Home News NAFDAC DG reacts to allegations of corruption: “I’ll rather leave NAFDAC than allow impunity to thrive”

NAFDAC DG reacts to allegations of corruption: “I’ll rather leave NAFDAC than allow impunity to thrive”

by hr

In this exclusive interview with Ndidi Chukwu of Health Reporters, the Director General of the National Agency for Food and Drugs Administration and Control (NAFDAC) Dr Paul Orhii, finally reacts to allegations of fraud making rounds in the media.

Question: What is your reaction to media reports on misappropriation of funds in your Agency?

 Answer: I am going to address this issue and also put it side by side with what we have been able to achieve in these years so that people can have a holistic picture of what is happening at NAFDAC. The article talking about massive fraud at NAFDAC, they went as far as mentioning the name of some contractors and company names and talking about an allegation by my former Director of Finance and Accounts that due process was not followed in the award of contracts.  First and foremost I want to tell you that all the allegations are false. First when I came to NAFDAC I met an Internal Revenue Generation of 2.5 billion naira only a year and it was further said that for the past four years, the money went to 9 billion naira a year. It is true that I met 2.5 billion naira; there has been progressive increase in the IGR of NAFDAC since I became the Director General of the agency. When I came I blocked the loop holes and leakages to make sure that NAFDAC was generating more money. There has been steady increase in Revenue Generation at NAFDAC. Three years ago it was close to N6.5 billion, last year we were close to N8billion naira, and this year we are hoping that it will reach N9 billion. The Director of Finance and Accounts is expected to have the correct information. For him to say that we have had N9billion naira for the last for years is either that he is being mischievous or a show of incompetence. It is the money that we generate that we use to run the agency, in fact the federal Government basically pays workers salaries, like this year, you can verify it, overhead expenditure, we budgeted over 9 billion naira, for running our agency, it is zero allocation fund. Last year it was 10 million naira for the 9 billion naira we budgeted for overhead expenditure of the agency, we were given 10 million naira, and at the end of the year we were paid only N7.2 million out of 9 billion naira. We have generated more money in NAFDAC since I came.

Question: It was alleged that a contract was inflated from N180 million to N370 million?

Answer: The NAFDAC DG said “due process was followed to the point that contract went to the Ministerial Standard Board because it was above for NAFDAC to approve”.  He explained that two external evaluators came to evaluate and approve the budget before it was approved by the Ministerial Standard Board and sent back to NAFDAC.

Question: Sir is it true that you awarded contracts to companies incorporated in your name?

Answer: The person making the allegation should made your job easier by providing the names of the companies that I have incorporated in my name that I awarded contracts, please go to Cooperate Affairs Commission to confirm this one. It is easy at CAC to investigate a person’s interest in a company. There should be evidence from the person’s name, signature or passport photograph registered, even that of your relatives. Some of these companies have been doing business with NAFDAC long before I came into NAFDAC. For the avoidance of doubts it is the same contractors who are doing a good job that have continued to work for us. In fact it is safe for us at NAFDAC to do business with such people because we have their track record. The allegation that I brought foreign companies to come and do business and I award contracts is false and all our contracts follow due process, the implementation is there and verifiable. When I came to NAFDAC infrastructure was zero, the first thing I did was to upgrade our Laboratories to International standard, first the Agulu Laboratory was commissioned by the president himself in 2010 was done with the money we generated from here not from budgetary allocation and for the President to have commissioned it himself; you know it had the standard. The same laboratory is undergoing international accreditation as we speak. When I came, the Laboratory in Kaduna had been burnt in 2004, it was totally burnt, we rebuilt that Laboratory one month ago and we have moved in, it is of World Standard and ready for International accreditation. You can go to Kaduna and confirm, I could not have built that within the two days that this allegation came out. It was also done with our IGR. In Port Harcourt, we didn’t have a good office accommodation there we bought a good accommodation area in GRA built it to a very high standard it is completed and we are about to move into it was also built with our IGR. The Oshodi laboratory was bad, two years after I came in we refurbished that laboratory it got accreditation by the American Association of Laboratory Accreditation that is a very high standard. That Laboratory today has been designated by the International Atomic Energy Agency as the goal standard and the centre of excellence for the African Continent this was done with our IGR. The same goes to our Yaba Laboratory.

 Question: Still on IGR, I could recall the last assembly said the Agency ought to be paying its IGR to the Federation’s account, how have you been able to reconcile that because from what you said; you are still spending the money?

 Answer: The law that enacted NAFDAC says that the agency can generate and spend the money for the running of the agency’s business, when you have an over head cost of 9 billion, and the National Assembly gives you 10 million of which at the end of the year you will still spend more. Now when the law allows you to generate and spend and you go and put the money into the federations account it means you have closed down the agency. I went to National Assembly and I repeatedly raised the issue because the government only pays workers’ salary. If we return our IGR to federations account and our diesel cost alone run over 100 million naira, because we have several Laboratories all over the country and we have offices, we have electricity bills to pay, how do you run the agency when you have to buy diesel for the laboratories to remain functional. I explained all these to the National Assembly I told them that the law, Section 80 Sub Section one states that all money generated should be paid into the consolidated revenue and budgeted by the national assembly before the money can be spent, but there is an exception in sub-section three, which says that unless the issue of that money had been allowed by an act of the National Assembly and then you create a constitutional Laguna because NAFDAC act is an act of the National Assembly and we are not just operating in isolation. Some of them argued that the act was a decree in 1993, but the 1999 constitution came after that decree, if it considered this act illegal, it would have removed it. There was also a law reform in 2004 that qualified whatever was done by that decree. So we are legally generating and spending our IGR, because NAFDAC is an act of the national Assembly. Look at the US Food and Drug Administration after which we are awarded, look at their budget, google their budget, the US FDA make their money from user fees and budgetary allocations. In 2012 the US FDA got a user fee of US$2 billion, they also got budget allocation of US$ 2.36 billion if you change that into naira, that is almost 1 trillion naira. To cater for the protection of 300 million Americans Nigeria is about 174 million people and slightly above half of Americans everything that happens people compare us with the US, if we should judge by what US does, NAFDAC should be getting about 400 billion naira in a year. The US FDA does not fight counterfeit medicines but here the fight is for NAFDAC and we do the destruction too which is also very expensive to accomplish. We spend more than 500 million naira yearly on prosecution of drug counterfeiters. Since I came to NAFDAC we have won more than 10 convictions of counterfeiters.

Question: So you spend your IGR on the capital and overhead expenditures?

 Answer: No, we return 25 percent of it to the Federations Account and we pay 3 percent VAT, in all 30 percent goes to Federation Account and we manage the Agency with the rest of it.

Question: Sir what is NAFDAC’s Budget like?

 Answer: We have about three components of the budget our personnel budget runs to about 4 billion naira, that is fully taken care of that is why I did not mention it, the federal Government pays fully and the money is remitted directly from the office of the Accountant General to the individual account of the staff. The other two components are Capital expenditure for Capital projects, this year we appropriated 50 million naira, and last year we appropriated 50 million and we got 42 million at the end of the year, tell me how many buildings that can take. The overhead expenditure is where most of our activities go, it covers our workers trips for international inspections, their estacodes their transports and tickets are paid through that. Media coverage of events and TV programmes, diesel, chemical for laboratory analysis, trainings. We got zero allocation to run our overhead expenditure this year and last year was 8 million how far can we go?

 Question: What has it been spent for?

Answer: When I came we did have an enforcement office, we bought land at Apapa to build an office which is now very functional you can confirm to see if there is an Enforcement office in Place in Apapa. One of the lands they said we acquired in Benue that they said is not existence; it is 6 hectare and very much in existent that is also subject to your verifications. It is fenced and easy for you to verify, we have also connected electricity to the land has a borehole and one made for the community. FCT administration also gave us 20 hectares of land, 10 have been designated for us to build NAFDAC Head office, and in a few years from now we will not be here. If money comes i am not going to keep it in the account to generate any interest, i will use it to build that head office. If we are having visitor from other countries, we should be proud to take them to that office. We have a crèche for NAFDAC staffs who are nursing mothers, it is close to our office so that they can find time to go and breastfeed their babies and that is in accordance with NAFDAC’s consistence policy on breastfeeding.

You must have seen our Lagos office, the office is in boarder cabins, sometimes rain will fall inside it, you will find rats and snakes in the office. I invite everyone that care to visit NAFDAC today in Lagos and see our Isolo edifice. I think that is one of the best buildings for an Agency, I’m proud of it because I can house anybody or invite anybody from outside Nigeria. NAFDAC is one of the top 20 medical regulatory Agencies. We completed that building without owing anyone on it, the building in Lagos is built without debts. It is a landmark in Lagos right now. All due processes were followed in giving the contract.

 Question: Sir, there is a report that the money that is supposed to be remitted into the federations Account is not remitted sir is this true?

 Answer: Well the person who is supposed to remit it is the one saying it, he didn’t pay. The person raising this allegation is the person who has been paying it all these years. I moved him to another office because of incompetence on his part, he is supposed to be monitoring I advised him to divide the money as it comes into statutory payments, pull the staff claims, pull the money for contractors, there are consultants, there are interns, there are corps members and the police. It is expected that he divides them by percentages and know what goes to any category. Sometimes staffs that travelled outside the country for official duties are not paid on time they use their own money, which was one of the reasons we had an internal strike here, some of them are owed for one year. When he keeps saying there is no money and the Agency is in debt it doesn’t make sense to the workers.

 Question: Has NAFDAC been able to use its funds to enforce its duties aside from renovation of structures?

 Answer: We are not generating these monies to store in the bank and we say we have money in the bank yet we are unable to do our duties. If we had left it in the bank some of these people alleging this can go behind us to negotiate interest with the bank. We generated these monies so that we can run NAFDAC activities and that is what we are doing. I will continue to use what we generate to run the NAFDAC activities as long as I remain in office. An agency is supposed to be active in carrying out its duties, if you are able to source funds to do that and you go back and keep the money in the bank then you join the Band Wagon who wait for the Federal government to give money before they carry out their duties, NAFDAC ideology is not like that.

Question: One of the issues raised by the allegation is that the agency owes a bank loan of 5 billion naira, is this true?

 Answer: For me I will rather collect a loan from the bank if I know I will need diesel to run my Laboratory because that is where my money is coming from. If I know that the equipment is breaking down I will collect a loan to fix it because that is where my money will come from. If you refuse to collect a loan when equipment is broken down then you can’t work. I didn’t want to say this but I have to, how can a chief accountant sit back and three staffs are crying to you that three of them travelled, one was paid last year two are left and no one is talking to us after one year and he refused. From our findings we realised that the one that was paid had to bribe to be paid. If you are the chief executive will you just sit down and watch? How can I sit and contractors are not paid for several years, and they are alleging that this man had a building material shop, if you buy the supply from his shop you are paid on time, if you don’t buy from him your money will be delayed and you will not be paid, will you allow it to happen? If you realise that your travel agents have not be paid for a year and for us it is very important that our travel agents are paid at the right time. Some of them double the cost of tickets because it takes them one year before they collect their money. We also found out that this person has a particular agent that he pays often and the rest are not paid. If you find out that a director erroneously pays money into some unknown accounts, and these are millions of naira. Who gets paid has become a top secret, I told this same person to compile list of all the people that are owed money so that we can start paying chronologically that list never got to my table. I called and asked him what he is hiding then he is attacking the Agency. This person has been happy with his administration until he was reassigned; this is a case of a person making himself a god in the Agency. I will rather leave this agency than to allow impunity to stand.

Question: They say you squander money on publicity sir what can you say about this?

 Answer: Of course I don’t know if paying for TV programmes to educate the public is also wrong. They say talking is cheap but I don’t think that is true with the experience I have had, for you to put up a credible report you have to pay something. We have programmes in four TV channels and we are on air every week that is “NAFDAC and your Health” programme. Go and ask the cost of putting a mini production on NTA, AIT, Channels, and Ben TV Europe every week in one year and let me know. It cost money and we are not doing it with Federal Allocation, we do it with our IGR. If this is considered as waste, then I cannot understand because the difference between a regulatory agency like NAFDAC and other advanced countries, for example in the US people are knowledgeable, but in our country, people will prefer to buy counterfeited drugs at cheaper rate, believing it is affordable and they endanger their life, but it is with public education that we can tell the public that it is dangerous and it can kill you, this is more expensive. Anyone who says public awareness campaigns, educating the masses and spending money on that is a waste, I will spend more money to ensure that Nigerians are well informed this is where we should even do more.

 Question: Lastly sir our readers will want to know who pays for your workers’ training.

 Answer: We have done an unprecedented training for our staffs both International and locally, I am very happy today and proud to send our staff to any conference and when they go there they dominate. In fact, in a conference last month in China where we had many countries in attendance, when it came to who will chair the meeting all the participants said NAFDAC should chair the meeting not because of me, but because of what a junior staff in NAFDAC did when they nominated a meeting, they realised that any topic they raised this person was well informed about it and when they made contribution they brought in the best ideas. That is what it has been everywhere we attend international conference, even in Geneva it is the same. We make drug manufacturers to attend conference for drug manufacturers in Nigeria today we have achieved WHO approval for four pharmaceutical Companies in Nigeria and we have submitted for six more. If we can help them to get WHO accreditation, for pre-qualification of our indigenous products then they can export their products to other countries. Nigeria will not only be self sufficient in the supply of medicine they will now be exporters. We started the UN life saving commodities for children and pregnant women in this country three years ago, when we started, there was no single drug out of the 13 commodities that were required that was manufactured in Nigeria, today i can say we have about four of these products we have chlohexydene four percent gel for management of cord infections in newborn babies manufactured in Nigeria. The lack of this gel has been of the causes of neonatal deaths in Nigeria.  In those days only Nepal was manufacturing it, now we are doing it and can export to other countries. Pneumonia kill children, the best medicine for treatment of pneumonia is amoxicillin tablets, before now when I said we can manufacture it, when I told the World health Assembly in Geneva that it is possible in Nigeria, people laughed at me because the technology is very complex today we are manufacturing it in Lagos and about 18 other companies are starting it too. If appropriately used, 17 percent of deaths that occur in children will not happen, because child pneumonia accounts for 17 percent of under-five deaths in Nigeria. Diarrhoea is also another child killer disease we have zinc sulphate for management of diarrhoea. About four companies in Nigeria are manufacturing quality zinc sulphate. Post partum Haemorrhage kills women when they deliver babies, they bleed to death, to prevent that we provide misoprostol and we are starting local production very soon. If we have enough and we teach midwives how to use it we will be saving millions of lives.


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