From Kagwe to Duale, why SHA scam is deep-rooted rot

A probe into a suspected Sh24 billion Social Health Authority (SHA) fraud has reopened old wounds at the Ministry of Health, that has long been branded a hotbed of corruption.

The revelations of massive false claims at SHA, an agency established to anchor President William Ruto’s flagship universal health coverage programme, have once again cast Afya House — nicknamed Mafia House— into disrepute.

The saga is a reminder of past mega scandals at the ministry, where billions of taxpayers’ shillings have been siphoned under the watch of state agencies meant to protect public resources.

But instead of punishment, those linked to the rot have often been rewarded with promotions and political protection.

Beatrice Kairu, a health economist, questioned how Sh104 billion was spent on SHA’s digital system without following the Public Finance Management Act.

“The system was meant to detect fraud, yet it is Kenyans — not SHA — who detected the fraud. This shows we lack checks and balances,” said Kairu.

She further criticised the overlapping roles of regulatory bodies, particularly the Kenya Medical Practitioners and Dentists Council, which licenses and accredits facilities: “That is a clear conflict of interest. Where are the checks and balances?”

She faulted the Ethics and Anti-Corruption Commission (EACC) for failing to act. For Kairu, the latest scandal at SHA is simply “a continuation of the corruption culture at Afya House”.

Kiroko Ndegwa, a lawyer, regretted that despite Kenya Kwanza administration promising Kenyans a foolproof scheme to replace the scandal-ridden NHIF, SHA has become “an elephant project” marred by corruption.

“What have they done to ensure those who stole from NHIF are brought to book? Where is the money that SHA has lost? Has the State done anything to secure the money, and what is the role of SHA officials and ministry officers who aided in the payments of these claims?” 

Ndegwa challenged Cabinet Secretary Aden Duale’s stance on the scandal, accusing him of double-speak.

“He (Duale) is the epitome of failure. On one hand, he parades over 1,000 files as evidence of fraud, yet he says he relies on intelligence reports and seems unsure whether there has been corruption at SHA. Which is which?” 

This week, Duale handed 1,188 files to the Directorate of Criminal Investigation following suspected fraudulent SHA claims running into billions of shillings.

The authority replaced the National Health Insurance Fund (NHIF) that also reported cases of fraud, which saw the then Health CS Susan Nakhumicha suspend several hospital, with top bosses dismissed.

In several reports, the Office of the Auditor General flagged corruption dealings at the Fund, where multiple payments were made to services not rendered.

In other scams at the ministry, Kenya also lost a Sh3.7 billion tender to an international supplier following illegal procurement by the Kenya Medical Supplies Authority (Kemsa) with the influence from top government official.

The scandal led to sacking of the Public Health Principal Secretary, whereas Kemsa Chief Executive Terry Ramadhani was suspended before being awarded an ambassadorial position.

In yet another scandal at Kemsa, Sh7.8 billion was lost during the Covid-19 pandemic. Four years later, there has been no prosecution despite President Uhuru Kenyatta ordering government agencies to take action.

A report by the Public Investments Committee released in September, 2021, shows that procurement was done without approval of the budget.

The then Chief Executive Jonah Manjari told the committee that Kemsa failed to conduct market surveys to establish the market rates for medical supplies, and engaged companies that had not been prequalified.

Among individuals illegally awarded tenders was James Njuguna, who told the committee that his coincidental walk outside Kemsa premises won him a tender to supply personal protective equipment worth Sh180 million.

In the same year, controversy deepened between the government and USAID over distribution of Sh1.1 billion worth of ARVs, with the state demanding the donor pays Sh40 million tax for the consignment.

During his tenure as CS, Mutahi Kagwe lamented the deep-rooted corruption, saying the ministry had “its share of criminals”.

He said rogue officials collude with unscrupulous businesspeople to loot taxpayers’ money through fraudulent tenders and fake procurement orders, some even bearing the official ministry logo.

At the time, DCI was probing blood donations alleged to have found way to Mogadishu.

But Kagwe did not the walk before he left in 2022.

To weed out graft at the ministry, Prof XN Iraki said technology is key.  “Technology is as good as human behaviour and political will. The latter is missing,” said the economist lecturer at the University of Nairobi.

Kenya Healthcare Federation Chief Executive Officer Tim Theuri attributed the scandals to selective application of law. “There is a lot of interference by advisor, especially the last three years. Top officials are doing business with the government. This is when most scandals have been reported,” he said.