How SHA heist exposes the systemic failure of Kenyan state

The shocking financial happenings around Taifa Care are only the latest pointers to the urgent need for Kenya to be rescued from tumbling into the ranks of failed states. State failure is a process. It does not happen in a day. Kenya is on this sorry journey.  

Known as Social Health Insurance Fund (SHIF), and managed through the Social Health Authority (SHA), President William Ruto’s health flagship programme is flopping. Either, the regime has lost grip of the SHIF purse, or the state is itself on a looting spree. In the short time it has been here, SHIF has lost billions of shillings through fraudulent payments, and a faulty digital platform. Both Health Cabinet Secretary Aden Duale and President Ruto, do not know whether to admit the miasma, or to deny. The CS has shut down hospitals, suspended others and blacklisted even more. It is all about theft. Regardless of who the thieves are, the state cannot escape. It has a poor grip on the scheme to thieves, or it is the thief.  

Either way, SHIF is a lesson in state failure. For what is state failure, in social science? Former Minister in Kibaki’s Cabinet, Raphael Tuju, has recently spoken to some boxes that Kenya has so far ticked in state failure. State failure is simply state loss of control on critical entities and roles. The most obvious is loss of monopoly of violence. This may sound pejorative. But there is a lot more to it.  

State monopoly of violence is very important. Its loss is the most obvious indicator of failure. To secure public order and security, the state must monopolise violence. This is not to say it should be violent! The fact that it monopolises violence, however, discourages other potentially violent groups.

Goons, gangsters, warlords, and sundry militias, are either crushed, or altogether refrain from formation. Yet Kenya has ticked this box of failure. Armed goons gambol in the streets during public demos, often in joint operations with the police. Rule of law, public order, safety and security are all at risk. Also at risk is state sovereignty. Next is the legitimacy of the government. When dreadful non-state entities claim to protect citizens and businesses at any time, the state has failed. Next, its legitimacy is in doubt. So, too, is the case when, when the government admits that mind-boggling billions of shillings have been looted from the kitty, as the state slept.  

The buck eventually stops with State House. State House has hemmed and hawed over the matter, even as the CS has bitten his tongue with heedless invective. If the appointing authority is unmoved, then both the authority and the CS know something the rest of the country should know. Whatever the case, they have failed. 

The Health Ministry is telling the world that, under its watch, there has been widespread false billing. Billions of shillings have flown from the kitty. There has been upcoding. Payments have been made for procedures not done, and for medicines not given. Then there is the little matter of who owns the SHA digital platform. The ownership of this thing is ambiguous. That is according to the Auditor General’s report of March 2025. And yet the government has poured billions into the platform.  The same is true of the 22222 e-Citizen platform that all government payments are supposed to go through. How now? Has the country become a looter’s paradise? How could President Ruto even find the mouth to link Parliament with corruption, when grand larceny goes on unabated in his Ministries, and in semi-autonomous government agencies?  

Every day, the nation wakes up to new revelations of more billions, either stolen, or lost through state negligence. It boils down to weak institutions. That the culprits go scot-free further manifests weakness of institutions and systems. Alternatively, they are deliberately meant to be weak. In this case, they speak to public trust in the custody of pirates and buccaneers.  

Other indicators of failed states include inability to provide basic services, such as education and infrastructure. There is also authoritarianism, one-man rule, and state capture by gangsters, disguised as leaders. These smartly dressed rascals fly in choppers and drive sleek machines. They live in palatial homes.

They may even force their way into government. They may become part of the Cabinet, for example. At first sight, they may not look like gangsters, these hostage takers. Such is the sorry place where Kenya is. Citizens must wake up ahead of 2027, or sink. 

Dr Muluka is a strategic communications adviser