Fund withholds Sh40 billion over graft

Protesters arrested at the Kencom bus terminus in Nairobi are bundled into a police van on August 21, 2020.  

Photo credit: Francis Nderitu | Nation Media Group

What you need to know:

  • Only three African countries – Kenya, South Africa and Ethiopia – have been getting the grants in cash but the agency has lost trust in Kenya.
  • The latest scandal in the ministry has already claimed its first casualties.

The Global Fund will no longer give Kenya cash grants due to fears of corruption.

The Fund, which supports HIV/Aids, tuberculosis and malaria programmes, said it would instead buy the medical supplies needed by the country.

Only three African countries – Kenya, South Africa and Ethiopia – have been getting the grants in cash but the agency has lost trust in Kenya.

This decision is meant to stem corruption in the procurement chain and afford more beneficiaries drugs and other supplies.

The announcement came after an audit by the Fund identified irregularities amid a storm over the multibillion-shilling Covid-19 procurement scandal linked to the Kenya Medical Supplies Authority (Kemsa), a government agency.

However, Health Principal Secretary Susan Mochache Friday said she is hopeful the funding will not stop.

“We will still be getting help but in a different form. We are doing all we can to reclaim our lost glory,” she said.

First casualties

The latest scandal in the ministry has already claimed its first casualties.

Last week, the Kemsa Board sent its chief executive Jonah Manjari and directors Eliud Muriithi (Commercial) and Charles Juma (Procurement) packing.

In a June 23 letter to Ms Mochache, Global Fund senior portfolio manager John Ochero requested a meeting to discuss grant implementation and procurement-related issues.

“There are several areas of concern in the management of procurement at Kemsa as well as in implementing the Global Fund grant, which we wish to bring to your urgent attention,” he said.

“Our local fund agent PriceWaterhouseCoopers will follow up.”

Mr Ochero cited delays in procurement of GeneXpert cartridges and nutritional commodities, a transport tender at Kemsa and procurement of Kenya Malaria Indicator Survey.

The letter also raised questions on the construction of the Kemsa warehouse.

Meanwhile, the Ethics and Anti-Corruption Commission (EACC) is conducting a separate investigation into procurement at the agency.

Medical commodities project

Kenya is one of the Global Fund's “high-impact” countries with active signed grants of $384 million (Sh40.7 billion) for January 2018 to June 2021.

The Global Fund has supported HIV/Aids, TB and malaria programmes in Kenya since 2002, disbursing to the country $1.14 billion (Sh120.8 billion) in total.

The USAid supports the Kemsa medical commodities project, with funding of about $650 million (Sh69 billion) for procurement of commodities funded by the United States government between 2015 and 2020.

About 60 per cent of the grant is spent on procuring medicines and health products.

Kemsa is responsible for procurement, storage and distributing medicines and health products under the grants managed by the National Treasury.

With the support of the government, the Global Fund, USAid and other donors, Kemsa is a leading procurement and supply chain firm in the region.

Quality services

 Kenya has made significant progress in the fight against the three diseases.

Most challenges in quality services have been identified by the country, through assessments by the Ministry of Health, the Global Fund and partners.

An exposé by the Nation showed that cartels at Kemsa and the ministry have pocketed billions of shillings, thus exposing millions of Kenyans to the ravages of diseases and death.

The agency now says it is broke and wants a Sh5 billion bailout from the government even as it  emerged that it cannot account for Sh17 billion given to it in the last financial year.

A Kemsa board meeting on Wednesday revealed that the agency’s operations could grind to a halt unless the government bails it out.

The agency is requesting to be allowed to sell some items procured to fight the coronavirus in order to stay afloat.

aoketch@ke.nationmedia.com