Lack of integrity, transparency, corruption allegations may have cost Kenya Medical Suppliers Agency a contract with the US Agency for International Development (USAid) hence denying 1.5million HIV patient’s lifesaving drugs.
The United States Secretary of State Antony Blinken said the US have had an issue with Kemsa, especially concerning corruption that the government is working to reform.
“We have had an issue with Kemsa, the institution responsible for the distribution, and as you know very well, concerns in particular about corruption that I know the government is working to reform. We have an obligation to our own taxpayers when we’re spending their money to do it in a way that is accountable and fully transparent,” Mr Blinken said.
The stalemate between the US Agency for International Development (USAid) and Kemsa because of tax row has escalated to President Uhuru Kenyatta with the two countries seeking a solution.
He adds” What we talked about today was making sure that as KEMSA was being reformed nothing fell through the cracks, that we had the ability together to make sure that our assistance continued uninterrupted, so that people in need of what we’re providing didn’t go without it. And I think that we’re going to work very closely together to make sure that happened.”
Asked how the US is collaborating with the Kenyan Government to ensure that this issue is addressed amicably he said as an American he was proud with the long partnership that US has had with Kenya and with other countries to deal together with HIV/AIDS as well as with other potentially debilitating diseases or deadly diseases, whether it’s malaria or tuberculosis.
“I’m extremely proud of the PEPFAR program, something that President Bush initiated many years ago. I think it’s hard to think of any initiatives that is – that have done more to save lives, but not just save lives, make sure that people could then carry on productive lives that contributed significantly to their families, their communities, their countries. And this – so this has been a longstanding partnership, and it’s one that I reaffirmed our commitment to today in my conversation,” he said
For the last five years since September 2015, the USAid and Kemsa have had a five year contract for procurement, warehousing and distribution of donations to Kenya.
The contract apparently ended on September 25, 2020 and before its lapse, it was extended to December 24, 2020.
Prior to the review on whether to extend the contract or not, the USAid requested Kemsa to provide a close out plan at the expiry of contractual arrangement in line with their normal procedures of program close out.
According to an insider at the Ministry of Health who sought anonymity, Kemsa did not respond to the donors as per the stipulated timelines.
When the response to the request was not forthcoming, the USAid reviewed the terms in the contract to only warehousing and distribution and excluding procurement, the extension period was further revised to April 23, 2021, to give room for more consultation.
The extension has since elapsed and the donor did not review the procurement service in the contract.
With this, the donor engaged a third party for the procurement services, a privately owned American firm, Chemonics to procure and import consignments on behalf of USAid.
The United States is not keen on working with Kemsa and has since given conditions and indicated that unless the system is restructured then they have no option but to engage the services of a third party.
There are also allegations that drugs being donated to the country by USAid finds their way into the private chemists shelves, investigation is ongoing.
The USAid is also conducting an investigation to find out whether its staff have been colluding with Kemsa to sell the drugs donated to Kenya to some private pharmacies in the country.
During the Senate Health Committee held on Friday attended by Health Cabinet Secretary, Mutahi Kagwe, the legislatures raised integrity issues on the agency claiming that most pharmacies in counties are selling USAid labelled drugs to Kenyans exorbitantly.
“We have some serious issues that we need to work on if we still will depend on donors for assistance, in Kisumu, some of the chemists are just selling drugs donated, who is giving them the drugs” asked Dr James Nyikal, MP Seme Constituency, Kisumu County.
Mr Kagwe told the senators that lack of trust by USAid to Kemsa management is the main cause of the stalemate.
The Ministry of Health and the donors have since formed a committee to look into issues surrounding the agency though it might take a while before a solution is arrived at since the CS indicated that his efforts to restructure the agency were being delayed by the prosecution agencies.
“Right now there is very little I can do, the agencies are still doing their work and no one has been prosecuted. We are hoping that very soon we are going to see a change in the whole system. We want to see individuals being prosecuted. We need to move with speed,” he said.
However, the donors have insisted that before everything is put in order, they will use the third party and not Kemsa. This has since brought tension between the two entities with the government insisting that it will not sign a contract with the said third party.
Mr Kagwe said that the ministry is not going to sign any contract with an organization they know nothing about to bring drugs into the country unless the donor does that and takes care of the tax issues.
“We do not want to work with that private company, it has several accusations from other countries. Should the donors continue engaging them, then it has to be their issue and the Kenyan government is not going to be part of their deals,” Mr Kagwe said.
With stalemate, it means that the fate of the donations in future is not yet clear after the donor insisted on bringing a third party while the ministry has warned that they will not sign a contract with any company.
This means that every time the consignments are brought, there will be a stalemate between the two on who clears the taxes, and this will definitely have an impact on the lives of 1.5 million Kenyans who depend on the drugs.
Mr Kagwe had earlier indicated that they had solved the tiff with the donor and they had since released the drugs to counties, however, in a new twist, USAid has since confirmed to the Nation that they had not resolved any issue with the government until everything is resolved putting those in dire need of the drugs in a limbo.
“It is important to clarify that the medications referred to in parliamentary testimony are actually from another donor–Global Fund–and not from USAID. As the largest contributor to the Global Fund, the United States is proud that we can once again help the people of Kenya. The donation from the American people through USAid of medications and medical supplies that were stuck at Mombasa port remain in USAID’s possession until our deliberations conclude,” the US embassy spokesperson told the Nation.
Stuck at the port, as per the document are 258,954 packs of Tenofovir, Lamivudine Dolutegravir (TLD), the consignment arrived in January 18, after an application for the import permits and approval of import declaration form were submitted on December 16, 2020 and resubmitted in January 5, 2021 the appointed agent.
Before the stalemate, the donor was expected to list government agencies (Kemsa) and Ministries (Ministry of Health) as consignees in order to qualify for duty and tax waivers. This means that the consignment would have been consigned to the Kenyan government, says the PPB.
Any importations through private firms do not qualify for special exemptions and are subject to the normal clearance procedure, which involves inspection at the port by the Kenya Bureau of Standards (Kebs) and imposition of taxes, including the railway development levy (RDL).