Board questioned for hand-picking Fabupharm in N$458m tender

Fanie Badenhorst

THE Central Procurement Board of Namibia (CPBN) has come under scrutiny for its attempt to award a two-year N$458 million medical tender to Fabupharm, a company linked to Bank of Namibia (BoN) governor Johannes !Gawaxab.

!Gawaxab denies that he ever owned shares in the company.

According to sources, the haste to acquire medicine from Fabu­pharm is due to the Ministry of Health and Social Services’ lack of preparation, leading them to resort to emergency tenders.

The board announced over the weekend that it intends to purchase medicine directly from Namibian manufacturer Fabupharm.
However, competing companies in the industry claimed that a significant portion of the medicine may still be imported from overseas.

This, sources familiar with this matter said, defeats the purpose of preferring one local manufacturer without competition for the tender.
They said the tender board should have conducted a price comparison by obtaining a minimum of three quotes.
Fabupharm stated that it produces medicine based on clients’ demand.

The tender board said Fabupharm was recommended by the Namibia Medicine Regulatory Council (NMRC) since it’s the only manufacturer of pharmaceutical products in Namibia, while Africure Pharmaceuticals Namibian was recommended as packager.
An Africure representative rejected this classification.

Fabupharm was directly approached to supply 38 medical products (valued at N$458 million) out of 473 products, including paracetamol, antibiotics, and multivitamins.

Not everyone is happy about this approach.
Some medical tender players questioned the board’s decision to only approach Fabupharm, saying it reeks of favouritism.
They blamed the inefficiency of the system on the health ministry’s lack of a live tracking system of its stock at the Central Medical Stores.

“The Ministry of Health and Social Services is supposed to know six months in advance when a specific item would run out of stock and place competitive orders with good delivery time.

“Their strategy is to allow some to import products, and then an emergency buyout is created. The person with stock says delivery is immediate and the price the entity charges to the ministry are exorbitant, but the justification is ex-stock in the warehouse,” says a source familiar with the medical tenders.
“This happens quite a lot. The ministry must have software in place to track items in their warehouses or even a proper analogue system implemented efficiently can carry out the task,” the source says.

Fabupharm managing director Fanie Badenhorst yesterday said the company is manufacturing six products that are registered with the NMRC.
“From the six, there are two that are being contracted to manufacture for us until technical transfer can be done to our new manufacturing plant. There are two more in the process of registration,” he said.

Badenhorst said the company manufactures 12 additional types of unregistered pills.
Some of the products, he said, can be delivered on an order basis.

“Fabupharm currently delivers products on a buyout basis and has been awarded previous tenders for the past 20 years or more. I am sure the public is familiar with Fabupharm products at hospitals,” he said.
Badenhorst said his company, which employs 72 workers, is in the process of upgrading its pill-manufacturing unit, as well as its factory.

“We also started with the planning of an upgrade on the current liquid manufacturing unit of the registered medicine and the planning of a complete new section for the manufacturing of registered liquid medicines.

“This will give Fabupharm more capacity for liquid manufacturing as well,” he said.
There are complaints that some manufacturing companies were excluded by the board’s decision to approach Fabupharm.
The Namibian has seen a licence issued to Africure by the NMRC for manufacturing, which is valid from 20 July 2022 to July 2023.

The company was granted permission to manufacture painkillers, antibiotics and antiretroviral drugs.
“We cannot comment on this, because we have not been approached, although we are a manufacturer,” businessman Shapwa Kanyama, who is central to a medical tender award controversy, said.


!Gawaxab has denied links to Fabupharm.
“I never owned shares in Fabupharm. Eos Capital, which I founded, had shares in portfolio companies such as Fabupharm, Elso, and Welwitschia Hospital at Walvis Bay,” !Gawaxab told The Namibian yesterday.

He said the real owners of these shares were 16 public and private Namibian pension funds and their members.
He said EOS was an investment manager.

“Same principle as a pension fund owning shares in listed stock managed by asset managers. There is no private or individual ownership by EOS or any unlisted manager.

“I sold my shares in EOS when I got appointed at Bank of Namibia. EOS never participated in tenders,” he said.

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