Kemsa stands to lose Sh6b in Covid supplies dead stock

Wednesday, September 23rd, 2020 00:00 |
National Assembly Health Committee chairperson Sabina Chege (right) and her team during a visit to Kemsa offices, Nairobi. Photo/PD/PHILIP KAMAKYA

Bernard Gitau @benagitau

The Kenya Medical Supplies Authority (Kemsa) stands to lose upto Sh6 billion, because it is unable to sell stock which had been bought to fight the Covid-19 pandemic, MPs were yesterday told.

Speaking after touring the Kemsa warehouse in Embakasi, the National Assembly Health Committee led by its chair Sabina Chege, said the authority’s management had bought supplies worth Sh7.1 billion.

Systems manipulation

“Kemsa has only sold it’s supply worth Sh1 billion while supplies worth Sh6.1 billion are lying idle in the warehouses, with no one to buy, because cheaper products are now available locally,” said Chege.

The committee faulted Kemsa over its decision to spend Sh7.1 billion on Covid-19 goods, way above the Sh1.5 billion allocated to it by the Ministry of Health, of which it was only authorised to spend Sh758 million on the goods.

But  the agency’s director George Walukana differed with the MPs, saying the agency projects that it will lose upto Sh2.3 billion from “dead stock” of Personal Protective Equipment (PPEs).

The committee also questioned the ‘Reverse Procurement’ Kemsa entered with suppliers of Covid-19 material, attributing it to the management’s penchant for making decisions without involving the board.

 “As a committee, we are struggling to understand the reverse procurement, where suppliers were allowed to supply Covid-19 products, then negotiations and pricing would only be done once they arrive at the Kemsa warehouse,” Chege posed, adding that the agency’s officials had said as much.

Chege said such procurement puts Kemsa in a difficult situation because the current market price for PPEs is too low compared to its pricing.

‘Kemsa bought N95 masks at Sh700 and sold each at Sh735 but from May, the market was flooded with cheap masks d and now they have nowhere to sell,” she said.

Kemsa defended its move saying the purchase was due to Ministry of Health peak projection of Covid-19 cases in October.

Chege said there are many questions to be answered by the agency’s suspended officers and the current management on the reverse procurement.

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