Economist David Ndii has clarified that the Kenyan government neither owns nor directly finances the Ksh104.8 billion Social Health Authority (SHA) system, which operates under a user-fee model over a decade-long contract period.
In a statement on Tuesday, March 4, Ndii responded to public concerns regarding the cost and ownership of the SHA platform, emphasizing that the Ksh104 billion figure is not government expenditure but rather fees paid by users over the contract duration.
“The UHC digital platform is fully outsourced. The Government of Kenya has not spent a single shilling on it. The Ksh104 billion represents user fees payable over a 10-year contract period,” Ndii stated via X (formerly Twitter).
Cost Comparison and Justification
Drawing a comparison with other major financial expenditures, Ndii noted that Kenya paid Ksh77 billion in M-Pesa transaction fees to Safaricom in 2024. He defended the cost-effectiveness of the SHA system, stating that it will offer similar services at approximately Ksh10 billion annually, translating to around Ksh50 per hospital visit.
Auditor General’s Report on SHA Ownership
A recent report by Auditor General Nancy Gathungu confirmed that the government does not own or control the SHA system. The report revealed that ownership of the system, its components, and all intellectual property rights remain with a private consortium, with only the infrastructure set to be transferred to the government upon contract completion.
“The ownership of the system, system components, and all intellectual property rights shall remain with the consortium, except for the infrastructure, which is to be transferred to the procurement,” the report stated.
SHA Funding Model and Revenue Projections
The Auditor General further detailed the SHA system’s financial structure, which anticipates generating Ksh111 billion over ten years. This revenue is projected to come from three primary sources:
- Member contributions: 2.5%
- Health facility claims: 5%
- Track and trace solution charges: 1.5%
The report outlined that these funds are transferred into an escrow account on a daily or weekly basis, as per Clause 12.4 of the contract’s general conditions.
“These funds, according to Clause 12.4 of the general conditions of the contract, are to be transferred to an escrow account daily or at a frequency of not less than one week,” the report disclosed.
Conclusion
Ndii’s clarification and the Auditor General’s findings highlight that the SHA system is a privately managed, user-funded initiative rather than a government expenditure. As the conversation around Kenya’s universal healthcare platform continues, transparency in its financial model remains critical to public trust and understanding.
