The Kenyan government’s Kshs 104.8 billion Social Health Authority (SHA) system has come under sharp criticism after Auditor General Nancy Gathungu revealed that the state neither owns nor controls the infrastructure, despite the massive public investment. The revelation raises serious concerns about the project’s transparency, financial sustainability, and long-term viability.
According to the Auditor General’s report, the ownership of the system and all intellectual property rights remain in the hands of the private consortium contracted to develop it. This means that public funds and SHA member contributions are being funneled into a system over which the government has little authority. Gathungu warned that this arrangement significantly limits state oversight and poses a major risk to public funds and healthcare delivery.
Further scrutiny of the project’s procurement process has exposed glaring legal violations. The contractor was selected through a Specially Permitted Procurement Procedure rather than an open and competitive bidding process. This directly contravenes Article 227(1) of the Kenya Constitution 2010, which mandates fair, equitable, transparent, and competitive acquisition of goods and services. Additionally, the project was not included in the government’s procurement plan or medium-term budget framework, violating Section 53(7) of the Public Procurement and Asset Disposal Act of 2015.
The financing model anticipates Ksh.111 billion in revenue over the next decade, sourced from SHA member contributions, health facility claims, and track-and-trace solution charges. However, the absence of a baseline survey raises questions about the viability of these projections. Furthermore, the model includes a 5% deduction from health facility claims, effectively increasing healthcare costs for citizens.
The Auditor General’s report also flagged contractual clauses that severely limit the government’s autonomy. The contract explicitly prohibits the state from developing a competing system, restricting innovation and adaptability to technological advancements. Dispute resolution is assigned to the London Court of International Arbitration, bypassing Kenya’s legal framework.
In addition to financial and procurement concerns, the report highlighted broader management failures, including noncompliance with employment laws and insufficient staffing for people with disabilities. With only 2.3% of employees being persons with disabilities far below the required 5% the government is failing to meet its own public service policies.
These revelations call into question the government’s decision-making and transparency in handling such a crucial healthcare initiative, further fueling public distrust in the project
