How the looting at KPC, NHIF affects you

Every time a penny is stolen at the National Hospital Insurance Fund (NHIF), a patient somewhere in the country will be having a penny less to pay for their medical bills.

Despite being the only public insurer and shouldering the hopes of millions of Kenyans across the country whenever they fall sick, NHIF continues to be one of the most plundered public institutions. Three major scandals have rocked NHIF since 2001, with the latest being the one involving the procurement of a system to collect money where over Sh1 billion was siphoned from the health insurer.

To put this number in perspective, last year, NHIF spent Sh1.3 billion on cancer treatment, meaning at least Sh7 out of every Sh10 that was used for cancer treatment was stolen. The free maternity, known as Linda Mama, cost the health insurer Sh1.4 billion and stealing Sh1 billion is equivalent to taking away 70 per cent of this amount.

Looting of Sh1 billion at NHIF is also equivalent to stealing contributions made by 166,667 of their members paying Sh500 each for 12 months. The NHIF also spends less than Sh1 billion a year on optical, dental, MRI, kidney transplants or specialised surgeries. It simply means that any of these services would easily have been doubled had the money not been stolen.

It is not yet clear just how much money has been stolen at NHIF but the probe shows the plunder has gone on for over 17 years. The theft at the institution is also a big mockery on the Jubilee government’s efforts to have Universal Health Care in Kenya as part of its Big 4 Agenda.

When it comes to the theft at the Kenya Pipeline Company (KPC), the hit on consumers is almost immediate. All inefficiencies and losses are passed on to the consumer during the monthly fuel review done by the Energy Regulatory Commission (ERC), the sector regulator. In turn, these costs make fuel more expensive than it should be, which in turn translates to higher costs of production and higher prices of goods and services. Fuel also affects cost of transport, and this is the major cost that affect basic items such as food.

For instance, on top of the Sh2 charged for every litre transported by the pipeline, the ERC also allows oil marketing companies to charge consumers for pipeline losses and depot losses, which are always at about 50 cents per litre.

The consumer has to bear all these costs in addition to other taxes and margins of oil marketing companies. Currently, the taxes and levies charged on oil add up to 30 per cent of the pump price, while the oil marketer’s margin is about 10 per cent.

The KPC lost over 20 million litres of oil and this means that for the losses alone, consumers will have to pay at least for both the losses and the oil that never was.

The Director of Public Prosecutions (DPP), who has been championing both the moral and judiciary fight against corruption, says theft of public resources denies Kenyans an opportunity to get better services. “I have noted the emerging trend of corruption as an interwoven scheme involving persons employed by the organisation concerned, family members and friends. It is also clear most of the firms involved in such schemes are shadowy and incapable of delivering quality service for the works assigned to them,” DPP Noordin Haji said.

While approving the arrest and prosecution of Kenya Power managers, he said: “No doubt weeding out corruption from our public entities will guarantee Kenyans improved service delivery and enhance protection of public property.”