US$22m health deal scam exposed

US$22m health deal scam exposed

By George Zulu

A FINANCIAL scam has been unearthed at the Ministry of Health in which the government has single-sourced India’s Akums Drugs and Pharmaceuticals Limited to construct a medicines manufacturing plant at a cost of US$22.2 million, a deal that sources say amounts to fraud and will effectively see Zambia funding the entire project while the foreign company contributes nothing.

The plant, announced last year, is intended to manufacture more than 750 different medicines and is structured as a joint venture (JV) in which the government would contribute US$11 million as working capital while Akums Drugs and Pharmaceuticals Limited would finance the remaining US$11.2 million.

But sources close to the deal told The Mast that the Indian company had no intention of releasing its own funds, meaning Zambia would ultimately bear the full cost of the US$22.2 million project under the guise of a partnership.

Compounding the concern, Akums Drugs and Pharmaceuticals Limited has been awarded a separate contract to supply medicines to Zambia worth US$25 million annually before construction of the manufacturing plant has even begun, raising more questions about the procurement process and the government’s due diligence.

Sources described the arrangement as suspicious and called for an independent investigation into how Akums Drugs and Pharmaceuticals Limited came to secure both contracts without open competitive tendering.

“Remember, this is the company government has awarded a contract worth US$25 million to supply medicines annually to Zambia. And before the construction works start, the government has already committed US$ 25 million towards the supply of medicines to Akums,” the source said.

Sources questioned why the government would enter into a JV in which it retained 49 percent shareholding when it was capable of financing the entire project itself.

“This is troubling. In short, what this government has done is to single-source Akums to supply us with drugs worth US$22.2 million, and after paying for the same drugs, we also pay Akums another US$11 million for the construction of the laboratory. I hear some local pharmaceutical companies have written a letter to the President with much more details protesting the deal,” the source said.

And in a letter dated February 16, 2026 and addressed to President Hichilema seen by The Mast, the Association of Citizen-Owned Pharmaceutical Companies (ACPC) expressed concern over the JV between Zambia Medicines and Medical Supplies Agency (ZAMMSA) and Akums Drugs and Pharmaceuticals Limited.

“We write to raise concerns and advise on the joint venture between the government, through the Zambia Medicines and Medical Supplies Agency (ZAMMSA) and Akums Drugs and Pharmaceuticals Limited (Akums), under which Akums will hold 51% shares.

We understand that the government intends to invest approximately US$ 11 million as direct capital contribution and has additionally committed US$ 25 million annually in supply contracts to Akums prior to commencement of the project, with directives already issued to ZAMMSA as of December 2025,” the letter reads in part.

The ACPC argued that it was not technically feasible to construct a single plant capable of producing 750 different medicines, saying such a proposal ran contrary to established international pharmaceutical manufacturing standards.

“We respectfully submit that the current structure of this joint venture raises significant issues. Mr President, a single plant producing 750 different types of medicines is technically and commercially impossible,” ACPC said.

The association also raised doubts about Akums’ technical capacity, noting that the company’s own proposal deviated from World Health Organisation (WHO) standards.

“Here are our difficulties understanding the equity and investment rationale for this deal. If Akums was coming to the table genuinely and we are talking foreign investment, Akums would have brought their resources in the project without premising their interest on contracts before the plant is built,” the association said.

The ACPC said the financial structure of the deal was illogical on its face, as it effectively meant the government would finance the entire project despite holding a minority stake, leaving Zambian taxpayers exposed while the foreign partner assumed neither financial risk nor majority ownership.

“Akums is to receive US$25 million in medicine supply single-sourced contract every year from the signing of the Memorandum of Understanding with government through ZAMMSA. This is before any investment from Akums is made,” ACPC said.

The association argued that the project would not materialise for at least three years, making the government’s characterisation of it as an imminent development misleading to the public.

“It is our assessment that it will be at least two or three years before we see any activity on this plant in terms of actual construction works. That means, by the time Akums will be having any financial commitments on this project, they will have taken a minimum of US$ 75 million in contracts.

The plant is estimated to cost US$ 22 million, 51% share ownership by Akums. This means that capital contribution by Akums is only US$ 11.22 million. With US$75 million taken in contracts at a minimum of 35% net profit (these contracts are non-competitive, they are single sourced, so Akums decides what price to give ZAMMSA), Akums would have made a minimum net profit of US$26.25 million before any financial commitments,” the association said.

It said Akums had made clear it would not use its own finances for the construction, meaning the plant would be built entirely with money sourced from the Zambian people.

“Mr President, this deal means only one thing, Zambians will finance the entire project and will continue to bleed resources while Akums takes 51% for simply acting as a consultant on the project. We find it hard to understand why the government would get into such a deal,” ACPC said.