A $100 million loan taken by the Nigerian government from the Islamic Development Bank for a malaria intervention project has been stalled due to procurement fraud, the Minister of Health and Social Welfare, Ali Pate, has disclosed.
Mr Pate disclosed this on Wednesday during an investigative hearing organised by the House of Representatives Committee on HIV/AIDS, Tuberculosis and Malaria into the implementation of the Islamic Bank Loan to support malaria elimination in Nigeria under the Lives and Livelihood Project.
Giving the background to the fund, Mr Pate said the agreement for the $100 million project was signed in 2022 by the Nigerian government with the Bank and United Nations Office for Project Services (UNOPS) as the procurement consultant.
He explained that a Nigerian company subsequently emerged as the only pre-qualified entity from the competitive national bidding process. The minister did not however mention the name of the company.
Mr Pate further explained that following the emergence of the company, UNOPS was suspected to have colluded in the bidding process and launched an investigation subject to the terms of the agreement for the implementation of the project and the Nigerian company was later found guilty and blacklisted from all UN contracts for three years.
“The procurement process started in early 2022. In the bid evaluation, flags were raised on the possibility of collusion between the contractors that were bidding in 2023. Consisting with the agreement that they had signed that if there are collusive practices on contract, the UN has the responsibility to use their own system to investigate.
“They exercised that responsibility and deferred it to their office in New York. We can argue the legality and I would say that the House can look into the legality of whether they can do that.
“They investigated for several months and all those that were alleged against were given the opportunity, and an independent panel—not the government of Nigeria, concluded beyond reasonable doubt that there was collusion on the allegation that was made.
“We at the federal ministry were not part of it. UNOPS, using their own system, concluded that the contractors who bid in 2022 there is clear evidence—on that basis, they blacklisted them for three years from any UN contracts,” the minister said.
Speaking further, he explained that the action of the contractor and the agreement signed by the government on the procurement method has put the country in a fix on the loan.
He said $92 million of the loan is with the Nigerian government but cannot use the fund until a compromise is made.
Mr Pate explained that UNOPS had proposed using a foreign manufacturer after the Nigerian company was disqualified, however, he refused to approve it in order to protect national interest.
“When we came into office in August (2023), we realised that there was this change to the competitive bidding clause. And we stayed action on it. We also respect the conversation on national interest in having local manufacturers. The operational challenge is that the first agreement is not implementable because the only entity that was pre-qualified was found to have colluded, and UNOPS cannot, we have asked them repeatedly—can you go back and use that entity? They said no,” the minister said.
He further said the government could consider re-negotiating the procurement agreement with IDB, though it is going to take about 12-18 months for the contract to be renegotiated. He stated that the five states— , Bayelsa, Edo, Enugu, Kogi and FCT that are designed to benefit from the initiative are going to suffer if the issue is not resolved.
The minister informed the lawmakers that they are considering a compromise that is alright with all the parties involved in the agreement.
UN agency undermining Nigerian laws —Panel
The Chairman of the Committee, Amobi Ogah, insisted that the local content component must be adhered to.
He said the UNOPS schemed to deny local manufacturers from participating in the project.
“With due respect, what UNOPS has done in this transaction is so bad because they can tell us as a country what the local manufacturer has done that made them disqualify this local manufacturer.
“The reason why we are all here is because of Nigeria. If it is a grant or aid it would be different. We are here because it is a loan that we are going to pay back with interest. We demand a report from the ministry.
“Anything that would undermine our quest to encourage local producers and manufacturers we seriously frown on it. All of a sudden the whole intent and purpose were changed in favour of a foreign bid to supply the materials whereas as we have one which you earlier pre-qualified and all of a sudden it was set aside to encourage foreigners to supply the net in Nigeria,” Mr Ogah said.
Argument over oath
In the course of the hearing, there was a mild drama when Mr Ogah insisted that the UNOPS team, led by Ghana Multi, Country Officer, Ifeoma Charles-Monwuba, should be placed on oath.
However, the minister insisted that the UNOPS cannot be placed on oath citing UN laws on immunity for officials of the UN. He insisted that they were there as observers.
For over 20 minutes, the minister and the members of the committee debated the issue, but the lawmakers later succumbed and proceeded with the hearing without administering the oath.
In the end, the committee resolved that the minister should provide a comprehensive report of the transactions pertaining to the agreement to the committee within two weeks.
