Why activists are pushing for dissolution of SHA

A section of Social Health Authority(SHA) building on March 5, 2025 located at Upper Hill in Nairobi. [Edward Kiplimo, Standard]

A dramatic courtroom showdown unfolded at the Milimani High Court yesterday that threatens to collapse the Kenya Kwanza flagship medical cover that anchors the universal health coverage plan.

Petitioners challenged the Sh104.8 billion Social Health Insurance Fund (SHIF) digital system, pushed for its disbandment as they accused the government of secrecy, illegal procurement and constitutional violations.

They told the court that the contract was “void from the beginning” and should be quashed in its entirety.

Appearing before Justice Bahati Mwamuye, Nakuru-based doctor Dr Magare Gikenyi and Busia Senator Okiya Omtatah mounted a sustained attack on the controversial deal, insisting it was anchored on unlawful procurement methods, lacked public participation and was driven by an entity with no legal authority to procure it.

Dr Magare opened his submissions by accusing the government of deliberately concealing key procurement documents from public scrutiny, contrary to the law.

“The second respondent deliberately and illegally refused to publish the procurement and the contract documents on the Internet as required by section 138 of the PPDA Act,” Dr Magare told the court.

He said the petitioners had obtained documents exposing what they described as a “vicious fraud scheme” involving the Safaricom-led consortium, adding that some of the records were supplied by whistleblowers whose identities he declined to disclose. At the heart of the dispute lies a fundamental question of procurement authority.

The petitioners argue the Principal Secretary for Medical Services lacked legal standing to procure the Integrated Health Management System.

“The Digital Health Authority CEO, and not the Principal Secretary for Health, is the procuring entity, my Lord,” he said, adding that section 105 of the Health Act did not authorise the ministry to procure the system.

Dr Magare further submitted that the Digital Health Act had overtaken earlier provisions.

“There is an implied repeal of section 105 of the Health Act by the Digital Health Act,” he said.

On his part, Senator Omtatah accused the Ministry of Health of entering into two unlawful contracts, both of which he said should be nullified.

He revealed that two separate contracts were involved including an initial Sh48 billion tender that Safaricom declined, followed by the controversial Sh104 billion contract.

“There were two contracts. One for Sh48 billion… then there was a second contract of Sh104 billion. We have argued that both contracts were void,” Omtatah told the court.

He also faulted the procurement method used, saying it did not exist in law.

Omtatah further told the court that Safaricom should have been disqualified after declining the first Sh48 billion contract.

“Upon declining the first contract of Sh48 billion, Safaricom was disqualified from participating any further in this contract from the tender documents themselves,” he told the court.

The senator questioned the entity named as the procuring authority.

“They came up with a procurement method that does not exist in law, ‘specially permitted procurement- single source’. We say that kind of procurement method does not exist in law.”

“The Government of Kenya does not have a vote. Even the President has his own private vote in State House,” he argued.

“So when you talk about the Government of Kenya procuring, it doesn’t make sense.”

The senator also accused the state of failing to conduct a mandatory market survey.

“They never even did a market survey, my Lord. Conducting a market survey is not optional. The law requires it. Common sense requires it,” he argued.

Omtatah described the financial structure of the deal as irrational and fraudulent.

The petitioners also faulted the timing of the execution and payment terms of the Sh104.8 billion contract, arguing that it exposed taxpayers to payments long before any services were delivered.

The petitioners also faulted the introduction of an 8 per cent “finance cost” in the contract.

“They are charging a finance cost of eight per cent, yet they are not a financial institution. They are commercial traders,” Omtatah said.

On the broader impact, he warned that the SHIF rollout undermined the constitutional promise of universal healthcare.

“Universal health care should be funded from ordinary taxes, not from member contributions. Universal means everybody, those who can pay and those who cannot,” he said.

However, the government mounted a fierce defence of the deal, insisting that the procurement and implementation of the system were lawful and in the public interest.

Through Senior Counsel Kioko Kilukumi, the Ministry of Health, its Cabinet Secretary and Principal Secretary pushed back against allegations of procurement irregularities raised by Omtatah and his co-petitioners. Kilukumi told the court that the Attorney General vetted and approved the Safaricom Consortium deal, adding that the Supreme Court had already cleared the procurement process.

The lawyer told the court that the contract had undergone thorough legal scrutiny and was approved by former Attorney General Justin Muturi after extensive consultations with the Ministry of Health through former Health CS Susan Nakhumicha and the National Treasury.

“The Attorney General reviewed the agreement clause by clause before approving it,” Kilukumi said, adding that the legal review followed detailed inter-ministerial engagements.

“The green light from the Attorney General is written in the most clear language, that there cannot be any confusion about it,” he emphasised.

He further warned that suspending the digital platform would cripple the healthcare system, noting that it is currently the only integrated health information technology system linking patients, healthcare facilities, and service providers nationwide.

“This is the only health system in existence that connects patients to health facilities and caregivers. Suspending it would disconnect millions of Kenyans from essential healthcare services,” he told the court.

“You are being asked to suspend the only health system that is now in existence. This system is the one that connects patients to health facilities and to health caregivers.”

Even if the court finds any constitutional defect, Kilukumi urged Justice Mwamuye to suspend such a finding to allow the government time to regularise the process.

Justice Mwamuye fixed judgment in the matter for March 12, 2026.