Kemsa CEO speaks on his plans to dismantle corruption cartels

Kemsa is perceived as a “cash cow” for politically correct and well-connected tenderpreneurs. How do you intend to dismantle these cartels and re-establish your institution’s reputation? Oloo Oyuga, Kisumu

The era of a Kemsa being regarded as a cash cow is now long gone. With the adoption of revised operating procedures and information technology based processes that focus on minimal human intervention, we are on course to raise our integrity levels. We are also working closely with various oversight bodies to ensure that we provide constant checks on our operating procedures and strengthen our governance and ethical standards. 

Learning from the Covid-19 pandemic, which necessitated emergency procurement outside of the standard operating procedures, we have reviewed various elements, including emergency procurement guidelines. These guidelines also focus on contracts management and supplier performance measurement and management.

A recent study by development partners on the country’s huge foreign debt recommended a merger of some parastatals. In the case of Kemsa, what measures can you prescribe to revitalise the authority to become a profit-making agency as per its mandate? Dan Murugu, Nakuru

The current reforms that we are undertaking are set to reinforce sound practices/procedures in among other areas, finance and procurement. As a supply chain organisation, we are sustained by fees we earn from providing a service. Being more efficient in our mandate will ensure that we remain competitive in our offering, thus attracting the award fees needed to revitalise the organisation.

In addition, we are developing a whistle blowing policy that will allow safe reporting of any activities that are contrary to the mandate of the organisation.

What do you intend to do from the position you occupy to restore confidence and cultivate good relations with donors, especially the Global Fund, following the ongoing audits? Yussuf Juma, Mombasa

In my current role, I am actively working to restore confidence and nurture relations with all our stakeholders. We continue to receive immense support from the Kemsa board and other stakeholders, which inspires us to forge ahead. 

Complementing the human resource base, we have put in place world-class risk management processes. These processes are benchmarked against donor requirements. For example, the authority is currently engaging the Global Fund on a new memorandum of understanding (MoU) that shall reflect the expanded coordination role for the Global Fund Coordinator through its programmes office. In addition, the MoU shall include key performance indicators (KPIs) and standard reporting formats to improve monitoring of the organisation’s performance.

As the acting CEO of KEMSA, what assurances can you give to Kenyans and your partners that cases of graft will be dealt with during your stewardship? Marcus Mathuku, Kajiado

I have given a personal assurance to the board and all other Kemsa stakeholders that I intend to lead an organisation that has zero tolerance to acts of graft. For this reason, we have put in place measures to mitigate graft opportunities and seal loopholes. For example, last week, we hosted a pre-bid conference for hundreds of prospective suppliers. 

For the first time, we have floated tenders that will be downloaded, submitted and evaluated on the Ifmis platform. This minimises acts of graft by reducing opportunity for human intervention. For example, without a tax compliance certificate upload on Ifmis, a supplier cannot be passed on to the evaluation stage. Therefore, one cannot end up being a supplier without satisfying the mandatory requirements. 

This approach also promotes fair play and competitiveness, which allows Kemsa to access better prices and pass the benefit to our clients. 

What reforms have been proposed to address management failures and the recent unfortunate disruptions in the supply of critical HIV drugs at KEMSA? Lydia Mwangi, Nairobi

This matter has now been addressed through a tripartite collaboration involving the Ministry of Health, our donor partners and the authority. We have drawn up and are now implementing priority reforms that guarantee end-to-end accountability.

We have also established communication platforms for consultative dialogue among the partners, allowing for swift escalation and resolution of technical challenges, including tax application and waivers. These reforms mandate to co-option of relevant agencies such as the Kenya Revenue Authority and Kenya Ports Authority to guarantee operating efficiency.

Sir, what mitigation measures have been put in place to ensure timely procurement of health products, including for Covid-19, which are urgent, regardless of the ongoing investigations? Shariff Mohamed, Thika 

Perhaps as a testimony to Kemsa’s corporate resilience and sound business continuity plans, we have maintained a business as usual operating focus through the pandemic. We have successfully managed to fulfil more than 90 per cent of the orders placed by the 8,000 plus public health facilities we serve. 

We have particularly ensured that we adhere to all the Covid-19 management protocols. A healthy team at Kemsa is able to serve the health facilities. 

The introduction of a supplier performance measurement tool has also allowed us to raise our operating efficiencies. In supply chain management, such tools promote timely delivery of quality assured products to our stores, effectively allowing us to distribute on time.

As the Acting CEO, have you come up with a system of checks  and balances to ensure the efficient procurement, storage  and distribution of medical supplies to the counties to forestall the clamour by some governors that they be given latitude to obtain these products directly from pharmaceutical companies? Richard Kenji, Nairobi

As we undertake the reforms that will increase internal efficiencies, we are also listening to customers to continue building a more sustainable relationship. 

The Kemsa Act 2013 currently requires the counties to buy all their medical products from us. We have proposed changes to this Act to state that counties be allowed to purchase from elsewhere for what they are not able to get from us. This will require that we be very efficient in our operations to be the main supplier of health products by choice and not necessarily by law. 

Medical needs cannot be postponed and it is important that we keep the supplies to health facilities flowing continuously. As part of the board’s and management team’s focus to foster consultative engagements, we are reaching out to the Council of Governors to establish a liaison that allows us to effectively engage through established frameworks. 

We sincerely want to listen to our stakeholders and ensure that we are flexible and dynamic enough to meet their unique needs as a one-size-fits-all approach is not sustainable.

As the only medical supplies agency of government, how do you plan to support the entrenchment of Universal Health Coverage? Fatuma Mumba, Mombasa

As part of our Strategic Plan, we have identified priority focus areas to enable us assure the success of the Universal Health Coverage (UHC). Kemsa’s role in the success of UHC is the provision of quality, accessible and affordable health products and technologies (HPTs). 

By procuring HPTs centrally at a national level, we have volumes large enough to give us economies of scale. We intend to optimise this to lower costs of the medicines and passing the cost benefit to the mwananchi. This will directly lower the costs of the service at the health clinic facility level. 

We are also in the process of decentralising our distribution into four zones to enhance service delivery by reducing the order turnaround time. Our Kisumu distribution zone, for example, will serve 19 counties, Mombasa will serve six counties, Meru will serve 11 counties in Northern Kenya and the rest will be served from Nairobi.

Kemas has the most widespread logistics and distribution network of any government agency in Kenya. How do you intend to enhance your reach to cover the entire country? Mbiki Mwima, Kiambu County

At Kemsa, we are now working to optimise and ensure that we have full leverage of our unique selling proposition. By far, we are the best resourced and placed Health Products and Technologies (HPTs) supply chain solutions provider in sub-Saharan Africa.

We provide reliable, affordable and quality health products and supply chain solutions geared towards improving healthcare in Kenya and beyond. Going forward, we are optimising our capabilities by adopting technological solutions and focusing on service provision decentralisation to complement our procurement capabilities.

Technically, this means that we shall be integrating the full value chain to derive cost and lead-time synergies. This also means working closely with local manufacturers to ensure that we undertake just in time procurement and maintain optimum inventories based on accurate demand projections. We have a distribution network that does delivery on a last mile basis to over 8,000 facilities across all the 47 counties.

Next Week: Mr Simon Gicharu, chairman of the National Association of Private Universities in Kenya (NAPUK)