Executive Director at the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, has expressed the need for the Electricity Company of Ghana (ECG) to be transparent and accountable in its revenue collection to limit dependence on government.
According to him, experts within the sector have doubts about claims of ECG insisting it is making more money and raising a lot of money from tariffs. He revealed that when compared to available data, payments of monies do not reflect in the value chain, despite tariffs being adjusted by 100%.
“So, where is all that money that we cannot see accounted for in the cash waterfall mechanism? Two things are at play, either ECG is collecting the money and using it the way it wants or they are not actually collecting as they are telling us…
“Transparency and accountability is required more than ever for us to be able to limit the dependence of the power sector on government budget. We can’t tarry any longer on those conversations but to make sure we are delivering.”
Benjamin Boakye
Justifying his stance, Mr Boakye revealed that even with business as usual, what it means is that if ECG was collecting GHC500 million, it should currently be collecting GHC1 billion today by “doing nothing”. He emphasized that the power distribution company should be doubling its revenue at this point and not the reverse.
“… But we are at the same time seeing payments to the value chain is rather dwindling and we ask ourselves how do we reconcile that data or the communication that is being churned out that ECG is doing better, it’s collecting more revenues and yet, the value chain is not getting paid.”
Benjamin Boakye
Furthermore, Mr Boakye noted that even in 2021 when some stakeholders felt payments were bizarre and high for government, ECG was doing about 50% of revenue requirement. With this, he explained that for the “invoices in the sector, ECG could do 50% and government has to look for the 50%”.
“But you look at the cash waterfall payment for March and April and the payments to the value chain was about 11.2% and so you ask yourself where is the money that is being collected. Even beyond the regular revenues that they are getting from the tariffs, ECG tells us that the debt that is old debt has been collected to the tune of GHC3.1 billion.”
Benjamin Boakye
Cash waterfall mechanism
Moreover, the executive director of ACEP underscored that ECG is moving away from the cash waterfall mechanism which is supposed to introduce that transparency and “sunshine” around how much is collected and who is getting paid in the value chain.
He revealed that in the March and April data, ECG told the cash waterfall committee that it collected GHC1.1 billion and out of the GHC1.1 billion due the cash waterfall mechanism, it used GHC540 million on their own to buy crude oil for some power plants because there was imminent gas shortfall.
“But gas was being produced by some consumers that were not getting money from the same power sold and revenue collected. But ECG used discretion, no recourse to the cash waterfall mechanism and spent the GHC540 million. So, what they had to account for the cash waterfall mechanism was GHC420 million.
“Even out of the GHC420 million that they are accounted for in the cash waterfall mechanism, they then decide that on their own they will use GHC250 million for their expenses and the rest is then left to be shared to the rest of the value chain.”
Benjamin Boakye
Mr Boakye highlighted that unilateral decisions taken by ECG are being entertained and it’s incredible to hear the data churned out. He stated that the gas that is being used to produce the power is not being paid for.
“The ECG meets its own, about 78% of its revenue requirement from the GHC420 million beyond what ECG is not accounting for. So, we need much more rigorous data on how collection is happening [and] where that revenue is going…”
Benjamin Boakye
READ ALSO: I’m Against Electing MMDCEs On Partisan Basis- Nii Lantey Vanderpuye
