Auditor shines fresh light on Kenya’s opaque deals
By Victor Mukabi, March 5, 2025Kenya Kwanza administration’s tendency to conceal crucial information from the public continues to raise eyebrows.
The latest is disclosure by the Auditor-General Nancy Gathungu that the government has no control over controversial Sh104.8 billion Social Health Authority (SHA) system. A report by the Auditor indicates that the consortium awarded the contract to run the system retains full ownership of its components and intellectual property rights.
The government will only receive ownership of the physical infrastructure, leaving the system’s core functions in private hands. This is contrary to the claims by the Kenya Kwanza leaders who boast of transparency in every discussion. Speaking during a meeting with the National Assembly departmental committees and stakeholders at a Nairobi hotel, Gathungu confirmed that the vendor is still in control of the system.
“The system ownership, I know you have summoned people over the issue but that has not been resolved. The vendor is still in control of the system and of course we know there is a convenience fee, also that has not been provided, a special report will be submitted in due time,” she revealed.
Estimated to cost Sh168 billion to be fully functional – as indicated in the line ministry’s website, the project has seen most Kenyans contribute different portions from their hard-earned money depending on their income level towards the kitty but they are yet to enjoy the full benefits of the system.
Being contributed to on a monthly basis, it is expected to significantly cater for medical expenses for Kenyans, but with the recent developments in the country, concerns remain high on the whereabouts of the contributions.
The Auditor-General noted that there are key concerns that may be hampering the achievement of Universal Health Coverage (UHC) despite Sh204.5 billion allocation and the rollout of the Social Health Insurance Fund (SHIF) estimated to cover over Sh15 million.
“The audit reports for FY 2023/2024 for the State Departments of Medical Services and Public Health identify underfunding to key programmes, delays in service delivery, and shortages of medical supplies and equipment, inadequate staffing, poor infrastructure, and disruption of healthcare services,” she noted.
Additionally, high healthcare costs, limited rural outreach, and unresolved critical governance and structural issues threaten the sector’s ability to provide seamless accessible and quality care, underscoring the need for urgent reforms and strategic investments.
Since January, Kenyans have been unable to get medical attention from various health institutions that offer services under the health scheme as result of delayed disbursements by the government and the technicality of the system.
Due to lack of funding, they have been unable to cater for critical medical equipment and other expenses making it difficult to offer the services to Kenyans.
“Eighty-nine per cent of hospitals reported that the SHA claims portal remains non- functional, making it impossible to process reimbursements. Hospitals cannot track claims, leading to massive payment delays,” Brian Lishenga, the chairman of the Rural and Urban Private Hospitals Association of Kenya (RUPHA) said in a statement last week.
Private hospitals which are also businesses, owed about Sh30 billion by the government under the defunct National Health Insurance Fund (NHIF), have been severely impacted by this factor forcing them to put assets on auction to settle their liabilities.
Just like the government, they have been receiving supplies from individual businesses with the projections of paying them later. The suppliers on their part have also been taking loans to meet the demand by the facilities, but now that there is the issue of funding, all of them are defaulting on their mandates leading to non-performing loans (NPL).
Currently at 16.5 per cent, according to Central Bank of Kenya, (CBK), high non-performing loans are making it difficult for commercial banks to adjust their lending rates to the private sector hence stifling growth of the different sectors.
Despite the challenges that the health facilities have been facing, the government has still been pushing them to offer full services, according to the system’s provisions.
RUPHA, representing hundreds of private and faith-based healthcare facilities nationwide, under the Social Health Authority (SHA) have been providing emergency treatment and pre-booked surgeries following the suspension of SHA services.
Lishenga explained that the new SHA outpatient reimbursement model, which proposes to pay hospitals less than Sh75 per patient per month, is completely unrealistic.
“Under this model, no hospital can pay doctors and nurses, procure life-saving drugs, maintain equipment and operations. This model is a direct threat to patient safety, forcing hospitals into cost-cutting measures that will compromise the quality of healthcare,” he said.