Covid-19 extra doses that gobbled up Sh8.3 billion

The ghost of the Covid-19 virus has refused to go away, with the latest revelations that Kenyans are set to lose Sh8.3 billion due to an apparent blunder by the Ministry of Health.

It has emerged that Kenyans would fork out the billions to pay for undelivered and ‘unneeded’ doses of Covid-19 vaccines ordered by the Ministry in 2021.

The revelations are contained in the latest audit report for the Ministry of Health for the financial year ending June 30, 2024, released by auditor general Nancy Gathungu.

The disclosures could focus the spotlight on the already troubled ministry and provoke uproar over government spending during the global pandemic.

The MoH currently faces a public furore over its implementation of the new health programme under the Social Health Authority.

Kenya reported its first case of the virus in March 2020, triggering panic and the hurried procurement of health commodities – resulting in illegalities and irregularities that exposed taxpayers’ money.

In what could rekindle the procurement mess and alleged massive graft at Kenya Medical Supplies Authority during the pandemic, the ministry ordered some 13.33 million Covid-19 doses valued at Sh7.46 billion.

The order followed an arrangement between the government, the Africa Vaccine Acquisition Trust and the Export-Import Bank (AFREXIMBANK) entered on May 26, 2021.

However, the delivery was only made for 1.80 million doses, with the balance of 11.52 million doses pending delivery.

Out of the balance, the manufacturer had produced 2.72 million doses as of August last year, but these were not shipped to the country as the government indicated it no longer needed them.

However, despite this, the government was obligated to pay for the entire order as per the terms of the agreement.

“The unshipped component was indicated as no longer needed and was due for destruction,” the report states.

It was unclear why MoH officials failed to conduct due diligence and proper surveillance of the scourge to inform the procurement orders.

The report adds that Cabinet’s approval to destroy the wasted vaccines was being awaited. The unshipped doses have since attracted a penalty amounting to Sh930.59 million.

“The statement of account from AVAT dated May 2024, indicated that Kenya had an outstanding obligation of $64.88 million or Sh8.38 billion equivalent,” the report states.

The amount comprises accrued interest of $7.19 million (Sh930.59 million) for doses that were manufactured as per the contract but not requisitioned.

Gathungu reveals that although the government has engaged the AFREXIMBANK to waive the interests, the Bank has not acceded to the request, at least at the time of the audit.

“From the foregoing, value may not have been realised from the agreement for the supply of Covid-19 doses while the government is at risk of accruing further interest with the continued delays in settlement of the accounts.

“In the circumstances, the project will incur expenditure for doses not received.”

At least 350,000 Kenyans contracted the virus, with more than 5,000 patients succumbing to the scourge, according to data by the ministry.

In 2021, MPs ordered the prosecution of top Kemsa officials implicated in the dubious procurement of Covid-19 medicines and safety gears.

The procurement was characterised by inflation of costs and over-procurement of key items such as face masks.

“All suppliers that may have supplied Kemsa at a price higher than the recommended price should refund the government the excess payment within a month of such price determination,” the National Assembly’s Public Investments Committee has recommended in a report.

Top Kemsa bosses were implicated in the Sh7.8 billion Covid-19 procurement scandal.

This followed an investigation by the Ethics and Anti-Corruption Commission.

In the scandal, taxpayers are believed to have lost more than Sh3 billion following the irregularities as stocks remained unused and were to be sold at throwaway prices.

The agency said it forwarded its file to the DPP recommending the prosecution of officials of several firms awarded multi billion-shilling state contracts for the supply of Covid-19 emergency equipment.

“Investigations further established Kemsa did not engage any of the prequalified service providers for the delivery of the Covid-19 materials,” the EACC said.

However, despite the conclusion of the investigation by both EACC and Parliament, heads are yet to roll.