Recently, the Director-General, National Agency for Food and Drug Administration and Control, NAFDAC, Dr. Paul Orhii, in a press briefing in Abuja told journalists that contrary to the mischievous reports of financial impropriety, the agency is spending its internally generated revenue on operations, Joyce Remi- Babayeju reports.
Lately, there have been malicious accusations in a section of the media accusing the Director-General of NAFDAC, Dr. Paul Orhii, of financial recklessness and mismanagement of internally generated revenue. At a press briefing in Abuja, the NAFDAC boss refuted the allegations.
He said the ex-finance Director, Mr. Ademola Mogbojuri, was transferred because he was incompetent, mischievous and exhibited corrupt tendencies in the payment of staff allowances and contractors.
According to Orhii, the statutory law establishing the agency gives it the right to internally generate revenue and also use such for its expenses and this is what he is doing.
Orhii said part of the revenue generated by the agency is used for operations and to keep it as one of the top 20 regulatory agencies in the world.
The NAFDAC boss added that the allegation of massive fraud, purported award of contracts to some contractors and the issue of not following due process are false.
‘’I met Internally Generated Revenue, IGR, at N2.5 billion only and in the last four years the money went up to N9 billion. There has been progressive increase in our IGR since I assumed office and I think the credit should come to me because I plugged the loopholes and leakages and ensured that we have a steady increase in revenue generation at NAFDAC.
‘’Three years ago, our IGR was above N6 billion. Last year, I think we went up to N8 billion and this year we are hoping to make N9 billion. It is the money that we generate that we use to run the agency. In fact the federal government basically pays our salaries.
‘’And so for a director of finance and account, who has the correct information to say that we have not had a steady N9 billion increase in the last four years is being mischievous.’’
According to the director-general, the budget for overhead expenditure is over N9 billion and we were given N10 million naira. At the end of the year we were paid only N7.2 million.
Giving a scorecard of the agency, Orhii said, ‘’we have generated more money for NAFDAC since I came on board. First and foremost, for those of you who might have visited our Lagos office, you discovered that we were in a porter’s carbine, but today we have an edifice in Isolo.
It is one of the best buildings for an agency. I am proud, I can house anybody, I can invite anybody, and NAFDAC is one of the top 20 agencies. We completed the building, we do not owe any institution.’’
On the issue of awarding contracts, he said ‘‘due process was followed in the allocation of contracts including the furnishing that was alleged to have been inflated; it was supposed to be N180 million but it increased to N370 million. Due process was followed to the point of approval because it was above NAFDAC’s approval limits. Two external evaluators were involved before it was approved by the ministerial tender board and was sent back to us; so that allegation is false, due process was followed, the documentation is there and it is verifiable.’’
You might have been told that I have so many companies which I award contracts to; this is easily verifiable. The person making these allegations also made your job easier by providing the names of the phony companies. He alleged that I have incorporated phony companies that I award contracts to. This one is very easy because you can go to the Corporate Affairs Commission, CAC, and verify the companies.
He said contrary to the allegation, some of the companies have been doing business with NAFDAC even before he assumed office. The same contractors that were working at the agency and who have been doing a good job were retained, go and check that out.
‘’In fact we prefer people like that because they have a track record. So the major contractors at NAFDAC are still the same,’’ he said.
Speaking on his achievements and that of the agency, Orhii said before he assumed office infrastructure was almost at zero percent.
‘’The first thing we did was to upgrade Agulu laboratory to international standard and the former president commissioned it in 2010. It was not built for free. It was from the money that I generated. It was not the budgetary allocation that we got; it was from our meager resources that we revamped it. This laboratory is currently undergoing international accreditation. The US Pharmacopeia has sent people to audit it for accreditation.’’
When I came to NAFDAC, the laboratory in Kaduna was razed by fire in 2004. We rebuilt that laboratory a month ago. It is of world standard and it will be going for international accreditation. You can go to Kaduna right now and verify this information it was built from our IGR.
As we speak, in Port Harcourt, we do not have a befitting office accommodation so we bought a structure in GRA. That building has been completed and will soon be occupied. It was not built for free, but with our IGR.
It was also alleged that we squandered money on publicity; of course I don’t know if paying for publicity is bad, you are the better judges of that one.
How can someone consider publicity a waste? The difference between a regulatory agency like NAFDAC and those of other advanced countries for example in the US is that the masses here are largely uneducated and if you do not engage in public awareness, they would accept cheap medicines at the expense of their lives.
This made the director of finance to refuse on so many occasions to pay for media enlightenment because he considers it a waste.
Also when I joined the agency, members of the House of Representatives visited the Oshodi laboratory and they lambasted NAFDAC because of its poor state. Two years after that we refurbished that laboratory to a point that it got international accreditation by the American Association of Laboratory accreditation. Today, it has been designated by the International Atomic Energy Agency as the gold standard and a centre of excellence in Africa.
It is the same thing with the drug laboratory in Yaba. We refurbished it within two years, it has gotten international accreditation.
Some people want this money to be left in a bank account so that they can generate interest for themselves and maybe negotiate with the bank and get interest. I believe that the money should be used in running NAFDAC activities. And as long as I continue to be at the helms of NAFDAC that is what I intend to do.
When I came to NAFDAC we didn’t have a credible enforcement agency. We bought a land in Apapa and built a very big enforcement office. We are very proud of what we have done in that area. It is verifiable.
One of the lands that they told you is non-existent is in Benue State. That land has 10 hectares and we built a borehole for the community. If you want we can give you the coordinates, you can go there and verify and be the judge for yourself.
Again, we acquired a land in Abuja. The centenary city that is being built, the former FCT minister was gracious enough to give us 20 hectares. 10 hectares to build a NAFDAC head office. So in a few years from now we will not be sitting here, we might build something that would be much better than what we have in Isolo.
‘’Now when you have an overheard cost of N9 billion and the National Assembly gives you N10 million out of which at the end of the year you received only N7 million. When the law allows you to generate and spend but instead you go and put such money into the federation account, it means you have closed down the agency.
‘At the National Assembly I was told that government only pay salaries of our staff but other things we can do from the IGR. Now if you go and pay that money into the federation account and you are given only N7 million, while you’re building alone costs a N100 million because we have several laboratories and offices, how then do you pay for electricity to run the agency?
Section 80 sub-section 1 states that all monies should be paid into the consolidated revenue and budgeted by the National Assembly before it can be spent, but there is an exception; sub-section 3 says that unless the money has been allowed by an act of the National Assembly it cannot be spent.
On the successes recorded by the agency, Orhii said there was training of staff. ‘’We have trained our staff locally and internationally and I am happy that I can send my staff to any conference in any part of the world. In fact when my staffs attend conferences, they dominate activities. We were in China last month and out of seven countries in attendance including Israel and Lebanon, they said NAFDAC should chair meetings. Members of my staff who are not even up to the rank of directors dominate meetings. Their contributions are selected as the best.
This happened at the WHO meeting in Geneva and at the annual conference of drugs manufacturers in Copenhagen, Denmark.’’
Today, NAFDAC has received approval for four pharmaceutical companies in Nigeria and we have submitted the relevant document to the World Health Organisation, WHO, for six more approvals. If we get the approval it means that these companies can export their products. This means that Nigeria will not only become self-sufficient in the production of essential drugs, but will become an exporting country.
We started the UN Commission for Life Saving Cooperatives for women and children three years ago, no drug identified for use was manufactured in Nigeria, but today I can brag that about four of these products are manufactured here.
We have Chlorhexidine 4% gel for umbilical cord care being manufactured here. This drug is important in stemming neonatal deaths because if a baby’s cord is infected he/she could die.
Previously, out of the 50 countries involved in the UN programme, only Nepal was producing this drug.
Today, Nigeria is producing it and can even export to other countries.
Pneumonia is one of the biggest contributors of neonatal deaths. The best medicine for it is dispersible Amoxicillin tablets.
At a WHO meeting Nigeria said it can manufacture this drug but they laughed at me because the technology needed to do it is complex. Today, we have Daily Need Company in Lagos which has manufactured this dispersible Amoxicillin tablets. Also 18 other companies have indicated interest in the manufacturing of this drug.
When properly used, this drug can save 17 percent of children that would have died of pneumonia.
Diarrhea is also a major cause of death among children in the country. The drug for the management of this disease is Zinc Sulfate. Now we have about three companies that manufacture good Zinc Sulfate in Nigeria. We have Chi Pharmaceuticals, Fidson and other companies. You know that a major contributor to maternal death is postpartum hemorrhage. When women bleed to death and to prevent deaths we need Oxytocin. Due to our weather the storage of this drug is a big problem so we decided to use Misoprostol tablets which are already being produced in Nigeria.
If we have adequate supply of Misoprostol and we teach midwives how to use them we would save women during childbirth.
On the issue of categorisation with the US FDA, he explained that the US FDA needs about N400 billion to cater for half of their population or N800 billion to cater for 300 million Americans and Nigeria need less than N5 billion.
‘The US FDA does not fight counterfeit medicines, that is not their business. That is the business of the FBI. Here in Nigeria, the fight against counterfeit medicines and destruction alone is not cheap. Destruction is not cheap. To destroy seized medicines, we have to rent lands, carry a truck load of those medicines there and get the police to guard it for 24 hours. Every year we destroy counterfeit drugs worth billions of naira. For surveillance activities and evacuating these products, they cost millions of naira.
‘‘We spend over N500 million for the prosecution of counterfeiters every year. Before I came to NAFDAC, there was no single conviction, but we have had more than 10 prosecutions including the manufacturers of that mavigay nature.’’
It is by prudent management that we owe only N5 billion or less because ideally if you compare our budget with that of the best medicine regulatory agencies in the world, in the group that we belong, we should be spending close to N400 billion yearly.
The law allows us to generate revenue, just like the US FDA which allows them generate and spend user fees.
Most of our revenue comes from users fees. For example, if you want to register a product with NAFDAC, the fee is only N250, 000 and it is from this money that we will send three inspectors to your company.
Maybe you are located in China or elsewhere, our officials might stay for three days, inspect your facilities and then do a laboratory test on that particular product before we can register it. Otherwise people would raise alarm that we are approving products that have not been tested. We have to go and inspect it before we approve them. So you can see where the expenditure is coming from.
Imagine that you want to register a product, you came from India and you pay us N1million to register that product and then we pay it into the consolidated revenue account and later it is not budgeted or it is not released and you want us to visit your facility but we tell you we don’t have money when you just paid us N1 million. So these are some of the challenges that we have. And that is why I think the framers of the law were wise to make a constitutional exception that NAFDAC should generate and spend its money.
Imagine when ‘my pikin teething mixture’ problem came up and I say we do not have money or I am waiting for money, how would it look like?
I haven’t even told you how we spend money on some of these emergencies. Sometimes we have to buy chemicals. If I tell you that we don’t have money or that we are still waiting for budgetary allocation before we can do the laboratory analysis what would you say? I would rather perform that function.
On NAFDAC’s budget, he said, ’’we have three components of the budget. We have personal budget which is about N4 billion and is fully taken care of by the federal government, the money is remitted from the office of the accountant-general of the federation into individual staff accounts.
Then capital expenditure for projects such as buildings and others, that one we get a meager amount. Like this year, we were given just N50 million. Last year, we were appropriated just N50 million, but we only received about N22 million at the end of the year, you can imagine how many buildings that can take.
Then overhead expenditure, this covers our inspectors visit to other companies. International inspection of companies, this involves estacode, their transport and ticket. It also covers media coverage. For instance, if we want diesel, chemicals that we need to do analysis, trainings, transportation and everything else comes under it and that was why we asked for N9 billion, but we got N10 million last year. This year we got zero allocation.
Personal cost is fully paid by the federal government, while we cover capital and overhead expenditure from what we generate.
From what we generate we pay 25 percent to the federation account and then there is three percent VAT on everything that you do and then the rest goes to the running of the agency.
So if we have N6 billion for example, by the time we pay 25 percent or the three percent to the federation account, we are left with about N4 billion that will cover your N9 billion overhead and maybe whatever you are using for building. The laboratory that I built in Kaduna, the edifice in Isolo is supposed to come from the capital expenditure.
On the money that is supposed to be remitted into the federation account, the NAFDAC boss added that ‘’the person that ought to remit it was the one who said we didn’t pay it. By the way, the person making this allegation was the one who has been paying this money consistently. In fact one of the reasons that I moved him was because of incompetence. He was supposed to monitor and remit the money as they come.’’
This is what I suggested ‘’divide the money when it comes into statutory payment.’’ Then there are staff and contractors’ claims.
They said that I refused to collect a loan, for me, I would rather collect a loan from the bank if I know that I need diesel to run my laboratory because that is where my money is coming from. If I know that the equipment in the laboratory is weak because that is where my money comes from, I will collect a loan so that I can fix that laboratory equipment and pay them off.