The National Blood Service Zimbabwe (NBSZ) has inexplicably changed its status from a non-profit making organisation to a private limited organisation, a move that could explain the high cost of blood and blood products, The Herald can reveal.
Investigations by The Herald revealed that the sole blood transfusion institution in the country is now registered under the Companies Act Chapter 24:03 as National Blood Service Zimbabwe (Private) Limited with 17 directors listed on the CR14 form.
It is not clear why the company changed its status, but paperwork in The Herald’s possession shows the change could have taken place in 2013 following the release of damning results from a special investigation into the company by auditing firm, Ernst and Young, in October the previous year.
The report exposed serious abuse of funds by executives, which included loans of over 200 percent of employees’ basic salaries and channelling of funding of blood-for-mothers coupons under the European Union’s 2011 project towards salaries.
The report also noted that the company did not have a policy on how payments of board sitting allowances, travel expenses or medical consultancy fees to doctors should be made.
It further noted that there was no policy for retirement, retrenchment, medical aid, leave and pension. On corporate governance issues, the report noted that there were instances when the NBSZ board and board committees were not informed of significant business transactions either involving the then chief executive Mr David Mvere or by board chairperson, retired Justice Leslie George Smith.
The board then, comprising representatives from Government, who included Parirenyatwa Group of Hospitals chief executive Mr Thomas Zigora, National Aids Council finance manager, Mr Albert Manenji, Association of Health Care Funders of Zimbabwe chief executive Mrs Shylet Sanyanga and a blood donor, Mrs Christine Shaamano, was dissolved under unclear circumstances with speculation rife that they had become “thick-headed” as they sought answers regarding results of the Ernst and Young investigation.
Justice Smith, who has been on the board since 1977 remained and is still NBSZ board chairman, raising eyebrows on his continued interest. He is deputised by former CBZ Holdings board chairman Mr Elliot Mugamu, who was forced to resign from the bank earlier this year for alleged malpractice and unprofessional conduct.
NBSZ has been receiving grants from Government through the National Aids Council as a not-for-profit voluntary organisation.
Asked if it was Government policy to support private companies, secretary for Health and Child Care Dr Gerald Gwinji said Government supports organisations that play a role in providing critical services to the nation. He however said such organisations should be registered as private voluntary organisations (PVOs).
“These can be civil society organisations and other entities registered largely as PVOs. They are therefore not state enterprises but private not-for-profit organisations,” said Dr Gwinji.
However, according to NBSZ’s 2016 annual report, it received about half a million dollars from donations, $400 000 of it from NAC, long after it changed its status to a private company.
Interviews by The Herald at NBSZ regarding these developments raised suspicion that the company changed its status to avoid accountable to any interested authority thereby evading scrutiny on their financials.
“It is understood that the company exports some blood products. No one really knows how much comes from that and how it is accounted for,” said a source who requesred anonymity.
“Coupled with those issues in the report and subsequent developments, we do not know whether the price of blood is justifiable,” said the source.
A letter dated 9 June 2017 addressed to NBSZ from renowned lawyer Mr Rodgers Matsikidze, who himself is a loyal blood donor, indicated there was need for an urgent extraordinary general meeting to deliberate on the company’s legal status, participation at annual general meetings, composition of the board of trustees and the management structure.
In a follow-up interview regarding his letter, Mr Matsikidze said there was no way NBSZ could attract donor funding if it remained a private institution.
“We are worried by the price of blood and blood products which has remained far beyond the reach of ordinary Zimbabweans yet affordable in neighboring countries,” said in the letter.
Mr Matsikidze said many people were dying as they could not afford the cost of blood. It costs $100 per pint at Government institutions and $120 in private institutions but far cheaper in neighbouring countries.
Zambians access blood for free at public health institutions as it is paid for by Government while in Malawi the cost is $42 a pint.
Pregnant women and road traffic accidents are the major consumers of blood in Zimbabwe.
“What this means is, the model they are using does not work and people cannot continue suffering when the blood itself is donated,” said Mr Matsikidze.
“The issue of blood is a national concern and we cannot entrust this responsibility with certain individuals without Government being involved,” he said.
“Sadly, Government has no control in the current set-up,” said Mr Matsikidze.
Efforts to get a comment from retired Justice Smith were fruitless as his mobile phone was unreachable. Health and Child Care Secretary Dr Gwinji said Government was seized with the matter.
He said Government was in the process of determining the motive and true nature of the change of status.
“The issues that have emerged with NBSZ have prompted the Minister (of Health and Child Care) to work on a possible framework to restructure the organisation and redefine its relationship to Government for better accountability purposes and strengthen the legal framework for Government’s oversight role on the entity,” said Dr Gwinji.
He said Dr David Parirenyatwa was expected to share specifics of the proposal with Cabinet.
Community Working Group on Health executive director Mr Itai Rusike said alleged poor governance and accountability issues at NBSZ were worrisome.
He said Government and Parliament should play a pivotal role to make sure recommendations from auditors are implemented.
“To attract donors to fund the institution, the financial books and accounting procedures of NBSZ should be a public matter. Further, the auditors should be changed at stipulated intervals for accountability reasons,” said Mr Rusike.