₦34.5 Billion was not embezzled in the Rivers State syringe factory

By Chamberlain S. Peterside, Ph.D.,
Former Commissioner For Finance, Rivers State

1. I was dismayed to hear in the news that the Rivers State Executive Council reached a decision on Friday May 3rd 2019 to persecute myself and the former Commissioner for Health, Dr. Sampson Parker and the Project Manager/CEO of Integrated Medical Industries (IMI)) Mr. Amenya Wokoma for the embezzlement of ₦34.5 billion in the Rivers State Syringe factory. Nothing could be further from the truth, hence I want to emphatically and unequivocally state for the records that no such money was embezzled or squandered by me. The facts are irrefutable and the financial records of the project are available at the Ministry of Finance to support my assertions.

2. Key highlights of my submission:

A) Phase One of the project (the existing Syringe Factory) was financed and built by Rivers State Government (RSG) under His Excellency Governor Peter Odili at the cost of N650million.

B) The expansion of the factory to manufacture 1 (one) billion auto-disposable syringes (ADS) per annum was commissioned by His Excellency Governor Chibuike Amaechi and approximately N35,7billion was spent (as at May 2015) to bring the project up to 60% completion. Upon completion it was to create 2000 jobs. The funds expended on the project thus far includes direct payments to offshore manufacturers (through letters of credit), bank charges, payments for civil works to local contractors, expenses for customs clearance of containers and other operating expenditure.

C) Rather than delay the ongoing execution of the project and risk cost escalation, RSG continued to fund the project while awaiting the issuance of sovereign guarantee by the FGN. This would have enabled the ECA facility kick in.

D) It was considered a priority project by the Federal Government of Nigeria (FGN) under the administration of President Goodluck Jonathan, that was to issue a sovereign guarantee and bulk purchase order(as off-takers),but that didn’t materialize until the end of the tenure, even though an MOU was signed to that effect.

E) In 2016, His Excellency Governor Nyesom Wike visited the factory and expressed delight at the amount of work already done on the project and promised to support the project moving forward.

F) The Vice President Prof Yemi Osibanjo was scheduled to visit the factory in 2017 during his trip to Rivers State, but due to some inexplicable circumstances was unable to at the last minute.

G) The judicial panel of inquiry amongst other things recommended that the current administration should complete the project. It did not in any section mention my name (personally or in official capacity) as culpable in any malpractice or allude to any financial impropriety perpetrated by me during or after my tenure in office.

3. For the avoidance of doubt, let me remind us that I served as the Commissioner for Finance in Rivers State between 2011-2015 under the administration of H.E, Rt. Hon Chibuike Rotimi Amaechi and by virtue of that position I also served as a board member in the IMI, including the former Commissioner for Health, Dr. Sampson Parker and the former Attorney General and Commissioner for Justice, Hon WoguBoms. IMI was the expansion of an existing syringe factory built by PAHF (Pan-African Health Foundation) during the administration of Dr. Peter Odili. The expansion was targeted to produce about 1 (one) billion disposable syringes per annum as well as other lifesaving health care products (like intravenous fluids and bottled water).In my capacity as the Finance Commissioner and non-executive board member, I gained a frontal view of the implementation process. Whereas the decision on the expansion was taken prior to my assumption of office in June 2011, all disbursements on funding the project was duly approved by the Executive Council and treated accordingly. I do not regret any decisions and in fact remain quite honored to be called upon to serve my state and contribute to the improvement of the social wellbeing and economic conditions of my fellow citizens under the stewardship of Governor Amaechi.

4. To give some context on this project to any discerning mind, I must say that the syringe factory in my opinion is one of such pivotal economic investments aimed at not only creating jobs or expanding opportunities but improving the standard of health care delivery. I was opportune to meet and interact with some of the international vendors and financiers as well as officials from UNICEF that had proposed to be one of the major customers. It may interest you to know that Nigeria is a major importer of disposable syringes and recipient of foreign donations of syringes manufactured abroad. Based on the initial funding model, the factory was to be financed through ECA (Export Credit Agency) facility, mainly from Austria and Germany (75%) and RSG (25%).

5. Diamond Bank was the official local project banker while Afrexim Bank was also a key part of the financing scheme through which the ECA facilities will be disbursed. The project is designed as a purely industrial entity that would be self-sustaining and commercially viable. Upon completion, RSG has the option of divesting and make a profit from the project. The role of RSG therefore was to help support the kick-off by carrying the initial risks associated with such large-scale investment until completion through a sovereign guarantee as we have recently seen in other projects like Azura Power Plant (in Edo State) and similar manufacturing or infrastructure projects in Nigeria. During the period in question, it is worth noting that the auditing firm charged with reviewing the books of account was Ernst & Young (EY). The audited reports went through additional peer review by PriceWaterhouseCoopers (PWC)

6. Prior to my exit from office in 2015 the factory was 60% complete with a 14MW gas-fired independent power plant (IPP). Sadly, activities in the expansion phase halted after May 2015 due to the inability and delay in obtaining the sovereign guarantee to pursue the project to completion. I stopped serving on the board upon leaving office in May 29th 2015. To now learn that I am being asked to answer for the activities of a factory that stands very glaring waiting to be completed is simply reprehensible. It begs the question of how ₦34.5 billion could have been squandered(as the Honorable Attorney General alluded to in his media report) if all that amount of work has been put in and huge resources already invested into what should have otherwise been a highly productive and priority project for the state government?

7. The panel of inquiry on the project visited the site in January 2019 and obtained full progress report and memorandum from the project manager. The panel recommended the speedy completion of the project and recovery of any assets missing from the factory. It is to my knowledge that several memos and testimonies were submitted to the panel, including by the auditors, bankers and project managers. Audited financial statements by EY (the auditing firm) and other relevant accounting and project documents were tendered to demonstrate that there was no mismanagement of funds as the assets, uncompleted warehouses and over 70 containers of equipment remain in the project site in Rumuosi, Port Harcourt, while additional equipment is with the manufacturers pending issuance of payment guarantees.

8. The project has suffered immeasurably for lack of continuity and inability to prioritize its timely execution. But to blame the previous board or accuse me of embezzlement is nothing short of character assassination, totally inappropriate and slanderous at best. It is wrong to allow public resources waste away on the altar of politics of vendetta and bitterness. The common man ultimately suffers in that process. Rivers State is in dire need of infrastructure investments and productive assets that can drive growth, foster human development and create jobs. The recent effort of political parties in the state to close ranks and seek peace and progress is a welcome development that ought to be pursued relentlessly to enable the state move forward. There are enormous challenges facing us, the least of which is this spurious accusation against my person of embezzling a whopping ₦34.5 billion. This is plain wrong and utter falsehood. I stand ready to vigorously defend myself against such misguided allegations that is capable of tarnishing my hard earned reputation.

Signed:

Chamberlain S. Peterside, Ph.D.

Former Commissioner for Finance

Rivers State, Nigeria

May 3rd, 2019