The Executive Secretary of the National Health Insurance Scheme (NHIS), Prof. Usman Yusuf, is embroiled in yet another controversy following his decision to invest at least N25 billion of the scheme’s funds in government securities through Cowry Asset Management Limited.
This is even as the Minister of Finance Kemi Adeosun and her counterpart in the health ministry, Prof. Isaac Adewole, according to documents seen by newsmen, have both warned against the investment, saying it is in violation of the government’s Treasury Single Account (TSA) policy.
The TSA policy requires all federal ministries, departments and agencies to domicile their funds in the TSA with the Central Bank of Nigeria (CBN), except where the agency is granted exemption by the federal government.
But Yusuf, who was suspended by Adewole last year over corruption allegations and nepotism, but was reinstated by President Muhammadu Buhari without recourse to his minister, has said the health minister gave his approval for the investment to be made.
According to a letter seen with reference number NHIS/ES/262 and titled: “Re: Urgent Need for the NHIS to Invest Its Residual Funds,” which was addressed to the managing director of Cowry Asset Management, the NHIS boss appointed the firm as its asset manager/financial adviser to advise the scheme on investments in FGN bonds.
The letter said: “By this letter, I am formally engaging Cowry Asset Management Limited to be the scheme’s Asset Manager/Financial Adviser, and authorising it to advise the scheme on investing in Federal Government securities.”
It also quoted an approval given by the health minister, vide letter Ref Nos: HMH/ABJ/032/X/465 dated August 18, 2017, for the NHIS to start investing its residual funds in bonds.
However, Yusuf was silent on a counter letter with Ref Nos: HMH/ABJ/312/11/82 dated August 29, 2017, titled: “Re: Approval to Commence Investment of NHIS Residual Funds in Securities,” where the minister asked him not to proceed with the investment, citing a violation of federal government’s TSA policy.
“This is to inform you that the Honourable Minister of Finance has advised against the proposal to invest NHIS residual funds in securities. The approval of such investment, she stated, will be an indirect violation of the government’s Treasury Single Accounts (TSA) policy,” the minister’s August 29 letter stated.
The minister’s letter further added that “because of the above, the Central Bank of Nigeria has been advised to pay Treasury Bill rates on any residual balance held in the TSA with the CBN for investment trust”.
“You are therefore directed to stop all actions and processes on the investment of NHIS residual funds in securities with immediate effect and approach the CBN to facilitate the payment of interest on residual funds,” the letter added.
One inside source hinted that the trigger for the “urgent” need to invest NHIS residual funds stemmed from the House of Representatives Committee on Health’s visit to the organisation, as well as concerns that the NHIS boss allegedly wants to use it as an avenue to deploy the yield from the investment into Buhari’s electioneering funds.
The source stated that when the House committee had visited the NHIS for its oversight functions, it recommended that the scheme invested its residual funds in securities, but the then acting executive secretary, Mallam Attahiru, had turned down the suggestion, citing the directive from the health minister in his letter of August 29.
The source further added, however, that “the committee members were not impressed and expressed their disappointment”.
This much was corroborated in the letter written by Yusuf appointing Cowry Asset Management as its asset manager/financial adviser.
“In August 2017, members of the House committee conducted an oversight visit to the scheme and discovered that it had not been investing its funds, despite the continuing depletion of the fund and poor cash backing from the federal government.
“It, therefore, recommended the urgent need to invest the funds it does not immediately require,” the source disclosed.
According to the source, based on Yusuf’s insistence on going ahead with the investment, Cowry Asset Management had in a letter dated March 5, 2018 and signed by Nathan Nwokoro and Okwudili Egwu, written to the executive secretary, requesting the NHIS to invest the sum of N25 billion.
The letter read in part: “That all funds more than the expected 12 months obligations of N62.5 billion so invested in Long-Term FGN securities to serve as your growing reserves with periodic significant coupon payments into the scheme.
“Given your current financial standing, invest N25 billion immediately to take advantage of the current attractive yields in the market.”
Cowry Asset, in the said letter, listed the FGN Bonds to be purchased as 14.2 MAR -14—2024 for N5 billion, 12.5 JAN – 22-2026, for N5 billion, 16.2884- MAR-17-2027 for N5 billion, 10.00-JUL- 23-2-30 for N5 billion and 12.1493- JUL-18-2034 for N5 billion.
Upon receipt of the letter of March 5, the executive secretary equally approved the request on the same day. He wrote: “GM CMD, Approved,” and appended his signature accordingly.
On the same day, yet another letter was written by Cowry Asset Management with the title: “Indicative Offer to Sell FGN Bonds.” The letter contained amongst other investment instructions, the account details of Cowry Assets Management domiciled with Access Bank Plc.
But a former management staff of the NHIS, who pleaded anonymity, informed newsmen that the NHIS executive secretary did not have such powers to invest NHIS Funds to the tune of N25 billion, noting that it required the input of the scheme’s governing council and final approval by the health minister.
“The NHIS Act requires that for any investment up to N10 billion, the board of the NHIS has to make a recommendation to the Minister of Health for approval, so even the board does not have such a mandate. If you ask me, I think it is criminal to embark on such a venture,” he stated.
Another source noted that the approval given by the NHIS boss was carried out to act quickly before the inauguration of the board of the NHIS on March 7, 2018.
“You can see from the dates that the letter was sent in on March 5, 2018, by Cowry Asset Management and it was also approved on the same day, while the board was inaugurated on March 7, 2018.
“If the executive secretary is sincere with his dealings in the NHIS, why didn’t he wait for the inauguration of the board which was some days away?
“Instead, he hurriedly approved not even with the input of the Policy and Planning Department of NHIS.
“Let us say his actions were in the interest of the NHIS, doesn’t the NHIS have a management team? How can an individual wake up and accord himself such rights and privileges?” he wondered.
According to the source, prior to the go-ahead given to asset management firm, the executive secretary had sought the support of the scheme’s head of audit, Mr. John Okon, a general manager, who was earlier suspended alongside the executive secretary.
“The executive secretary approached the head of the audit and told him they needed to raise money for the elections and hence the need for the long-term investment.
“But Okon refused on the grounds that during the seven months he was on suspension, the APC government did nothing for him,” the source further alleged.
He said owing to the lack of cooperation, Okon was redeployed from the audit department and replaced with one Shehu Ademu, an assistant general manager, who the source added, was not qualified to hold the position.
“The executive secretary redeployed Okon from the audit department and he was replaced by his crony Shehu Ademu, who is an assistant general manager and not qualified to hold such a sensitive position.”
When Okon was contacted, he said as a civil servant, he was not authorised to grant interviews to the press.
A senior staff of the health ministry also said that the decision on the long-term investment of government funds without the requisite approval from the supervisory ministry showed “we are an unserious people in this country”.
“In the history of the NHIS, before the commencement of the TSA policy, the highest NHIS has ever invested its funds is 12 months,” he added.
Also, sources in the NHIS said that since his resumption of duty on February 6, 2018, following his recall from suspension, the executive secretary has refused to append his signature to any document except he had initiated it.
“It is such a terrible situation at the NHIS as it stands, the morale of the staff is quite low,” said the sources.
When Yusuf reached, he sighted NHIS Act, Part IV, Section 4, as the reason for the investment, noting that the action was not only right but was done to stem corruption in the system.
Section 4 of Part IV of the NHIS Act states: “The Scheme shall 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 Minister, from time to time, determine.”
The characteristically abrasive Yusuf said those reporting him to the press were corrupt Nigerians who wanted the status quo to remain, adding that his mandate in the NHIS remains to sanitise the system and grow the scheme.
“As I speak now, we have not invested a single penny since I came on board because I wanted to know all the things they did in the past and stop it.
“That’s exactly what I am doing. They won’t have the time to do all the nonsense they did in the past. Every penny will be taken back into the scheme.
“I am in NHIS to do the right thing. And I will do it transparently. I will follow what the NHIS Act says. Corruption will no longer be condoned in this scheme,” he said.
On concerns that the yield on the investment was not meant to stockpile funds for Buhari’s re-election bid, as speculated, the NHIS boss said: “This is not the Jonathan era. They think Buhari will do that nonsense?
“Where we come from we are brought up well. NHIS money is blood money, and it is meant to serve our people.
“Billions have been stolen. Now I am here as the chief executive officer. I will grow the scheme for our people. Every penny that comes in as an investment will be shown to the world, not all the nonsense they did in the past.”
Asked if the health ministry was in support of the investment since the NHIS Act specifies so, he said the minister does not have to be in support, as what mattered was the NHIS Act, which is the legal document establishing the scheme.
“Besides, the ministry gave its approval and we have a board which we are currently discussing this decision with.”
According to him, anybody saying otherwise was lying. “They don’t know who they are dealing with. The money will be invested, returns will be shown to the entire world and the scheme will be grown for our people,” he added.
The head of the NHIS Union, Abdulrazaq Omomeji, told newsmen that the governing council of NHIS was looking at the entire issues in the organisation, adding that the union should be given the chance to see how they can resolve the matter.