Ghana’s energy sector remains one of the key sectors of the economy that is putting pressure on the West African nation’s public spending, 2024 Auditor-General’s Report has revealed.
The 2024 Auditor-General’s report revealed a whopping GH¢15.8 billion, representing 86% of all public spending on irregularities, which originated from institutions under the Ministry of Energy.
These irregularities across public boards and statutory bodies amounted to GH¢18.4 billion, and it has doubled from the figure in the 2023 report.
The rate of irregularities shows systemic failures, specifically in revenue reporting, procurement, debt recovery, and contract compliance in the energy sector ecosystem.
At the nerve-centre of this is the Electricity Company of Ghana (ECG), where financial misreporting and weak internal controls resulted in most of the most critical irregularities.
In 2023, ECG underestimated over GH¢2.95 billion in revenue.
Rather than reporting the actual collection of GH¢11.59 billion, the company disclosed only GH¢8.64 billion to the Ministry of Energy and other related authorities.
The worst of ECG’s bad acts was its refusal to disburse GH¢1.29 billion in collected revenue to state-owned enterprises and Independent Power Producers (IPPs) under the Cash Waterfall Mechanism.
These infractions were pointed out by the Auditor-General as misleading and unjustified, representing major infractions of public trust and financial transparency
cover-up, and also refusal by the company to remit GH¢70.9 million in taxes to the Ghana Revenue Authority (GRA).
Besides, the company’s procurement practices were wrongly founded.
Rather than procuring directly from manufacturers, ECG purchased materials through middle-men increasing operational cost to over GH¢251 million and also paid GH¢75 million to Hubtel Limited for a digital payment platform minus legally binding contracts.
The audit also revealed that Hubtel collected over GH¢10.3 billion in revenue for ECG and took 1.5% commission before depositing the remainder, which is an infringement on the public financial regulations that demand gross collections to be accounted for before deductions.
The contract became effective in March 2024 but made operational retrospectively from January 2023, and it was promulgated without proper procurement clearance from the Public Procurement Authority.
Source: https://energynewsafrica.com
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