 1, 2020. PHOTO | LUCY WANJIRU | NMG

Pending bills owed to the Kenya Medical Supplies Authority (Kemsa) by county governments for supplies have dropped from Sh3.9 billion to Sh2.7 billion.

The drop by Sh1.2 billion comes after nine counties —Kilifi, Nakuru, Laikipia, Nyeri, Meru, West Pokot, Turkana, Kisii and Makueni — were given a clean bill of health after clearing their outstanding bills.

Kemsa chief executive officer Terry Ramadhani said the debt by counties has been outstanding since November 2021.

ALSO READ: Kemsa names former board member as CEO

But since then, the State agency has stepped up recovery of the pending bills through a new collection strategy that has seen restructuring and separation of the sales and credit management functions, which were previously one unit.

Under the new credit management strategy, the authority has set a target of collecting at least Sh500 million in outstanding dues from each defaulting county.

“We have undertaken structural changes that allow for a more efficient credit management process with our stakeholders at the core. The recently adopted credit management strategy is bearing fruit,” said Ms Ramadhani.

“The earlier Sh3.9 billion debt has now dropped to Sh2.7 billion with nine counties having cleared their outstanding accounts with Kemsa,” she added.

The enhancement of the credit management functions under an independent department, said the new Kemsa boss, is also geared at ensuring financial sustainability of the agency’s revolving fund.

ALSO READ: Kemsa has overdose of employees, says Auditor General

The speedy settlement of pending bills at Kemsa, she pointed out, will in turn help the government agency fast track pending payments to its suppliers as well as boost the national scale of the Universal Health Coverage agenda.

The authority’s suppliers, who include local manufacturers, are owed up to Sh2 billion in overdue accounts.

At the same time, Ms Ramadhani said they have also stepped up deliveries to the counties with increased credit sales collections.

As of mid-April 2022, Kemsa had successfully dispatched Sh9.73 billion worth of essential medicines and medical supplies (EMMS) and National Health Strategic Programs (NHSP) supplies to 47 counties.

Kemsa has also automated several of its functions and incorporated the use of information technology systems which has seen the agency reduce order turnaround time from 46 days to the current 16 days.

ALSO READ: Kemsa faces Sh600m deficit on US agency’s funding withdrawal

“More than 32,000 EMMS and NSPHP supplies were dispatched to more than 7,600 health facilities countrywide,” she said.

[email protected]