Crisis Management

Crisis Management

A Brief Background of The Incident and How the Company Was Affected in The News

One of Kenya’s most recent crises is the Kenya Medical Supplies Agency (KEMSA) crisis. Medical supplies for the fight against the Coronavirus infection were said to have been siphoned off by the agency (Mutai, 2020). By August, the number of Covid19 infections had begun to fall in Kenya, despite the agency’s alleged corruption and fraud, according to reports. Several high-ranking KEMSA officials resigned following the incident. As a result of a television report alleging rampant corruption at KEMSA, doctors went on strike, resulting in anti-corruption protests around the country. The company ran out of money several months after the Covid-19 procurement blunder left it with Sh6.34 billion in unsold stock. Following this decision by members of the Kenyan parliament, KEMSA was unable to obtain medical supplies in the case of another Covid-19 epidemic.

KEMSA claimed it possessed billions of dollars worth of Covid-19-related products, including masks, that have not been sold since the repeal of a provision that forced counties to acquire medicine and medical equipment from KEMSA. If the second wave of Covid-19 infection occurred, there would be no money to import medical supplies because the Treasury Department rejected KEMSA’s additional funds request (Mutai, 2020). To compensate for its recent finding that the National Health Laws were unconstitutional, the agency was awarded exclusive permission to sell drugs and medical equipment throughout the United States of America’s state governments. According to Mutai (2020), Covid-19 shares worth Sh6.34 billion purchased by KEMSA at an excessive price become worthless, leaving the company in a predicament. A forensic audit indicated that KEMSA would suffer a loss of Sh2.33 billion if the products were sold at their then market value. This scandal made Covid-19 instances in Kenya rise by 56.9 percent one month to 64,588 from the previous month’s 41,158. Fatalities rose by 51.8 percent from October 10, from 769 to 1154. Medical authorities claimed that a second wave of the disease, identical to what is currently sweeping Europe, would emerge and result in the country being placed on lockdown.

Critique How the Agency Reacted

Taking responsibility for an error and coming up with innovative solutions to fix the problem are two options to consider if one ever finds themselves in this position. This blunder forced KEMSA to take action and seek to improve the situation. I believe that it was wrong for the company to reach out about three months after receiving the news. Another reaction was that the company began posting a list of its suppliers on the Public Procurement Information Portal, the official government contracting website, at the direction of President Uhuru Kenyatta. Because of this, Kenyans then had knowledge of the Sh7.8 billion in contracts issued and the hundreds of companies who stand to gain significantly from the lucrative Covid-19 auctions. The State Drug Agency’s direct procurement party, which made the Covid-19 billionaires overnight, was ultimately able to provide the complete picture of its patrons thanks to this strategy, which I feel was the wrong direction. There is a big difference between admitting when one is responsible for the problem and taking action to fix it. This quarrel will never happen again because the leading cause has been discovered, and a long-term cure has been implemented. 

Reference

Mutai, E. (2020, November 11). Kemsa in cash crisis as stock unsold. Business Daily. https://www.businessdailyafrica.com/bd/economy/kemsa-in-cash-crisis-as-stock-unsold-3019020