EXCLUSIVE: How Zainab Ahmed, ex-finance minister, quietly engaged consultants for questionable gas deal

A consultancy deal quietly orchestrated by Zainab Ahmed, former minister of finance, budget and national planning, is raising eyebrows in the power sector, with several insiders telling TheCable it is “illegal” and “a waste of public funds”.

To execute a Make-up Gas Reprocessing (MUGR) deal, the ministry appointed a “transaction adviser” in an arrangement that some fear might land the federal government in legal challenges.

Make-up gas (MUG) is the gas a power generation company (GenCo) has already paid for but has, for one reason or another, not utilised during the year.

A gas supply agreement (GSA), a bilateral transaction executed by a GenCo and a gas supplier, spells out terms for a review of the clauses.

Ahmed had proposed that Nigeria could covert the MUG to liquified natural gas (LNG) and export to earn revenue for the federation.

She sought and got the approval of former President Muhammadu Buhari.

However, there are now questions as to her engagement of Ahmed Zakari & Co, an accounting firm, as transaction advisers in what is purely a bilateral agreement between Calabar Generation Company Limited (Calabar GenCo) and Accugas Ltd.

Calabar GenCo is owned by the Niger Delta Power Holding Company (NDPHC), which belongs to the three tiers of government, while Accugas is a private company.

“Accugas and NDPHC were already discussing the extension of the sunset date for the utilisation of the MUG without the involvement of any consultant or adviser. Both parties subsequently executed an addendum to the GSA that provides for the MUG to be utilised within seven years,” an official of the ministry of finance told TheCable.

“The implication is that at the time Zainab Ahmed executed the transaction agreement with Ahmed Zakari & Co in September 2022, they all knew that there was really nothing for the firm to do, beside being paid for doing nothing.”

TheCable could not confirm the exact fees Zakari & Co is being paid but sources said it is in dollars.

According to an industry insider who spoke with TheCable, “The standard practice with respect to the utilisation of MUG is for the buyer to contact the seller and for both contracting parties to negotiate alternative durations for the utilisation of the MUG. This is necessary because it is gas that the buyer has already paid for. There is usually no requirement for a third party to get involved. Indeed, because the GSA is a bilateral agreement, it will cease to be so if third and fourth parties get involved.

“What would usually happen is for the two parties to concede doing one of the following or both: one, renegotiate the take-or-pay quantity upon which the GSA was executed or, two, extend the sunset date for the utilisation of the MUG.”

CURIOUS CONTRACT

Moyi Dahiru, then special assistant on power to Ahmed, had led the discussions with the power sector stakeholders to discuss the MUGR proposal early 2022.

In attendance were officials of the Nigerian Bulk Electricity Trading (NBET) Plc, NDPHC Ltd, Accugas and Azura.

An official of the ministry of finance told TheCable: “Azura made it clear to Mr Dahiru that they do not have any business with the MUGR, particularly because the government is not a party to the GSA.”

However, NDPHC — which manages the National Integrated Power Projects (NIPP), including 10 GenCos — did not raise any objections, reportedly because it did not want to upset ministry officials who process the payment of the gas invoices every month.

In February 2022, Ahmed secured an approval from Buhari to retain the accounting firm of Ahmad Zakari & Co as the transaction adviser.

This became effective from September 5, 2022 when the firm signed the agreement with the Federal Government of Nigeria (FGN), represented by the ministry of finance.

“Ahmad Zakari & Co’s agreement is of no effect, but money is being paid to the firm for doing nothing,” an official of the ministry of finance, who declined to be named for fear of victimisation, told TheCable.

“The truth is that top government officials usually connived with some of the principal members of staff in the Presidential Villa to mislead Buhari into signing all kinds of things, including appointments for the most unqualified persons and dubious payments.”

‘PRESIDENTIAL APPROVAL’

On May 24, 2023, Aliyu Ahmed, the permanent secretary in the ministry of finance, wrote a letter to Total Energies with the title ‘Make-Up gas re-purpose transaction, conveyance of extracts of presidential approval of global framework transaction’, conveying the directive of the government on the treatment of the MUG by GenCos.

The make-up gas belonging to Calabar GenCo is under the MUGR.

“If I were to advise President Bola Tinubu, he should direct the ministry of finance to stop all payments to Ahmed Zakari & Co and ask the ministry to submit a report of the payments that have been made to the firm so far and for what purposes,” an official said.

“President Tinubu should ask for all the agreements under this MUGR and demand a copy of the addendum which the Accugas executed with the NDPHC that extended the sunset date for the utilisation of the MUG to seven years.”

TheCable has contacted the media office of the former finance minister for comments.

TheCable understands that Dahiru has been putting pressure on Calabar GenCo to execute the deal since he left office with the former finance minister.