NAIROBI, Kenya – The Kenyan government’s Sh104.8 billion Social Health Authority (SHA) digital system is at the center of a growing controversy after Auditor General Nancy Gathungu revealed that, despite the enormous public investment, the state neither owns nor controls the system.
In her report, Gathungu flagged a critical oversight in the government’s decision to proceed with the project without securing ownership of the system’s infrastructure and intellectual property.
“The ownership of the system, system components, and all intellectual property rights shall remain in the ownership of the consortium,” Gathungu noted, warning that this severely limits government authority and oversight over the platform.
To add to the controversy, the procurement process did not include competitive bidding, instead sourcing the contractor directly through a Specially Permitted Procurement Procedure, which is a clear violation of Article 227(1) of the Kenya Constitution 2010.
“This process was contrary to Article 227(1) of the Constitution, which requires a fair, equitable, tranFsparent, competitive and cost-effective way of acquiring goods and services,” Gathungu stated.
According to the report, the project was also excluded from the procurement plan and the medium-term budgetary expenditure framework, which violated Section 53(7) of the Public Procurement and Asset Disposal Act of 2015.
This revelation has sparked widespread concern about whether taxpayers are truly getting value for their money.
The lack of government control over such a crucial system has raised red flags about long-term sustainability, data security, and potential cost escalations.
-Breaking Down the Costs-
The government has defended the Sh104 billion cost, arguing that it is a user fee-based model rather than an outright development cost.
Presidential Advisor David Ndii has sought to clarify that the platform is fully outsourced, meaning the state has not directly spent billions on developing the system.
Instead, the figure refers to payments over a 10-year contract period.
Ndii compares the cost to the Sh77 billion Kenyans paid in M-Pesa fees to Safaricom in one year, an amount that rarely attracts public scrutiny.
According to him, SHA’s digital system will cost approximately Sh10 billion annually, which translates to about Sh50 per hospital visit.
Given that each visit includes multiple transactions—such as patient authentication, provider verification, data retrieval, prescription processing, and service validation—Ndii argues that the actual cost per transaction is around Sh10.
SHA software is only one of the components. SHA SaaS will cost Sh2.3b ie Sh230m per year. NHIF was spending Sh450m/year. The software services also includes HMIS for 7000+ public health facilities + data transmission services (from Safaricom😊) and infrastructure.
-The Ownership Dilemma-
Despite this financial breakdown, critics argue that the biggest issue isn’t just the cost, but rather the government’s lack of control over a system that is essential to achieving universal healthcare access.
Critics argue that by allowing a private consortium to retain full ownership of the system’s infrastructure and intellectual property, the government has effectively surrendered its authority over a service meant to be a cornerstone of Kenya’s UHC agenda.
This raises several pressing concerns:
- Data Sovereignty: Who controls and protects Kenyans’ medical data stored within the system?
- Cost Adjustments: Can the government prevent future cost escalations, or will it be forced to renegotiate at the consortium’s discretion?
- System Continuity: What happens if the private operator decides to terminate the service or fails to maintain it efficiently?
The UHC digital platform is fully outsourced. GoK has not spent one Ksh on it. Sh104b is user fees payable over 10yr contract period. For comparison we paid Safaricom Sh77b mpesa fees last year. The platform will provide similar capability at Sh10b/year ~Sh50 per hospital visit.
-President Ruto’s Rebuttal-
President William Ruto has strongly defended SHA, insisting that the new system is designed to eliminate the fraud and inefficiencies that plagued the defunct National Hospital Insurance Fund (NHIF).
Speaking at the funeral of Malava MP Malulu Injendi in Kakamega County, Ruto dismissed claims that the government was wasting money on an unnecessary digital system.
Taifacare is addressing the fraud that plagued the former NHIF system, where nearly 40% of claims lodged for payment were fraudulent.Under SHA, an empanelled and contracted health facility is paid only for actual, documented, and verified patient visits within the prescribed…
He argued that nearly 40 percent of NHIF claims were fraudulent, with hospitals receiving payments for ghost patients and non-existent procedures.
“They don’t want a system that works because they want to keep stealing from us. That era is over. We are not going back to NHIF, where hospitals got free money without accountability,” he declared.
According to Ruto, SHA operates on a fee-for-service model, ensuring that payments are only made for verified patient visits.
He dismissed media reports suggesting that the government would fund the system outright, labeling them as misleading.
While the government maintains that SHA will bring efficiency, curb fraud, and improve healthcare service delivery, critics argue that the failure to secure ownership could leave Kenya vulnerable to future dependency on private operators.
