Kenya risks a Sh8.3 billion loss due to payments for undelivered Covid-19 vaccines, as an audit reveals that the government overcommitted under a contract with AVAT, resulting in penalties and accountability concerns. The financial implications reflect broader issues of procurement mismanagement.
Kenya is facing a potential financial loss of Sh8.3 billion due to undelivered Covid-19 vaccines, according to a recent audit report by Auditor General Nancy Gathungu. The Ministry of Health made payments for doses that were never fully shipped, raising significant accountability concerns regarding public spending. Reports indicate that 11.52 million doses remain undelivered despite an agreement with the Africa Vaccine Acquisition Trust (AVAT) to procure a total of 13.33 million doses for Sh7.46 billion.
The agreement stipulated that while only 1.80 million doses were delivered, Kenya must pay for the full order, even though it later indicated it no longer required the remaining doses. As of last August, 2.72 million doses had been manufactured but were not shipped, with reports stating that this unshipped component was marked for destruction. Interest penalties on delayed payments have also accrued, adding Sh930.59 million to the financial burden.
The report highlights that Kenya has an outstanding obligation of $64.88 million (approx. Sh8.38 billion) to AVAT. Due to the financial penalties linked to these undelivered vaccines, queries have arisen about the efficacy of health officials in assessing the need for purchasing such large quantities of vaccine doses. The Auditor General emphasized that the government risks accruing further interest with ongoing payment delays and that the value from the original contract has not been realized.
This issue echoes past Covid-19 procurement scandals that incurred significant taxpayer losses at the Kenya Medical Supplies Authority (Kemsa). Despite 2021 recommendations for the prosecution of Kemsa officials over irregularities in procurement, no senior officials have been held accountable for the inflated pricing or overstocking that led to these losses. The National Assembly previously directed suppliers who had overcharged the government to refund the excess payments, although enforcement of this directive remains ambiguous.
Kenya’s Covid-19 pandemic response saw over 350,000 reported cases and more than 5,000 fatalities. While the urgency to procure vaccines was understandable, the mismanagement highlights severe implications for the country’s finances. The government has requested AFREXIMBANK to waive the accrued interest penalties, but this request is still pending approval.
The Kenya Ministry of Health is facing significant financial repercussions due to undelivered Covid-19 vaccines, amounting to Sh8.3 billion. The government’s obligation to pay for vaccines that were not delivered raises questions about procurement accountability. Past scandals have shown a trend of mismanagement in health-related procurements, leaving taxpayers vulnerable to losses without accountability. The situation exemplifies the need for careful oversight and evaluation in public spending, particularly in health emergencies.
Original Source: eastleighvoice.co.ke
