Positive markets effect can solve Kenya’s blood deficit

Friday February 22 2019

Rare as they are, whenever Kenya suffers from a large scale disaster, the poverty of Kenya’s blood reserves becomes salient.

I have learned that the gold standard for blood reserves for a country should be calibrated to match one percent of its population at any moment. This implies that in Kenya’s case, the total reserves should lie between 450,000 and 500,000 units of blood in various reservoirs maintained by the Kenya National Blood Transfusion Service.

Declared data shows that not only is the country’s reserves below the requisite one percent, but also that the national target is set at 60 percent of the norm. Notwithstanding this lower threshold, the real reserves are at a half of the target, meaning that Kenya’s blood reserves are one third of the global benchmark established by the World Health Organization.

This situation shows that the Kenya National Blood Transfusion Service (KNBTS) has a supply problem. Demand for blood is real and Kenyans encounter pleas for blood donation from friends and family in the conventional and non-conventional media sources. Kenya is home to a large population of youthful people, most of whom are reasonably healthy.


This inability to find and store sufficient blood and blood products suggests that the market for blood products is not working efficiently. The primary reason for this shortage of blood and blood products is the incentive structure used to drive blood supply from Kenyans.


It is recommended policy for blood supply to be procured through donations and with no material incentives provided to induce supply. Kenya’s blood supply and storage policy is wedded to this norm of pure donations and that is where the problem lies. The argument usually presented for supporting no remuneration for individuals to supply blood is that a material incentive such as money or a gift would increase supplies from the most unsuitable and unhealthy individuals. The reasoning being that people who are motivated by the money alone are not likely to value their health and could supply huge volumes of contaminated blood.

This fear is real but not supported by the evidence from countries that liberalised blood supply and have incentives for donations. In the United States, payment for blood supply is not forbidden by law though there is a requirement for labelling packages of blood procured through payment to the supplier. However, the related market of blood plasma and bone marrow is compensated through cash. Donations are higher than they would be without payment, and this explains, in part, the higher incidence of diseases that are discovered during testing. In essence, material inducement for donation will raise total donations and lead to an increase in unsuitable blood but the proportion of unsuitable blood does not make inducements ineffective or uneconomic.


Coming back to the real problem of Kenya’s supply, it is recorded in the press that the demand for blood is so high and the shortage faced by KNBTS has led to the rise of “informal market” supply channels. This refers to people who are willing and actively provide donations for patients in exchange for cash with reports that the compensation varies from Sh2,000 and higher, depending on the acuteness of the need. This shows that the blood supply and management has a solid market dimension and is a venerable competing service to the uncompensated blood donation side. In ignoring this market and insisting on the uncompensated model, the KNBTS is being disingenuous.

More important is that the KNBTS is doing its job as expected and cajoling and reminding people of the need to assist, but it is deceiving itself in statements such as “blood is free”. It certainly is not, even if the normative posture would like it to stay so. And to its credit the KNBTS highlights the contribution of Santa Kennedy who was awarded the Head of State Commendation for being Kenya’s record holder for 81 discrete blood donations.

The KNBTS staff are deservedly remunerated but need to reset the discourse and consider the expansion of their remit to accept both donors who would expect no compensation for the purpose of serving others while considering a mechanism that experiments with compensation to outcompete the informal market for blood supply.

Repugnant markets is the name economists use in reference to transactions that exists despite the normative posture of society. For Kenya, the noble view of ensuring preparedness and a keeping respectable volume of blood and related products in store commends the experimentation with new incentives for supply. Compensation need not be in cash but could take the form of merchandise or user items in order to shield the KNBTS from having to give out “blood money”.

Many patients would be well served by this revision of policy.

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi.

Twitter: @IEAKwame