The Kenya Medical Supplies Authority (KEMSA) has recorded a KSh 2bn surplus, reversing a KSh 779.1 million deficit in the prior year after revenue rose 9% to KSh 9.49 billion, while total expenses fell 20% to KSh 7.43 billion.
- •KEMSA received KSh 1.5 billion in recapitalization funds from the National Treasury and KSh 2.94 billion from the Ministry of Health for health products procurement.
- •The Auditor-General listed 41 prior year audit matters spanning FY 2022/23 and FY 2023/24 that remained unresolved, which the entity's management had committed to addressing outstanding issues by 31 December 2025.
- •The qualified audit opinion, a 41% medicines order fill rate, and KSh 6.28 billion in outstanding receivables expose the fragility beneath the headline number.
The Auditor-General issued a qualified opinion on the financial statements, citing four material concerns: inaccuracies in receivables, inaccuracies in property, plant and equipment, inappropriate disclosure of KSh 7.61 billion in donor-owned inventory that KEMSA does not legally own or control, and failure to recognize a liability for KSh 21.4 million in damaged third-party stocks.
| Metric | FY 2024/25 | FY 2023/24 | YoY Change |
|---|---|---|---|
| Total Revenue | 9.493Bn | 8.693Bn | ▲+9.2% |
| Total Expenses | 7.433Bn | 9.200Bn | ▼-19.2% |
| Surplus/(Deficit) | 2.006Bn | (779.1Mn) | ▲+357.5% |
| GoK Recapitalisation Received | 1.500Bn | — | N/A |
| MoH HPT Procurement Funds | 2.947Bn | 1.188Bn | ▲+148.1% |
| HPT Distributed (Value) | 24.698Bn | 25.738Bn | ▼-4.0% |
| Receivables (Exchange) | 6.284Bn | 6.749Bn | ▼-6.9% |
| Average Collection Period | 487 Days | — | N/A |
| Trade and Other Payables | 5.708Bn | 6.907Bn | ▼-17.4% |
| Capital Order Fill Rate | 41% | 52% | ▼-11pp |
| Programme Order Fill Rate | 79% | 72% | ▲+7pp |
| Order Turnaround (Hospitals) | 19.5 Days | 19.5 Days | — |
| Order Turnaround (PHFs) | 24.2 Days | 20.1 Days | ▼+4.1 Days |
| Expired Commodity Losses | 547.1Mn | 371.4Mn | ▼+47.3% |
| Cash and Cash Equivalents | 3.079Bn | 1.730Bn | ▲+78.0% |
Deposits, Receivables
KEMSA's cash and cash equivalents rose 78% to KSh 3.079Bn at year-end from KSh 1.730Bn in the prior year. The distribution across banks shows a notable new entry.
NBK remained the dominant custodian with KSh 1.057Bn across two accounts, followed by Equity Bank at KSh 951.6Mn across four accounts and Co-operative Bank at KSh 774.4Mn. Sidian Bank held KSh 341.0Mn of KEMSA's cash at 30 June 2025, the first appearance of the lender in the authority's cash balances, accounting for roughly 11% of total holdings.
Receivables from exchange transactions stood at KSh 6.28 billion at year-end. County governments accounted for KSh 2.7 billion of that balance, but debt confirmations from the 43 counties showed only KSh 1.15 billion outstanding, leaving an unexplained variance of KSh 1.54 billion. A further KSh 2.99 billion had been outstanding for more than one year with no agreed payment plan and no provision for bad debts. The average collection period reached 487 days.
On the other side of the ledger, KEMSA owed suppliers KSh 5.71 billion, with KSh 1.73 billion outstanding for more than 90 days and no approved payment plan in place.
Delivery Failures
KEMSA distributed health products valued at KSh 24.7 billion to more than 11,500 public health facilities during the year. Core delivery metrics, however, remained well below target. The capital order fill rate for essential medicines fell to 41% against a 90% target. For donor-programme commodities covering HIV, TB, family planning, and malaria, the fill rate was 79%, also short of the threshold.
Order turnaround times deteriorated to 19.5 days for hospitals against a 7-day target, and 24.2 days for primary health facilities against a 10-day target. Six of KEMSA's seven regional warehouses operated as passive holding stores with no distribution capacity, with all orders still routed through the Nairobi central hub. Expired commodity losses totaled KSh 547.1 million for the year.
Governance and Infrastructure
A KSh 499.7 million SAP ERP system contracted in November 2023 for completion by May 2024 was only 70% done at the time of the audit. A KSh 3.08 billion warehouse contract awarded in 2018 and due for completion in September 2021 remained unfinished, with a subcontractor having abandoned mechanical works for more than seven years.
KEMSA's strategic plan expired in December 2024 and no replacement was in place, in breach of a government circular requiring new plans by 30 June 2024. No governance audit was conducted during the year and the credit policy had not been reviewed in ten years.
