Making NAFDAC a commercial success

The irony of the situation was that public and private sector revenue was lost in the action that was supposedly embarked upon to challenge corruption in the downstream petroleum sector, stop leakages and free money-a humongous sum at that, on which a cabal in the sector was said to be feeding fat in the name […]

The irony of the situation was that public and private sector revenue was lost in the action that was supposedly embarked upon to challenge corruption in the downstream petroleum sector, stop leakages and free money-a humongous sum at that, on which a cabal in the sector was said to be feeding fat in the name of fuel subsidy-for the building of massive infrastructure nationwide. The Federal Government had validated its action on the fact that the subsidy bill was too huge for it to continue to fund and that it was a euphemism for corruption, which must be confronted head-on.  The question which was thrown up in the public domain to prick the conscience of Nigerians was the propriety or otherwise of the continued funding of corruption.

Apparently, no right-thinking person would want the regime of corruption to continue.  If it was true that the Federal Government subsidized a cabal that held the downstream petroleum sector by the jugular to the tune of N1.3 trillion in 2011 alone (including payment of some arrears on kerosene subsidy for 2010 and 2011 as was later clarified by the Petroleum Minister, Dieziani Alison-Maduekwe before the House Ad-Hoc Committee on Subsidy), then it makes sense to withdraw the subsidy and spend it on building infrastructure that will impact positively directly on the people. If the idea is to judiciously redirect the subsidy money in the years to come on building roads, refineries, health and power facilities, among other people-oriented projects, then the withdrawal of the subsidy should be seen by Nigerians as a demonstration of political will by a sincere leadership to actualize a development programme that will reinforce its transformation agenda.

In fact, the idea of freeing the subsidy fund is Federal Government’s Unique Selling Point (USP) in subsidy removal.  I expect that government at all levels should now shift attention to the non-oil sector of the economy, especially where they have comparative advantages, to maximize exploration, production, consumption (if necessary) and export.  I also expect Ministries, Agencies and Departments of government to explore ways of generating revenue to bolster government’s revenue profile.

I believe government has not reached its elastic limits in revenue generation drives.  There are still ways by which government can effortlessly raise revenue in multi-billions of naira without first investing huge sums into the process.  In the thick of the anti-subsidy removal strike that paralysed the nation, my mind was adverted to the National Food and Drug Administration and Control (NAFDAC) which has been saddled with the responsibility of regulating the food and drug manufacturing subsector of the economy and the huge revenue it can generate from its regulatory activities only if it could be creative.

This time calls for creative ideas about how to generate revenue.  I believe that the leadership of NAFDAC under the charge of Dr. Paul Orhii has the capacity to creatively generate revenue that will not only free it from annual budgetary allocations by the Federal Government but also make it possible for the agency to assist government in funding allied departments and agencies that cannot, by their composition and mandate, generate revenue.

I do not see anything wrong in the NAFDAC collaborating with the National Assembly to push through a legislation that will entitle the agency to collect five percent as regulatory allowance on every luxury good or product (whether domiciled or imported) that is consumed in the country.  Billions of naira can be generated by the agency as regulatory allowance annually.  This is done in many developed countries.   The Legislation will fine-tune all necessary details, especially concerning the mode of collecting the regulatory allowance and the range of products the allowance would cover.

My investigations showed that Nigeria, with a population of 167 million people, has 1, 498 employees in NAFDAC.  To deliver on its mandate of effective regulation and monitoring, NAFDAC has to be adequately manned.  The personnel figure has to increase.  But that is not possible in the absence of adequate funding.  Whereas NAFDAC should not have problem funding its activities especially building and equipping of laboratories and other operations in the states of the federation; it should also be able to pay good salaries as and when due.

A good chunk of the revenue raked in through the allowance can also be given to the National Health Insurance Scheme (NHIS) so the Scheme will have money to buy and subsidize medicines for people who cannot afford them.  Some of the money could even be given to institutions like National Institute of Pharmaceutical Development which capacity to develop new medicines (and this has been shown in the development of anti-sickle cell medicine already) is under-utilized.

With NAFDAC earmarking part of the regulatory allowance to the institute, it (institute) will be able to fund the procurement of modern equipment to do better research. There are many medicinal herbs that could be researched into and more medicines could come from this effort, including access of the Nigerian population to these medicines.

I call on NAFDAC leadership to explore this possibility and present an appropriate bill to the Federal Legislature for its consideration and passage.  The National Assembly should be ready to embrace the proposal if the agency considers it apposite in the current circumstance whereby the Federal Government is looking for ways and means to generate funds for massive infrastructure development. The more the number of Departments and Agencies that are able to come up with ways of generating funds with a view to achieving funding independence and de-linkage from annual budgetary provisions, the better for the efficacy of public finance profile.

Ojeifo is an Abuja-based publisher.