Harry Cassin Publisher and Editor

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Africa nations shut down tainted China telecoms deals

The Zambia government has terminated a $210 million closed circuit television camera contract with China's ZTE because of alleged corruption.

A government source told AllAfrica last week that if the contract for traffic control had continued, Zambia could have lost $100 million through inflated billings.

The contract had been awarded earlier this year ‘without an open tender procedure, raising suspicions of corruption,’ the report said.

ZTE and other Chinese telecom companies are under increasing pressure in Africa following years of allegations that their business development has relied on large-scale bribery.

Although the Chinese government has been funding telecom projects in Africa through low-cost loans that require supply from China companies, African countries are putting up more resistance because of alleged graft.

Last year ZTE and Huawei Technologies were convicted of corruption in Algeria. The companies were banned for state telecoms tenders there for two years for bribing executives at state-owned Algérie Télécom.

In that case, three Chinese executives were sentenced by an Algeria court to ten years in prison in absentia for paying $10 million in bribes through offshore accounts in Luxembourg.

In 2011, AllAfrica said, Nigeria investigated ZTE for a $470 million contract for the national communication security system. There was no public report of the outcome.

The Ugandan government in 2011 blocked a $74 million loan from the Import and Export Bank of China for a digital migration project. There were alleged ‘procurement flaws and overpricing’ by Huawei.

Another project in Uganda for a $106 million fiber-optic cable funded by a loan from the Import and Export Bank of China was stopped because of alleged inflated costs and the use of incorrect cabling.

And in Kenya, ‘opposition lawmakers accused the government in 2011 of flouting tender procedures when it awarded Pan African Network Group of China a tender for the country's digital TV signal distribution,’ AllAfrica said.


Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.