The Electricity Company of Ghana (ECG) has come under intense scrutiny after the Auditor-General’s 2024 report uncovered a massive financial discrepancy involving billions of cedis meant for the country’s power producers.
According to the report, ECG failed to remit a staggering GH¢4.2 billion (GH¢4,245,586,079.19) to State-Owned Enterprises (SOEs) and Independent Power Producers (IPPs) under the Cash Waterfall Mechanism (CWM)—a critical system created to ensure fair and transparent allocation of revenue across the power sector.
Over GH¢11.5 Billion Collected, But Only GH¢8.6 Billion Declared
The Auditor-General revealed that ECG collected GH¢11.5 billion (GH¢11,591,174,225.48) in total revenue in 2023. Shockingly, the utility giant only declared GH¢8.6 billion (GH¢8,637,759,625.94) to the Ministry of Energy and other stakeholders, effectively underreporting GH¢2.9 billion (GH¢2,953,414,599.54).
Of the declared amount, ECG disbursed GH¢7.3 billion (GH¢7,345,588,146.29) to various beneficiaries through the CWM. This left an unaccounted balance of GH¢1.2 billion (GH¢1,292,171,479.65) sitting undistributed.
“The Managing Director of ECG should be held liable to account for the unremitted GH¢1.2 billion balance,” it stated.
In a damning recommendation, the Auditor-General urged that ECG’s Managing Director be personally held responsible for the missing disbursement. The report also recommended that “the Chief Executive Officer and the Finance Director be held accountable for the GH¢2.9 billion in underreported revenue.”
Undermining the Power Sector’s Stability
The CWM was instituted to stabilise Ghana’s power sector by ensuring predictable and timely payments to suppliers. ECG’s actions, however, have cast serious doubts on its financial stewardship. The report warned that “ECG’s actions undermine the financial integrity of the power sector, particularly the Cash Waterfall Mechanism, which was instituted to improve transparency and predictability in payments to power suppliers.”
These discrepancies not only damage public trust but also threaten the operational health of the power sector. With GH¢4.2 billion withheld, the financial strain on IPPs and SOEs could deepen existing liquidity crises, delay generation and maintenance activities, and disrupt electricity supply to homes and businesses.
Call for Immediate Action
As the country grapples with ongoing power supply challenges, the Auditor-General’s findings raise alarm bells over ECG’s revenue management practices. The report calls for “immediate corrective actions and strong enforcement of accountability measures.”
The revelations come at a time when government is under pressure to strengthen financial oversight and eliminate leakages within the energy sector. Ghanaians now await a formal response from the Ministry of Energy, ECG’s Board, and other regulatory bodies as the public demands full accountability for the missing billions.
