Reveal the names of Covid-19 millionaires now, IMF tells Kenya

Kenya Medical Supplies Authority (KEMSA). [Wilberforce Okwiri, Standard]

Kenya has until tomorrow midnight to reveal the names of owners of companies that benefited from the controversial Sh7.8 billion Kemsa scandal.

This ultimatum was given by the International Monetary Fund (IMF), which wants the government to lay bare the owners of companies that were contracted by the Kenya Medical and Supplies Authority (Kemsa) as part of an agreement they struck in the ongoing Sh256 billion programme.

The Washington-based institution noted that while Kemsa published reports with information on awarded contracts and beneficial ownership of the companies, the same had not been put in the Public Procurement Information Portal to be accessed by members of the public.

“This key planned step should be implemented as a matter of priority,” said the IMF, putting the date of this publication to the end of June (tomorrow).

Publication of the names might unmask some of the shadowy wheeler-dealers that have lined their pockets at the expense of a citizenry that has been hit hard by the crippling effects of the Covid-19 pandemic.

In its second review of the programme, the IMF said with revelations of widespread breaking of procurement laws, the government had to speedily investigate and prosecute those who were responsible for looting of public funds at the medical agency.

The government is said to have completed audits of all Covid-19-related expenditures for the Financial Year 2019-2020, which involved audits of all spending by State corporations and forensic audits of Covid-19 funds utilised by national government entities, Kemsa and counties.

Last year, the government received loans of Sh200 billion from multilateral institutions, including the IMF and the World Bank.

The government indicated that it had put much of the IMF cash that it received last year, about Sh78.3 billion, into healthcare and liquidity support, including paying pending bills and refunding taxes.

Other beneficiaries of the IMF funds, the National Treasury revealed, included cash transfers to the elderly, women and the vulnerable; youth unemployment programme as well as support.

The IMF lauded the government for the production of multiple audits, which provided a high degree of transparency.

But the Fund wants the government to go after all those who have been implicated in the Kemsa scandal, a list that is said to include senior government officials, prominent politicians and businessmen.

“Given the procedural and transactional issues revealed, especially in the KEMSA audit, follow-up of audit findings is critical, including further investigation and prosecution of criminal violations and actions to address the identified shortcomings,” said the IMF.

Entire board

President Uhuru Kenyatta in April sent the entire Kemsa Board of Directors packing in the wake of multi-billion-shilling scandals plaguing the medical supplies agency.

In August 2020, Kemsa, which had been legally tasked with procuring Covid-19 protective equipment, caught the attention of the president after being put on the spot over looted Sh7.8 billion.

A report by Auditor General Nancy Gathungu on the procurement scandal at Kemsa revealed that Sh2.3 billion was lost in procuring Covid-19 medical supplies.

Gathungu, who tabled the report before the Senate in September, revealed how billions of shillings were unaccounted for and how there was no evidence of budgetary approval by relevant authorities.

The auditor-general concluded that Kemsa irregularly utilised the Universal Health Coverage and budget to procure Covid-19-related items worth Sh7.6 billion.

“The procurement process was not initiated based on need assessment and planning resulting in over-procurement of Covid-19 related stock worth Sh6.3 billion that is still being held at KEMSA warehouses. 97 per cent of the stock has been in the Kemsa warehouses for more than three months implying inadequate market forecasting and planning practices,” said the audit report.

The audit found numerous violations of the Procurement and Public Finance Management Acts and inefficiencies in the procurement process.

This prompted a parliamentary investigation and subsequently a recommendation by the Ethics and Anti-Corruption Commission (EACC) that the Director of Public Prosecutions (DPP) opens charges against individuals involved.

The first phase of investigations has centred around the alleged misuse of Sh7.8 billion meant for the purchase of emergency PPE for healthcare workers and hospitals across the country.

Investigators from the EACC found that several laws on public procurement were flouted during the awarding of the tenders.

As part of the IMF programme, which is aimed at increasing revenues and slashing non-essential spending to reduce debt vulnerabilities, the government is also expected to crack the whip on graft.

Thus, Kenya will have to publish the beneficial owners of all companies that win public contracts and ensure transparency and accountability in procurement.

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