The Electricity Company of Ghana (ECG) is facing backlash for operating 84 bank accounts across 20 different banks, a practice that contravenes directives under Ghana’s International Monetary Fund (IMF)-supported programme. The programme mandates the consolidation of all revenue collections and disbursements into a single account to enhance financial transparency and streamline operations.
An audit by PricewaterhouseCoopers (PwC) revealed that ECG’s decentralized financial management undermines this key reform measure.
“We observed through our validation procedures that ECG operates multiple bank accounts (84 accounts) with 20 different banks. This scattered approach to banking is inconsistent with the directive to centralize all financial activities under a single collection account,” PwC stated in its report.
The audit recommended that ECG consolidate its financial operations by partnering with a single bank that offers a nationwide branch network. Such a move, PwC noted, would reduce inefficiencies, enhance transparency, and simplify revenue and disbursement processes.
Payment Delays and Sectoral Disruptions
In addition to its banking practices, the audit raised concerns about ECG’s failure to adhere to payment schedules under the Cash Waterfall Mechanism (CWM). The guidelines require ECG to make payments to Independent Power Producers (IPPs) and regulatory bodies by the 22nd of each month, a deadline the company has frequently missed.
“Untimely payments to IPPs and regulatory bodies have led to delays and disruptions in the energy sector, undermining the smooth operation of Ghana’s power distribution system,” the report stated.
The report warned that such breaches of contractual obligations could further strain Ghana’s energy sector and destabilize power distribution if immediate reforms are not implemented.
PwC’s findings indicate the need for urgent reforms in ECG’s financial management practices to align with IMF directives. These changes are critical to ensuring efficient and transparent management of resources vital to the stability and growth of Ghana’s energy sector.
