Counties' debt owed to Kemsa drops to Sh2.7 billion

Kemsa offices

The Kenya Medical Supplies Authority's offices in Industrial Area, Nairobi, as pictured on September 9, 2020.

Photo credit: File | Nation Media Group

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

This is as nine counties including Kilifi, Nakuru, Laikipia, Nyeri, Meru, West Pokot, Turkana, Kisii and Makueni have been given an all-clear after clearing their outstanding bills.

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

But since then, the State agency has stepped up recovery of the pending bills through a new collection strategy.

The strategy saw the Authority restructure and separate the Sales and Credit Management functions previously intertwined in order to improve its collection.

Under the new Kemsa credit management strategy, the authority has set a target to collect at least Sh500 million in outstanding dues from county governments to boost its service delivery capacity.

“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 in a statement.

“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.

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 use of information technology systems which has seen the agency reduce order turnaround time from 46 days to the current 16 days.

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

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