Business
Deals to dupe: How corrupt officials commit Nigeria to dubious contracts

– It has become a big business – Security expert
More insights have been provided on how corrupt government officials and their collaborators in the private sector – both local and foreign – usually lure the country into signing dubious and problematic contracts deliberately set up to fail with shadowy foreign organizations.
The revelation is coming on the heels of several ongoing arbitration hearings in European cities of Paris, France; London in the United Kingdom and Hague in Netherlands instituted against Nigeria by aggrieved parties in the failed deals.
According to Business Hallmark findings, the clique is made up of top government officials, including diplomats, permanent secretaries, directors of finance, accountants and auditors of government MDAs, as well as bankers, lawyers, and financial experts in the private sector assigned or contracted to advise the government on the benefits or dangers inherent in signing off on the deals.
For their own selfish gains, these public officials and supposed experts ignore all red flags and pull all strings to influence decisions of largely naive and conniving officials in the Presidency on the gains of the deals, which, they cleverly package as Foreign Direct investments (FDIs).
Dubious contracts
Sources in the nation’s anti-corruption agency, the Economic and Financial Crimes Commission (EFCC) informed BH that most of the deals were set up in Nigeria by corrupt government officials, who then went as far as Europe, America, and Asia to get willing partners to pose as genuine investors.
“But in actual fact, these supposed investors are fronts with no industry experience or the financial wherewithal to execute the contracts they professed to be experts and subsequently awarded to them”, the EFCC source told our correspondent.
The nation’s media space was last week awash with reports of the presence of top Nigerian officials, including two former presidents, Gen. Olusegun Obasanjo (retd) and Muhammadu Buhari (retd), as well as former Lagos Governor and Minister of Power, Works, and Housing, Mr. Babatunde Fashola (SAN), in Paris, the French capital to testify in the ongoing arbitration case involving the $6 billion 3,960MW Mambilla Hydroelectric Power Project, which was awarded to Sunrise Power and Transmission Company Limited in May 2003 by the Obasanjo administration on a Build, Operate and Transfer (BOT) basis.
However, after four years of inactivity at the project site as a result of funding and technical issues, the administration of former President Olusegun Obasanjo terminated the contract in 2007 and re-awarded it to three Chinese firms, China Gezhouba Group Corporation (CGGC), Sinohydro Corporation Limited (SHC) and CGCOC Group Co. Limited.
Under the terms of agreement, Exim Bank of China and other Chinese lenders are to provide $4.92 billion representing 85 percent of the project’s cost, while the Federal Government will provide the balance of 15 percent, which comes down to $868.87 million.
Miffed by the sudden termination of the contract, Sunrise Power and its promoters, Mr. Leno Adesanya and Mambilla Power Limited initiated several suits in court, arguing that the action was taken in direct violation of the existing BOT contract it signed with the government.
The ensuing legal battles stalled the ambitious project for over two decades, with the funder of the new contract, China’s Exim Bank, refusing to release additional funds until contractual issues surrounding the project were resolved.
Mambilla logjam
The logjam was temporarily broken in November 2012, when the administration of former President Goodluck Jonathan signed a General Project Execution Agreement (GOEA) with Sunrise Power and its partners, authorizing them to return to the Mambilla project.
Again, Sunrise Power and its partners failed to achieve a meaningful impact at the project site, forcing the administration of former President Muhammadu Buhari to sign a separate $5.8 billion EPC contract in November 2017 with another Chinese consortium for the construction of the dam.
After all entreaties to the Nigerian government failed, Sunrise Power Limited and its promoters approached the International Court of Arbitration, under the auspices of the International Chamber of Commerce (ICC) in 2018, seeking $2.3 billion in damages from Nigeria and Sinohydro Consortium.
In 2020, another agreement was reached between the feuding parties after the Chinese government intervened in the matter.
Details of the deal include the need for Sunrise to withdraw its arbitration claim on the condition that the Federal Government make a financial commitment to the project and recognize it (Sunrise) as the exclusive local content partner.
The federal government, while agreeing to the retention of Sunrise’s Chinese partners for the projects, balked at the suggestion that Sunrise Power return as the exclusive local content partner, arguing that the company lacked the necessary expertise and experience to manage the multi-billion dollar worth project.
Sunrise Power again approached the ICC to protests Nigeria’s failure to reinstate it as the project’s local content provider, as well as its refusal to meet its financial obligations, including payments to the EPC contractors and contributions to the counterpart funds for China Eximbank.
Angered by Sunrise’s intransigent, ex-president Buhari ordered the EFCC to go after its sponsors, which culminated in the anti-corruption agency filling corruption charges in court against Adesanya and a former Minister of Power and Steel, Olu Agunloye.
EFCC alleged that Agunloye awarded the initial $6 billion contract to Sunrise on May 22, 2003, without securing formal approvals or the necessary financial backing.
The anti-crime agency also accused the former minister of accepting a bribe of N3.6 million on August 10, 2019, from Sunrise’s Chairman, Leno Adesanya, as a kickback for awarding the contract.
Meanwhile, the case at the ICC resumed last week with top retired and active Nigerian officials giving evidence on behalf of the government against Sunrise. While Obasanjo testified on January 22, Buhari reportedly took to the stand on Thursday, January 23.
Conspirators and collaborators
BH reliably gathered that, while the Federal Government’s witnesses put up an appearance to support its claims against Sunrise Power, witnesses lined up by Sunrise to prove its case against Nigeria at the ICC did not show up at the special hearings for witnesses, which held from Monday, 20th January to Thursday, January 23, 2025.
Sunrise’s witnesses, who failed to appear for the hearings include the embattled former Minister of Power, Olu Agunloye; former Minister of Justice and Attorney-General of the Federation, Michael Aondoakaa (SAN), and an influential Fulani business woman from Senegal, who allegedly influenced the immediate past Minister of Justice and AGF, Abubakar Malami (SAN) to sign the 2020 settlement agreement that favoured Sunrise against Nigeria.
The absence of the witnesses in court, it was learnt, has thrown Sunrise’s camp into confusion. Apart from the Sunrise Power case, Nigeria is currently having as many as 10 pending arbitration cases against it in European courts, as well as hundreds of pending local judgement debts.
Pending international arbitration cases that have continued to embarrass and drain the country’s resources include the Zhongshan Fucheng Industrial Investment versus Ogun State Government suit in London, which snowballed into the seizure of three presidential aircraft in August 2024 in France; Federal Republic of Nigeria v Process & Industrial Developments Limited (P&ID) and the potentially volatile contract dispute between Azura Power Limited in Edo State and the Federal Government.
In the Zhongshan Fucheng Industrial Investment versus Ogun State Government suit, an arbitration tribunal chaired by the president of the UK Supreme Court awarded $74.5million in compensation to the Chinese firm.
Three presidential jets belonging to the Federal Government were later seized in France when Ogun State refused to pay the judgment debt.
It took the intervention of the Chinese government for one of the aircraft in the Presidential fleet to be released.
Likewise, a London arbitration court slammed a $1.2billion judgment debt on Nigeria after hearing P&ID’s suit against it.
The judgment was later reversed and cost awarded against P&ID after the tribunal found out the contract was a product of fraud.
In his ruling on Federal Republic of Nigeria v Process & P&ID, the tribunal judge, Justice Robin Knowles concluded that “P&ID’s Arbitration was a shell that got nowhere near the truth”. Hearings to decide costs and sanctions against P&ID and its promoters are still ongoing.
Another potentially explosive deal entered into by Nigeria is the Partial Risk Guarantees (PRGs) the Federal Government signed with the World Bank in August 2015 to provide backing for the privately-owned Azura-Edo Power Plant.
According to Wikipedia, PRGs are a suite of agreements, including the indemnity agreement that could trigger a sovereign default.
While former President Jonathan initially refused to sign the contentious PRGs because of the failure to indemnify Nigeria in the event of default by Azura in repaying its loans, his successor, Muhammadu Buhari, was pressured into signing the contracts by close aides.
The guarantees, which also cover a $237 million loan collected by Azura from various banks, have now put enormous hole in the nation’s pocket with the country paying $30 million to Azura monthly, even when it did not take the power generated by the plant.
There is a way out though: A get-out clause of $1.2 billion, which the Federal Government must pay to extricate itself from the deal.
BH gathered from sources in the Ministry of Finance and the Central Bank of Nigeria (CBN) that these contract scandals are not the only ones in contention, as corrupt officials have signed away Nigeria’s commonwealth to foreign agents and their local collaborators through contentious FDI deals.
This revelation was corroborated by Pinsent Masons, a UK based law firm that specializes in arbitration cases.
According to Pinsent Masons, a vast majority of its cases are of international nature, with Africa emerging as the fastest-growing region from which parties involved in London Court of International Arbitration (LCIA) cases originate.
“While parties from Western Europe continue to account for the largest number of parties in LCIA arbitration cases, Africa has seen the sharpest rise in terms of the proportion of parties in LCIA arbitrations, according to LCIA’s 2023 casework report.
Nigeria & Africa
“The figures show the percentage of parties from Africa doubling from 4% in 2022 to 8% in 2023. Mauritius and Nigeria remained as the top two countries in the African region, while parties from North Africa saw a notable year-on-year rise, from 5% to 8%.
“In contrast, the proportion of parties from Asia plummeted from 24% in 2022 to 8% last year. The percentage of parties from Singapore, China, Hong Kong and Pakistan more than halved during the same period”, declared Rob Wilkins, Pinsent Mason’s arbitration expert.
Another source in the EFCC revealed that the decision of the present administration to stop handing over Nigeria’s commonwealth to dubious investors and their Nigerian collaborators has resulted in the unearthing of a rigged contracts award system.
“Since the Federal Government decided to contest judgment debts against it and mandated security agencies to beam their searchlights on them, many cases of sleaze have been uncovered.
“In most cases, the overseas addresses given by foreign companies and businessmen posing as investors have been found to be non existent.
“They (companies) were primarily set up to scam Nigeria and subsequently dissolved after achieving their purposes.
“For instance, when we started looking into P&ID, the oil and gas company set up by shadowy Irish businessmen, Michael Quinn and Brendan Cahil at the height of the over $1bn settlement judgment against Nigeria by a London court, we found out that it was set up in 2006 with only one traceable office in Abuja, while its head office in the UK is non existent.
“Investigators found out that the company is a shell company registered in Tortola, in the British Virgin Islands with a P.O.Box as its legal address to ostensibly shield the company and its owners from scrutiny.
“During investigation, an Irish businessman, who used to work for Quinn and Cahil, Neil Murray, admitted that he had obtained access to privileged documents on internal government discussions between 2010 and 2013.
“He said the leaked papers gave P&ID extraordinary insight into Nigeria’s thinking. These unscrupulous businessmen are enabled by pliable Nigerians, who normally partake in the sleaze. In fact, they are the real instigators of the contract scams”, the EFCC source told BH.
Cost to Nigeria
Apart from losing billions of dollars to dubious contract schemes, Nigeria also cough out huge sums annually in the form of judgment debts.
On May 24, 2024, just five days to his leaving office, former President Buhari sought and got the approval of the Senate to pay $556million, £98million and N226 billion respectively to litigants in the form of judgment debts
According to the former president, the debts, which were secured during litigations against federal ministries, departments and agencies of the federal government were approved by the Federal Executive Council (FEC) during its meeting on March 29, 2023.
Speaking on the development, an operative with the Nigerian Financial Intelligence Unit (NFIU), Segun Obe (not real names), said the looting of the treasury through dubious contracts and debt settlements has become a big business.
“It didn’t start today and it won’t end tomorrow. Or how do you explain the former president seeking approval for the release of billions of dollars to settle judgment debts barely a week to leaving office.
“It is possible he (Buhari) is oblivious to the fact that the funds will be looted. But many in government close to the Daura-born general can’t claim ignorance of what the money was meant for.
“I am aware that state officials are deliberately setting up the government for a fall. Even when aggrieved parties don’t have the intention of filling charges against government, like in cases of destruction of properties, officials usually approach them to go to court to claim damages or reparation.
“In most cases, they (officials) are the ones that compute the amount to be paid to litigants and hire lawyers on their behalf. When cases go against government in lower courts, they seldom appeal it, knowing they are time-bound.
“When the cases have reached the conclusive end, they pile pressure on government to pay up, which they then share among themselves.
“In most cases, the original litigant get less than what he bargained for. I know of a client, who lost a property to a road project. He was approached and asked to seek redress in court.
“I agreed with him on seeking redress but we disagreed on the exact compensation to be paid. While I asked for N75 million on his behalf, some people in government told him that they can get N560 million for him.
“Unfortunately, he succumbed to their overtures and sidelined my chamber. A year and a half later, he came to my office to complain that while the judge awarded the sum of N560 million damages to him, which government duly paid, he was only given N53 million out of the money.
“When I asked what happened to the balance of N22 million of the N57 million I initially demanded for him, he lamented that they told him it was paid out as legal fees to the lawyer that handled the case.
“While some of these judgment debts are genuine, the bulk are dubious. It has become a big business, which I doubt any government can stop”, the NFIU source stated.