The Kenya Medical Supplies Agency (Kemsa) has run out of cash after Sh6.34 billion was tied up in stock that it can’t sell in the wake of Covid-19 procurement scandal.
The agency says removal of the rule that compels counties to buy medicine and medical equipment from Kemsa has left with unsold stock worth billions, especially Covid-19 related kits like masks.
This means that Kemsa, whose request for additional funding from Treasury was frozen by MPs, lacks cash for emergency importation of medical supplies amid fears of a second wave of Covid-19 infection.
“As we speak, we do not have a budget for other outbreaks of disease. There is no provision to spend on emergencies,” Edward Njoroge, the Kemsa chief executive told the Public Investments Committee (PIC).
“Stocks remain high as counties were allowed to procure outside Kemsa. There was no agreement between Kemsa and counties that they will buy Covid-19 items once we bought,” Mr Njoroge said.
The National (Amendment) Health Laws, which the high court recently declared unconstitutional, gave Kemsa exclusive right to supply medicine and medical equipment to the county governments.
Kemsa is currently stuck with Covid-19 stocks worth Sh6.34 billion that were purchased at exorbitant prices.
A forensic audit report shows that Kemsa may realise a loss of Sh2.33 billion if the products are to be sold at the current market price.
Mr Njoroge yesterday said the agency could only recover Sh4.2 billion if sold at the prevailing market rates. The cash crunch at Kemsa is emerging in a period when Kenya has witnessed a surge in Covid-19 cases, setting the stage for increased need for reagents, testing kits and ventilators.
Kenya has 64, 588 confirmed cases of the Covid-19 from 41,158 a month ago, reflecting a 56.9 percent growth. Fatalities have increased to 1, 154 from 769 in October 10, representing a 51.8 percent jump.
Local health officials have been warning of the second wave of the pandemic akin to what is happening in Europe that has seen several countries reinstate lockdowns.
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