Former ministers back luvindao’s N$221-million plan to cut out health tender middlemen

Minister of health and social services Esperance Luvindao’s plan to cut middlemen in medicine procurement, potentially saving N$221 million, has won support from former ministers and economists.

Former ministers Calle Schlettwein and Richard Kamwi say they appprove of the move.

Luvindao has in recent months sidelined middlemen companies in favour of direct procurement from manufacturers.

On Monday, she said the government could potentially save N$221 million by cutting out middlemen and buying essential medicines and clinical supplies directly from international manufacturers. The minister defended her stance in parliament on Tuesday.

Schlettwein says he did the same during his tenure as a minister of finance, which had saved the government millions.

“I do agree with honourable Luvindao’s decision to remove the middlemen. We did the same when l was a minister of finance and it saved us half of the price charged by the middlemen and sometimes more – twice, in some cases thrice.

“We used the United Nations’ system, which has no fee. Of course we also need to avoid penalties during the process, but it will be avoided.

“As the state you can buy directly from the manufacturer and it is highly recommended. It is very important to keep and improve the ability to help people. On the issue of employment it is not much of a big risk, because the middlemen as agents are not employment-intensive businesses, it is rather a business based on buying and ordering, therefore the risk is very small.

“As a state we must consider the risks, and in this case we have to weigh the risk of losing a few jobs with the risk of failing health service because of insufficient resources,” he says.

Former minister of health and social services Kamwi says he is aware of Luvindao’s decision and the challenges of procuring medicines and clinical supplies.

“This has been a concern for quite some time. For me the issue of middlemen is not giving the Namibian people value for money, and when l speak of the Namibian people it is the government.

“It is certainly not giving value . . . they go way too high, which has led Luvindao onto that route,” he says.

Kamwi recalls halting a questionable procurement deal during his tenure involving Cuban medical supplies.

“When we decided to get some vaccines and medical supplies from Cuba, government to government, I can tell you that when I left office, it is on record that I left an ongoing case which we stopped when I came to know about it.

“When we put this into action, someone tried to change things, but fortunately I took action and it was stopped by the president at that time. Unfortunately, those people took the government to court, but I had saved more than N$200 million, which is a lot of money. So I speak from experience, and doing away with the middlemen is simply the best,” he says.

“I doubt this decision will cost the government if it is done in a more transparent manner, and the minister may not have taken such a decision without consultation. If the president and Cabinet cleared and agreed on the decision collectively, then this is what they have agreed, and the government will have to respond when they cross that bridge.”

The ministry has in the past accused business people who benefited from the health tender system of trying to undermine Luvindao.

They have, in turn, accused the minister of disregarding procurement laws by directly contacting manufacturers.

Economist Robin Sherbourne, however, shares the ministers’ sentiments.

“If middlemen are taking huge cuts, the minister’s approach may well be the best one, but I have not looked into this issue,” he says.

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