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Nigeria's Federal Court orders EFCC to investigate ZTE contract

Michael Malakata | June 13, 2014
Nigeria's Federal High Court has ordered the Economic and Financial Crimes Commission (EFCC) to immediately start an investigation into the $470 million CCTV (closed-circuit TV) security camera project that was awarded to China-based ZTE.

Last year, Huawei Technologies was taken to court by a local IT company in Zimbabwe, Secure Dynamix, on allegations that Huawei did not follow proper procedure in a $218 million telecom tender. Secure Dynamix wants the court to compel the country's Anti-Corruption Commission to launch an investigation into how state-owned mobile operator NetOne contracted Huawei to supply equipment for the tender and the manner in which the State Procurement Board awarded the tender.

Similar allegations have also emerged in Kenya and Uganda, where Chinese telecom companies are accused of corruption in winning tenders.

In Kenya, controversy surrounded the awarding of the country's digital migration signal distribution operation to China's Pan African Network Group in 2011. Opposition Kenyan lawmakers accused the Kenyan government of flouting the tender process and knocking local companies out of the bidding.

Less than three years ago, the Ugandan government blocked a $74 million loan from the Import and Export Bank of China (EXIM) meant for a digital migration project, in order to check into procurement irregularities and overpricing. The Ugandan government has not indicated whether the loan process was restarted.

Huawei also got embroiled in a controversy over a tender to lay fiber-optic cables in Uganda. The national transmission backbone and e-government infrastructure initiative was a $106 million project, funded by a loan from EXIM Bank of China. The project was temporarily halted over controversy involving allegations of inflated costs and the use of incorrect cabling.

"Without question, Chinese companies have misconduct in their race to win tenders and none has been punished so far in Southern Africa mainly because China funds most of these telecom projects," said Edith Mwale, telecom analyst at Africa Center for ICT Development.

Mwale said as long as telecom projects in the region continue being funded by China, Chinese companies will continue misbehaving with little fear of punishment.


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