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NDSO guzzles health budget

  • Minister suspects corruption


Health Minister Nkaku Kabi is an unhappy man over multimillions of Maloti that government spends in procurement of medical products at the National Drug Service Organisation.

The Mafeteng-based NDSO guzzles M450 million a year from the ministry’s coffers, placing it second receiving largest chunk of the health sector’s budget after the Queen ’Mamohato Memorial Hospital which takes M550 million.

Kabi has told the MNN Centre for Investigative Journalism that there is an alternative Indian-based source from which the Lesotho government can purchase same service at a lower cost of between M80 and M100 million per year.

This, he said, he had raised as a concern in the cabinet but his fellow ministers had not considered the issue seriously.

“I have tried to raise this issue in the cabinet, but it doesn’t seem to be a pressing issue to either the minister of finance (Dr Moeketsi Majoro) or other ministers, while the health ministry is feeling the pinch of a lot of money being diverted towards a segment despite having an alternative that could save us more money,” Kabi said.

The minister suspects there are high-ranking individuals in government benefitting from the arrangement.

NDSO is a statutory body established in March 2007 as a trading account for the Ministry of Health. It is mandated to procure, store and distribute pharmaceuticals to over 200 health facilities nationwide.

The purpose of the trading account, according to Gazette No.19 of March 2 2007 which established the NDSO, was to promote Basotho health “by developing, implementing and maintaining equitable and reliable systems for the procurement, storage and distribution of medicine and medical consumables of acceptable quality standard for all the health institutions in Lesotho at lowest possible costs”.

The gazette directs the health centres to order their medicines from the trading account “in order to maintain sole source commitment”.
It adds the hospitals “shall obtain authorisation from the trading account before purchasing medicines and medical consumables elsewhere where such products are not obtainable from the trading account”.

NDSO, the gazette shows, shall be used to facilitate the redistribution of medicines within the government health institutions in order to address the problem of overstocking and wastage.

Kabi wants the gazette changed and disallow a monopoly currently enjoyed by the NDSO.

He said while the nation was pointing a finger at the Queen Mamohato Memorial Hospital for gobbling a giant chunk of the ministry’s budget, NDSO was another problem.

Tšepong, as the country’s only referral hospital is known, has been widely criticised for allegedly bankrupting the health sector and under performance since its operationalisation in 2011.

“The ministry spends about M500 million on NDSO to procure drugs for health centres in Lesotho, but there is another source which is willing to take between M80 and M100 million for the same service… NDSO has been given a monopoly, unreasonably,” Kabi charged. 

“We recently went to India and found a cheaper organisation offering us the same quality and quantity of drugs with lesser price but we are unable to use that company because Lesotho laws which established the NDSO are binding,” he said.

Despite the high cost the government paid to the NDSO, the minister observed inefficiency of the organisation.“We still have a huge challenge in the country of hospitals running out of drugs while others operate without the necessary drugs due to the inefficiency of NDSO,” he said.

In its 2018 budget, the ministry has spent M550 million to Tšepong, M450 million to NDSO, M350 million to the Christian Health Association of Lesotho, M200 million on Anti-Retroviral Treatment, M40 million to Baylor, M11 to Raiders for Health, M6.8 million to Red Cross and M6 million to Blue Cross.

Kabi said the ministry remained with only 12 percent of its total budget allocation for administration, “which sometimes is boosted through special projects and international donations”.

The minister believes there are politicians benefitting from the NDSO arrangement but says he is unsure whether it is in the present government or previous. He also refused to be drawn to mentioning names.

“The NDSO budget cause so much trouble to the ministry… I think there are people in high positions who are benefiting from the arrangement. That organisation is very costly to the ministry of health,” Kabi said.

Majoro is yet to respond to questions that the Centre sent on his email last month. But on a telephone, he simply said: “I don’t recall Ntate Kabi complaining about NDSO to me or the cabinet, and to my knowledge, the organisation is still operating successfully…. Unfortunately, I don’t have on my table NDSO as an issue to the ministry of health, but I will look into it”.

The finance minister referred the Centre to the ministry’s Senior Budget Officer Kori Lenyatsa, who confirmed the financial burden the NDSO caused to the government.

“As an economist, I agree with the heftiness of the drugs procurement. Even if the NDSO didn’t exist, I can still stress that the procurement of government drugs is very costly to the ministry’s budget,” Lenyatsa said.
He said the NDSO did not exceed profit margin ranging between seven and 20 percent set out in agreement.

Speaking of drugs shortage at health facilities, Lenyatsa said there were several factors that included government red tape. He said the NDSO is not to blame.

“NDSO is the best information source to respond to the issue of drug shortage, but all I know is that they wait for an order from hospitals before they can deliver”.

He added that other possible cases would be late payments by the government which in turn prevent the NDSO from paying for procured drugs on time.

Lenyatsa noted that the projected drugs revenue for 2018/19 is expected to increase from M420 615 681 million to M495 616 158 million.

The NDSO General Manager Matebele Sefali told the Centre the organisation’s operations were responsive to the health ministry.
Sefali stressed that the NDSO was able to sustain its operations through the seven and 20 percent profit margins from sales of drugs to the government.

*Lerato Matheka is an investigative fellow with MNN Centre for Investigative Journalist

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