It is a clear case of taxing more to save a leaking sector as the 2024 Auditor-General’s Report has revealed that Ghana’s Energy Sector accounted for a whopping 86% of all financial irregularities recorded last year.
The latest report of the Auditor-General spanning the year 2024 reveals that total financial irregularities amounted to GH¢18.4 billion. Sadly, this figure is not an improvement over the previous year’s performance but rather the worst form.
The 2024 figure is more than double of the irregularities recorded in 2023, which amounted to GH¢8.79 billion. This means the 2024 irregularities represent an increment of 109% of the 2023 performance.
A more sad development is that, out of the 2024 irregularity amount, GH¢15.8 billion were recorded in just the energy sector alone, marking 86% of all the irregularities combined. This figure recorded in the energy sector alone in 2024 is almost twice the total financial irregularities recorded in 2023 across all sectors.
This report is coming at a time when Ghanaians are being asked to pay an additional GH¢1 per litre on fuel to “rescue” the energy sector.
A Sector of Black Holes
The report reveals systemic rot from misreported revenues, unpaid debts, tax defaults, to shady procurement deals across agencies like ECG, BOST, GNPC, and GRIDCo.
For instance, Electricity Company of Ghana (ECG) alone under-declared over GH¢2.95 billion in revenue, failed to remit over GH¢1.29 billion to state agencies and IPPs, and paid GH¢75 million to a vendor without a contract. In addition, it also failed to remit GH¢70.9 million in taxes to the Ghana Revenue Authority (GRA).
Hubtel: Hidden Contracts
Even more ironic, the digital platform collecting ECG revenue, Hubtel, according to the Auditor-General’s report had no valid contract until March 2024.
However, Hubtel deducted a commission of 1.5% from the GH¢10 billion revenues it collected before remitting the remaining to ECG. The contract was backdated and sidestepped procurement clearance, all in contravention to the Public Procurement Management Act.
Ghost Projects & Growing Debts
From Bui Power’s US$729 million uncollected debts to GNPC’s undocumented loans and unsafeguarded properties, the audit outlines a network of institutions either unable or unwilling to account for public funds.
GRIDCo lacks an ESG policy, BOST is bypassing e-procurement rules, and GNPC still publishes unverified oil reserves.
The GH¢1 Question
So as Ghanaians line up at pumps, paying the new GH¢1 Energy Sector Recovery Levy, one must ask: are we plugging a fiscal hole, or just pouring money into a sieve? With a 109% jump in financial irregularities within a year, and GH¢15.6 billion of misapplied or recoverable funds within the energy space, is the GH¢ 1 per litre energy sector levy justified?
Drastic Reforms Needed, Not More Levies
The Auditor-General is calling for urgent reforms, sanctions, and strict law enforcement. But until real accountability kicks in, the energy sector will continue to leak funds. It is imperative that a successful plugging of these holes will mean that Ghanaians will not have to pay more taxes.
For now, the focus should be on plugging the holes and not asking Ghanaians to pay more.
