Yaoundé - 21 June 2021 -

Cameroon lost close to XAF15 bln to overcharges in Covid-19 test kits purchase, the supreme state audit claim

Cameroon lost close to XAF15 bln to overcharges in Covid-19 test kits purchase, the supreme state audit claim
  • Comments   -   Friday, 21 May 2021 17:20

(Business in Cameroon) - In 2020, Cameroon spent XAF25.806 billion to acquire 1.556 million Covid-19 test kits. According to the abstract of the first audit mission carried out by the Supreme State Audit Office of Cameroon (CDC) on the management of Covid-19 relief funds (XAF180 billion in 2020), the cost was overcharged by at least XAF14.582 billion.

The suspect is Mediline Medical Cameroon, which the Minister of Public Health Manaouda Malachie presented on June 4, 2020, as a “subsidiary of Southern Korean Mediline Medical Korea” and “the result of the partnership between Cameroon and South Korea.”  During the reviewed period, Mediline Medical Cameroon supplied 90% (1.4 million kits) of the overall test kits purchased, while local firms Medical Plus and Sat Pharma supplied the remaining 10%. The two local firms supplied the kits at XAF8,371.9 each (or XAF1.306 billion for their overall supply) but Mediline Medical Cameroon supplied each of its kits at XAF17,500 (or XAF24.5 billion for the whole supply).

According to the CDC, the kits supplied by Mediline Medical Cameroon are the Standard Q Covid-19 Ag Test kits manufactured by SD-Biosensor. Each of the test kits would have cost XAF7,084 if purchased directly from SD-Biosensor, the CDC claims. “The XAF10,415 difference between the price charged by Mediline Medical Cameroon SA and the one charged by the manufacturer SD-Biosensor created a XAF14,581,884,800 opportunity cost for the public treasury. In other words, Cameroon could have saved  XAF14,581,884,800 on the whole supply contract signed with Mediline Medical Cameroon SA in 2020 if the kits were directly purchased from SD-Biosensor,” the CDC claims.

Thousands of test kits unaccounted for

“In Q4-2020, the MINSANTE (Ministry of Public Health) continued to purchase the   Standard Q Covid-19 Ag Test SD-Biosensor kits from Mediline Medical Cameroon SA at XAF17,500 per unit even though at the time, it was clear that it could have acquired them through the  Global Fund to Fight AIDS, Tuberculosis, and Malaria at US$4.97 or XAF2932.3 per unit,” the CDC adds. This explanation makes the MINSANTE’s will to continue business relationships with that company, which was still unknown by the Cameroonian public months ago, a bit suspect.

The audit office further reveals that out of the 1.4 million test kits acquired by Cameroon in 2020, 610,000 "are still unaccounted for. No information was disclosed to the financial jurisdiction about their final destination," the abstract reads. Yet, the abstract claims that an invoice (the invoice number is n° 004: MHK 06-2020 of July 2, 2020, worth XAF6 billion) was issued for the order. Therefore, the suspicions are high that the transaction was fictitious.

Nevertheless, there are reasons to believe that the Cameroonian government is making informed decisions. A note from the Ministry of Economy (dated June 2, 2020) informed that in the framework of its cooperation with South Korea, Cameroon ordered 3 million test kits directly from  “SD-Biosensor/Mediline.” This presupposes that SD-Biosensor and Mediline are somehow linked and that the Cameroonian government was fully aware of the existence of SD-Biosensor. Therefore, it could have surely got information about the unit prices charged by  SD-Biosensor.  

Conflict of Interests?

Mediline Medical Cameroon’s contract was facilitated by several high-ranking officials. First, its intermediary in the deal was one of its shareholders Moda Holding Hong Kong, owned by Cameroonian businessman Mohamadou Dabo who is also a South Korean consul general in Cameroon. Also, on June 11, 2020, Prime Minister Joseph Dion Ngute authorized the MINSANTE to negotiate the acquisition of three million Covid-19 test kits with the company suspected by the CDC.  The price charged was also validated by the Ministry of Trade (led by Luc Magloire Mbarga Atangana) while it should not have done so looking at the huge difference between the market prices and those charged by Mediline Medical Cameroon, CDC says.

It indicates that it is unable to pinpoint the reason the officials authorized such a contract because the selection criteria and the conditions in which the special agreements were passed are unknown, therefore hinting towards a lack of transparency.

Full of suspicion, the audit office reveals that since its creation on September 13, 2017, Mediline Medical Cameroon SA has been in hibernation until its reactivation for the covid-19 supply contract. The audit office also announces that it will write a report on the real ownership and the suspicion of possible conflicts of interests that could have caused the privileges offered to the health equipment supplying company. Nevertheless, more information will be available once the officials involved in the process issue their documentary proofs.  

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