IMF wants fresh audit of covid millionaires scam


Kenya Medical Supplies Authority offices in Industrial Area, Nairobi. 

Photo credit: Jeff Angote | Nation Media Group

The International Monetary Fund (IMF) has demanded a fresh audit of Covid-19 spending even as a new report shows Sh17 billion worth of stocks at the Kenya Medical Suppliers Agency (Kemsa) were unaccounted for.

According to the IMF, the audit will reveal the utilisation of the emergency coronavirus fund running into billions of shillings provided by the institution.

Kenya turned sought help from IMF to boost the Covid-19 response with an ambitious vaccination drive targeting the entire adult population by the end of 2022.

The IMF gave Kenya Sh173 billion between March 2020, when the first case of the virus was reported in the country, and December 2021.

IMF Mission head to Kenya Mary Goodman welcomed Kenya’s move to disclose the identity of shareholders in firms with state contracts.

As part of the conditions for a Sh263 billion loan signed with the IMF, Kenya committed to publishing names of the owners of companies doing business with the government.

The Ethics and Anti-Corruption Commission (EACC) said in March it had handed over files on the Sh7.8 billion Covid-19 procurement scandal to the Director of Public Prosecutions.

The IMF renewed the accountability drive as Auditor-General Nancy Gathungu raised fresh queries on Covid-19 spending by Kemsa. The auditor general says the validity and accuracy of Kemsa’s inventory balance, including pharmaceutical and non-pharmaceutical stocks, of Sh17.73 billion as at June 30, June 2020 cannot be confirmed.

Kemsa, according to a new report submitted to lawmakers by Ms Gathungu for the financial year ending June 30, 2020, procured Covid-19 items amounting to Sh7.6 billion, out of which stocks valued at Sh1.9 billion were issued out, leaving a Sh5.6 billion balance.

The report says an adjustment of Sh1, 680,377,225 was effected through Journal Voucher Kemsa-JV-1-20/21 debiting non-pharmaceutical stocks and crediting medical commodity fund.

“However, the credit entry was not traced under the medical commodity fund. The validity and accuracy of the inventory balance of Sh17,738,279,406 as at June 30, 2020 could not be confirmed,” it says.

The revelations come as Kemsa battles to clean its image after being engulfed in fraud over the procurement of Covid-19 supplies in 2020.

EACC cited irregular expenditure of Sh7.8 billion following tenders reportedly given to politically connected individuals and businesses.

In March this year, the UN-backed Global Fund revealed fresh rot at Kemsa when it found that 908,000 mosquito nets, 1.1 million condoms and TB drugs valued at Sh10 million vanished from its warehouse.

Global Fund, which finances the fight against HIV/Aids, tuberculosis and malaria, has also raised the red flag over “phantom” suppliers demanding Sh1.66 billion from Kemsa.

The medicines were believed to have been stolen and sold to private chemists.

Kemsa was also accused of overstating the value of medicines by Sh640 million, with prices of some having been inflated 100 times, the Global Fund says.

Some of the drugs, which were bought by cash from Global Fund, expired despite a shortage in public hospitals.

This prompted the Global Fund to raise alarm.

The IMF said on April 25 that its staff reached an agreement with Kenyan authorities on policies to complete the third review of the country’s loans, clearing the way for a $244 million disbursement upon approval by the executive board.

The Fund said the payment would bring total disbursements to about $1.18 billion under Kenya’s three-year $2.34 billion Extended Fund and Extended Credit Facility arrangements approved in April 2021.