A financial audit conducted by PricewaterhouseCoopers (PwC) into the 2024 accounts of the Electricity Company of Ghana (ECG) has uncovered significant financial discrepancies, raising concerns over potential mismanagement, inefficiencies, and breaches of financial regulations.
The findings, which have sent shockwaves through Ghana’s power sector, point to irregularities in revenue declarations and payments, highlighting the urgent need for increased oversight and reforms within the country’s electricity distribution system.
According to the audit report, a vendor contracted by ECG to facilitate and harmonize its revenue collection processes received an astonishing GH¢400 million in commissions. The revelation has raised questions about the transparency of ECG’s financial transactions and the appropriateness of such an exorbitant commission at a time when the company is struggling with mounting debts and operational challenges.
Even more concerning, the PwC audit found that ECG underreported its revenue by GH¢5.3 billion, a discrepancy that could have serious implications for the financial health of the power sector. This substantial revenue shortfall has fueled speculation about systemic inefficiencies and potential corruption within ECG, further eroding public confidence in the management of Ghana’s electricity distribution network.
These revelations come at a critical juncture for the country’s power sector, which has long faced financial instability, debt accumulation, and growing concerns over electricity supply sustainability. With Independent Power Producers (IPPs) and other stakeholders frequently raising alarms over delayed payments and the threat of power supply disruptions, the findings of this audit add another layer of complexity to Ghana’s ongoing energy crisis.
The report highlights that the GH¢400 million payment to the vendor was made before ECG officially declared its revenue collections under the Cash Waterfall Mechanism (CWM). This practice directly contradicts established financial transparency and accountability standards, as the CWM was specifically designed to ensure an equitable distribution of revenue among key power sector players, including the Volta River Authority (VRA), Bui Power Authority, Independent Power Producers (IPPs), and fuel suppliers.
Introduced as a financial framework to streamline payments and ensure fairness in revenue distribution, the CWM was meant to prevent a scenario where one entity disproportionately benefits at the expense of others. However, the PwC audit suggests that ECG bypassed these guidelines by prioritizing payments to a private vendor over power generation companies, raising concerns about possible financial misconduct.
Industry experts have described the audit’s findings as deeply troubling, emphasizing the urgent need for ECG to provide a clear explanation of the circumstances surrounding these irregularities. A financial analyst speaking on condition of anonymity noted that the scale of the underreported revenue and questionable payments raises critical questions about internal controls within ECG.
“How does a state-owned enterprise underreport GH¢5.3 billion in revenue? How does a vendor collect GH¢400 million in commissions ahead of power producers who are responsible for generating the electricity that keeps the country running? These are serious questions that require urgent answers,” the analyst stated.
The findings of the PwC audit have also sparked reactions from civil society organizations and governance watchdogs, many of whom have called for an independent investigation into the matter. Anti-corruption advocate and policy analyst, Bright Asare, stressed that the issue goes beyond financial mismanagement and could point to a deeper culture of systemic inefficiency and possible collusion within the power sector.
“This audit reveals a disturbing pattern that cannot be ignored. If ECG is diverting funds in ways that are not transparent, it undermines the entire electricity value chain. It means suppliers are not getting paid on time, which can lead to power shortages and increased tariffs for consumers. There must be accountability,” Asare stated.
The Energy Ministry and the Public Utilities Regulatory Commission (PURC) are expected to take a keen interest in these developments, with calls mounting for ECG’s leadership to be held accountable for the discrepancies. Parliament’s Committee on Mines and Energy has also signaled its intention to summon ECG officials to explain the findings of the audit, with some members pushing for a full forensic investigation into the company’s financial dealings.
While ECG has yet to issue an official response to the PwC audit, sources within the company suggest that an internal review has been initiated to assess the allegations and determine the next course of action. A senior official at ECG, speaking on condition of anonymity, acknowledged the concerns raised but insisted that the company remains committed to financial transparency.
“We understand the gravity of the audit’s findings, and the management is carefully reviewing the report. ECG operates within a complex financial environment, and while some of these figures may appear alarming, we believe a thorough internal review will provide a clearer picture,” the official stated.
The controversy surrounding ECG’s finances comes at a time when Ghana’s energy sector is under intense scrutiny. With the country grappling with persistent power outages, rising electricity tariffs, and a growing debt burden owed to Independent Power Producers, the need for financial prudence has never been greater.
Some analysts believe that the revelations from the PwC audit could have far-reaching consequences for ECG, including potential leadership changes and a reassessment of the company’s financial management systems. There is also speculation that the government may be forced to intervene to restore confidence in the utility provider’s operations.
As the dust settles on this explosive audit report, the focus now shifts to what actions regulatory authorities will take to address the concerns raised. Stakeholders in the power sector are urging swift and decisive measures to ensure that the discrepancies identified in the audit do not translate into further instability in electricity supply and pricing.
Ghanaians will be watching closely as the government and relevant institutions respond to these allegations. With the power sector already under significant financial strain, transparency and accountability will be critical in ensuring that ECG operates in a manner that serves the best interests of the nation. The coming weeks will determine whether this audit serves as a wake-up call for much-needed reforms or whether it becomes yet another case of financial irregularities going unaddressed.
