Auditor General Highlights Kenya’s Sh8.3 Billion Loss Due to Undelivered Covid-19 Vaccines

Kenya may face a loss of Sh8.3 billion over undelivered Covid-19 vaccines as highlighted in an audit report by Auditor General Nancy Gathungu. The Ministry of Health committed to purchasing 13.33 million vaccine doses, but only 1.80 million were delivered. Delayed payments have led to additional financial penalties, exacerbating the situation amidst concerns over procurement accountability.

Recent findings from an audit led by Auditor General Nancy Gathungu indicate that Kenya may incur a significant financial loss of Sh8.3 billion due to payments made for Covid-19 vaccines that were not fully delivered. This situation raises serious concerns about the government’s accountability in its public expenditure.

In 2021, the Ministry of Health secured an agreement with the Africa Vaccine Acquisition Trust (AVAT) and the Export-Import Bank (AFREXIMBANK) to procure a total of 13.33 million doses of vaccines for approximately Sh7.46 billion. Contrarily, only 1.80 million doses were actually delivered, resulting in a shortfall of 11.52 million doses.

Despite informing the supplier of a reduced need for the remaining doses, Kenya is obligated under contract to settle the payment for the entirety of the order. As of August of the last year, 2.72 million doses were reported manufactured but not dispatched to Kenya, with indications that these doses would be destroyed as they were no longer deemed necessary.

Further complicating matters, the delayed payments have accrued interest penalties totaling Sh930.59 million, thereby exacerbating the financial implications for the country. A statement from AVAT noted a remaining obligation of $64.88 million, or equivalent to Sh8.38 billion, outstanding as of May 2024.

The negligence regarding comprehensive assessments by health officials during this procurement process has led to questions about accountability. The Auditor General cautioned that the anticipated value from the vaccine supply agreement has not been realized and that the government risks incurring additional interest due to ongoing payment delays.

This report invokes memories of past Covid-19 procurement scandals within the Kenya Medical Supplies Authority (Kemsa), where substantial taxpayer funds were squandered through inflated pricing and fraudulent dealings. Previous investigations and recommendations for accountability have yet to yield results, leading to continued uncertainty in enforcing reimbursements from suppliers identified as overcharging.

During the pandemic, Kenya experienced over 350,000 Covid-19 cases and over 5,000 fatalities, highlighting the urgency for vaccine procurement. Nonetheless, mismanaged resources present ongoing challenges. The government has sought the waiver of interest penalties from AFREXIMBANK, pending approval, amid these financial difficulties.

The audit report unveiled by Auditor General Nancy Gathungu underscores the dire financial implications for Kenya, stemming from undelivered Covid-19 vaccines, amounting to a potential loss of Sh8.3 billion. The series of procurement mismanagement raises critical questions about accountability, highlighting the necessity for stringent evaluations in future public health dealings. As the government seeks to address these financial burdens, the delays in settlement signify ongoing risks of further financial repercussions, necessitating transparent action to regain public trust.

Original Source: eastleighvoice.co.ke