INVESTIGATION: Buhari Govt Violates Federal Law, Illegally Spends over N84 billion Health Insurance Funds

The Buhari administration has spent a whopping N84 billion from the National Health Insurance Scheme (NHIS), in an illegal move that violates a federal law, The NEXT EDITION can authoritatively report today.

The funds are part of the 10 percent monthly deductions on salaries of workers’ who enrolled in the insurance scheme with the hope of accessing healthcare services for themselves and family members.

In the last three years, the administration has illegally appropriated a total of N47.5 billion from the scheme and withheld another N37.2 billion.

This newspaper could not ascertain what the government has done with the withheld funds but document shows the amount represents a part of the deductions made on workers’ salary between 2012 -2017 and not remitted to the scheme’s account with the Central Bank of Nigeria (CBN).

The illegal practice started in 2015 with the government’s introduction of the Treasury Single Account (TSA) a common pool of all government funds. It lasted well into 2017, documents reviewed this newspaper show.

The TSA was to bolster the then new government’s plan to combat rampant corruption by mopping up loose funds.

Under the TSA rule, all government revenues were transferred into a single account, a break from the past when different government agencies operated different accounts.

As part of that initiative, the Buhari administration compelled the NHIS to transfer its total deposit of N146 billion into account No. 0020163661013 with the CBN.

However, one of the bankers to the scheme, Guarantee Trust Bank, in the course of complying with the new policy, somehow transferred N11.5 billion into the Consolidated Revenue Fund Account of the Federation in error.

The amount was supposed to have been sent to the scheme’s TSA account with the CBN.

Transferred to the wrong account, the GTB money was promptly confiscated by the government, and has not been refunded despite entreaties by the former leadership of the scheme and leaders of organised labour.

Instead, the government went a step further and made direct withdrawals from the NHIS account.

The first withdrawal was made a few months after the appointment of the reinstated Executive Secretary of the scheme, Usman Yusuf.

Under Mr. Yusuf’s watch, the Accountant General of the Federation, Ahmed Idris, authorised the withdrawal of N5 billion from the scheme’s TSA account to an unknown account on December 28, 2016.

The deduction automatically generated a multiple debit entry No. MDC163630008 and a transfer alert: FD/LP2016/51/T/292/DF.

Sources who know about the matter said the embattled NHIS boss pretended to make effort for the withdrawals to be reversed but nothing ever came out of it.

The violations continued.

While preparing the 2017 budget for the Federal Ministry of Health, the government allocated N17 billion from the NHIS funds for intervention in tertiary institutions, another N8 billion for revitalisation of 1,000 primary health centres and N1 billion for the procurement of “HIV commodities.”

However, the leadership of organised labour rejected the move and warned the government to desist from the planned deployment of NHIS contributions to fund part of the budget of the federal health ministry.

This newspaper has obtained a copy of the letter to President Buhari dated October 12, 2016, in which leaders of the organised labour warned against attempts to illegally appropriate the NHIS funds.

The letter was jointly signed by the President of the Nigeria Labour Congress (NLC), Ayuba Waba, and his counterpart in the Trade Union Congress (TUC), Bobboi Kaigama.

Labour drew Mr. Buhari’s attention to the fact that the scheme was established following government’s poor funding of healthcare delivery system in the country.

“Like the pension fund, we demand that government must resist the temptation of rushing to draw from it in times of budgetary difficulties. All previous governments since 1999 have refrained from interfering with the NHIS funds.

“We urge the government to stop the on-going plot to divert this fund as it not only constitutes a violation of the NHIS Act but even morally reprehensible on the part of government to tinker with insurance premium paid by workers for their medical wellbeing.

“We wish to restate our conviction that the plan by the minister is against the provisions of the NHIS Act No. 35 of 1999. We, therefore, request that you immediately halt this move to safeguard the NHIS from being endangered.

“We were convinced to accept the NHIS in the first place because of the necessity to continually have available funding for workers’ healthcare. The positive and immediate intervention of Your Excellency will foster industrial harmony in the public service,” the labour leaders stated.

Mr. Buhari neither stopped the transfer of the NHIS funds to the TSA or the minister from including a part of it in the 2017 Appropriation Act.

Acting on the proposal presented to it by the Presidency, the National Assembly illegally appropriated a total of N26 billion of the NHIS funds to the Federal Ministry of Health under the 2017 Appropriation Act.

It was not only the Buhari Government that was taking money illegally from the scheme; Mr. Yusuf, the head of the insurance agency was also accused of stealing millions through questionable training programmes and foreign trips.

Following series of petitions and complaints by concerned workers, labour and civil society groups, Femi Osinbajo, who was acting president when Mr. Buhari went on medical vacation to the United Kingdom had directed an investigation into the allegations.

He also approved Mr. Yusuf’s suspension to allow room for investigators to look into his activities in the health insurance agency.

Read also: 10bn NHIS scam: Buhari’s government has lost honour –PDP

Based on Mr. Osinbajo’s directive, Mr. Adewole, promptly suspended the NHIS boss and set up a panel headed by the Permanent Secretary in the Ministry, Binta Bello, to investigate allegations made against Mr. Yusuf.

The panel which was inaugurated on July 11, 2017, went into work and submitted its report in August of the same year.

Investigations by this newspaper and the report of the panel showed Mr. Yusuf committed serial violations of federal procurement laws, stole millions in illegal estacode and allowances and entrenched nepotism in the NHIS.

INVESTIGATION: How Reinstated NHIS Boss Misappropriated over N1bn

INVESTIGATION: How NHIS boss Yusuf pocketed millions of naira in illegal estacodes, allowances

The NHIS boss was not only indicted by the ministerial panel, he is also being investigated by the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC).

Despite these, President Buhari had in December, 2017, ordered his reinstatement in a move that has seriously tainted the anti-corruption credential of the government.

Barely a week after Mr. Yusuf was ordered to be reinstated, N5 billion was again withdrawn from the NHIS account with the CBN.

It was Mr. Idris, the Accountant General of the Federation, who approved the withdrawal on January 11, with reference No. AGF FD/OAGF/ADC/2016/194/T/168/DF.

This brings to N47.5 billion the total amount taken by the government from the NHIS account.

It is not clear whether there were other deductions, or how much the National Assembly illegally appropriated from the NHIS money.

However, none of the withdrawals was requested by the NHIS management and neither was it informed before the monies were illegally taken.

Breaking the law

But the breaches were clear enough. The directive that health insurance funds be sent to the TSA violated the provisions of the National Health Insurance Scheme Act, 1999, which prescribes how funds accruing to the agency should be handled.


Apparently, to draw attention to this, the leadership of the NHIS on September 14, 2015, wrote to the AGF, Mr. Idris, complaining about the new policy.

The letter referenced: NHIS/ES/354/1/2, and signed by the then Acting Executive Secretary of the scheme, Olufemi Akingbade, said the scheme is a Public Private Partnership (PPP) directed at providing assessable, affordable and qualitative healthcare for all Nigerians.

Under the arrangement, funds for the scheme are obtained through deductions from salaries of Federal, states and local government employees, organised private sector workers, international donor, voluntary contributions, dividends and interest on investments and stocks.

Mr. Akingbade argued that Part IV, section II (4) of the Act empowers the scheme to establish and maintain funds from which expenditure shall be defrayed.

As an insurance scheme, the then NHIS boss argued that the pooled contributions needed to be grown through investment, not only to sustain the programme but also raise more funds to finance other commitments including community-based social health insurance programme which requires between 80 – 100 percent subsidy.

“In consideration of the above, the AGF may wish to kindly agree that the NHIS has peculiarities which are worthy of consideration to waive the application of the Federal Government’s TSA policy as anything short of this could lead to the system failure that would not be in the interest of the Federal Government.

“In the light of the above, we are requesting that the AGF graciously consider and waive/exempt NHIS from the present policy,” a part of the letter reads.

When it became apparent the AGF would not reverse the directive to pay enrollees funds into the TSA, Mr. Akingbade wrote to President Buhari through the permanent secretary in the Federal Ministry of Health.

The letter which requested for a presidential waiver was obtained by this newspaper in the course of its investigation.

Dated November 5, 2015, the letter with reference No: NHIS/ES/254/1/122, read in part, “While we wish to kindly and most respectfully bring to the notice of Mr. President that NHIS is proud to be among the MDAs (ministries, departments and agencies) that have complied with the (TSA) directive, our compliance, notwithstanding, has teething effects on the operations of NHIS healthcare services, due to foundational, life and operational peculiarities that distinguish NHIS from most MDAs.”

Going by the principles of insurance, the NHIS had argued the pooled contributions needed to be grown through investment activities not only for the purpose of ensuring sustainability but also to raise more funds to finance other programmes including community-based health insurance scheme which required subsidy of between 80 – 100 percent.

Part IV, section II (4) of the Act empowers the scheme to invest any money not immediately required by it in Federal Government securities or in such other securities as the Council may with the approval of the health minister, from time to time determine.

Part IV also empowers the scheme to establish and maintain a fund from which shall be defrayed

It was based on the provisions of the Act that the leadership of the scheme begged the president to exempt the NHIS from the TSA policy of the government.

“The president may wish to kindly agree that NHIS funds are not payments due to the Federal Government as contained in the circular issued by the Federal Government concerning TSA policy, as the funds are deductions from federal government public servants under the Formal Sector Social Health Insurance Programme, Public-Private contributions, organised private sector contributions, international donations and voluntary contributions,” the letter read.

“Mr. President, Sir, while we were pondering on the impact of the policy on NHIS healthcare service delivery, the Department of State Services (DSS) wrote us, and the contents read in part, ‘this development (TSA) has ushered unprecedented distress in the administration of the scheme in our facilities nationwide.’”

“In addition, the Defence Health Maintenance Limited which is in charge of the Armed Forces has conveyed their difficulty with the TSA policy.

“Their letter reads in part, ‘Some banks keeping the National Health Insurance Scheme (NHIS) accounts of the Defence Health Maintenance Limited (DHML) healthcare providing facilities in the Armed Forces have transferred those accounts to the Central Bank of Nigeria TSA policy. The bank’s actions have made the rendition of medical services in the Armed Forces difficult.’

“It is, therefore, on the strength of these peculiarities which are worthy of consideration that NHIS is making a case for Mr. President to waive the implementation of the TSA policy for the scheme in particular, as this could affect the realisation of the mandate of providing easy and affordable access to healthcare for all Nigerians and by extension the universal health coverage embarked upon by the Federal Government through the scheme.”

In a single prayer, the scheme urged Mr. Buhari to exempt it from the TSA policy so as not to erode the confidence of the enrollees in the operations of the NHIS.

The president had turned down the request and ordered the NHIS to transfer all its funds to the TSA from where billions have been withdrawn through illegal appropriation and suspicious authorisations.

You Are Talking Rubbish

For the first time since this newspaper started investigating the operations of the national health insurance agency, the Executive Secretary, Mr. Yusuf, responded to questions from our correspondent on Tuesday.

However, the conversation was anything but courteous as Mr. Yusuf hurled insult on our correspondent.

“Who told you that story? All right! Why don’t you go ahead and publish it? Go ahead and publish your lie,” he began.

“Did you say I should go ahead and publish the lie?” our reporter asked.

“Absolutely,” he replied.

Continuing, our reporter said, “That’s not civil at all.”

“Are you guys civil? Do you know what you are doing? You are not a journalist and that’s why you guys don’t know what you are doing.

“What rubbish are you publishing? I have been in the NHIS and I know all the data. What rubbish are you talking about? Go ahead and publish your rubbish if you think you have some documents,” Mr. Yusuf blurted.

“Permit me to educate you, Sir, our correspondent interjected.

“You don’t insult someone who calls you politely to ask for an explanation on an issue involving the public office you occupy. It speaks so much about the quality of your character,” our reporter said before Mr. Yusuf dropped the call.

Attempts to speak with the Minister of Health, Isaac Adewole and his counterpart in the Ministry of Information and Culture, Lai Mohammed, failed as they would neither pick calls nor respond to text messages.

The spokesperson to the Minister of National Planning, Akpandem James, told this newspaper his principal is not responsible for generating budget proposals for MDAs and directed our correspondent to speak to Mr. Adewole on the matter.

When contacted, the spokesperson to the Accountant General of the Federation, Kene Offie, requested us to send her an email concerning the issues in contention.

However, on getting the mail, she requested us to send a formal letter to her to forward to the relevant official in the AGF office who would be in a better position to respond to the issues raised by this newspaper.

A Freedom of Information (FOI) request was, therefore, sent through Ms Offie to the officer in charge in the AGF’s office on February 15.

The AGF’s spokesperson acknowledged receipt of the letter on February 20 but till the time of filling this report, we are yet to receive a response to our request.

Under the FIO Act, relevant officials in the MDAs are expected to respond within seven days of receipt of requests.