ZoodLabs Faces Intense PAC Scrutiny Over Financial Mismanagement Claims
By The Reformer Team
On Monday, January 13, 2025, a critical session unfolded at the Parliament Administration Building in Tower Hill, Freetown, where the Ministry of Communication and ZooLabs presented their case before the Public Accounts Committee (PAC). The session, led by Honorable Deputy Speaker Tawah Conteh, emphasized the need for verifiable and accurate information to ensure transparency and facilitate thorough scrutiny of financial transactions.
The discussions delved into the intricate financial arrangements between ZooLabs and the government, initiated by an agreement signed in June 2021. By July 2022, ZooLabs’ financial contributions totaled $2,264,000. Contributions to the Digital Development Fund (DDF) and the Consolidated Revenue Fund (CRF) began in September 2023. As of October 31, 2023, ZooLabs had disbursed $1,359,600 via ITGS and an additional $406,404 in late September 2023. Between September 2022 and late 2024, ZooLabs deposited a cumulative $2.8 million into the CRF, with $480,000 directed to the DDF.
Initially structured as a 16-quarter agreement spanning June 2021 to December 2024, the timeline was revised to 14 quarters to enhance clarity and accountability in financial reporting. ZooLabs’ Director, Mahmoud Idriss, stated that during the takeover, the company assumed responsibility for 23% of infrastructure valued at $23.5 million, while the government retained the remaining assets. This raised questions about the necessity for parliamentary oversight of payments authorized by the Ministry of Information and Communication.
Idriss affirmed that all payments from June 2021 to December 2024 adhered to Ministry directives. Monthly CRF contributions began in September 2023, following a letter outlining ZooLabs’ management of the East Africa Fiber Optic Cable Landing Station. This agreement mandated annual payments of $1.44 million to the CRF and $360,000 to the DDF. By mid-2023, ZooLabs had remitted $2.26 million of the $3.6 million owed to the CRF, leaving a $1.44 million balance. However, funds designated for the DDF were redirected to overseas obligations per Ministry instructions.
The session concluded with ZooLabs pledging to begin monthly payments of $180,000 to the CRF in September 2023 and an additional $360,000 by the month’s end. The Ministry of Communication was tasked with collaborating with the Accountant General’s Department to establish dedicated DDF accounts for improved fund management. Concerns were raised about the lack of transparency surrounding government-owned facilities, which were expected to generate significant revenue for ZooLabs.
ZooLabs maintained its commitment to fulfilling contractual obligations, emphasizing payments made under the Ministries of Information and Finance’s guidance. A reconciliation process verified the payment of $2.26 million as part of a strategy to address outstanding balances. Idriss acknowledged discrepancies between formal contracts and informal directives but assured compliance and proposed public disclosure of expenditure details to foster accountability.
At the time of the takeover, ZooLabs retained only 18 of 120 original staff members, facilitating $103 million in payments to former employees via proper banking channels. Contract clauses permitting the use of DDF funds for government activities sparked debates about fund allocation and adherence to agreements.
Idriss highlighted transfers totaling $8.1 million in 2023 and $42.9 million in 2024 to the CRF, amounting to approximately $51 million. This prompted discussions on aligning reported payments with actual transfers, underscoring the need for comprehensive reconciliations and proper fund allocation.
Fluctuating exchange rates from the Bank of Sierra Leone posed challenges, prompting calls for standardized payment mechanisms. Sustainability of payment plans and potential impacts on government services became critical discussion points, emphasizing the need for transparency and collaboration.
As the session concluded, Idriss appealed to PAC members, including the Deputy Speaker, for an adjournment to compile and present necessary documentation in compliance with the Standing Orders of Parliament, designed to protect witness rights during such proceedings.
