Ghana’s Auditor-General has flagged a series of troubling financial and procurement practices at the Electricity Company of Ghana (ECG), revealing significant overspending, unauthorised payments, and questionable contractual arrangements that raise fresh concerns about accountability and governance in state-owned enterprises.
In its latest audit report, the Auditor-General found that ECG exceeded its 2023 budget on 13 key expenditure items by more than 130%, spending a total of GH₵334 million against a planned GH₵145 million.
“Notable overruns include spending 91 million on foreign training instead of the budgeted 32 million, and 49 million on stakeholder expenses instead of 3 million, all done without board approval.”
Auditor General
According to the report, in defence, ECG’s management attributed the overspending to inflationary pressures, but this explanation falls short, particularly in the context of such wide margins and the lack of board oversight.
ECG’s Dealing with Hubtel
More worrying is ECG’s financial dealings with Hubtel, a private firm contracted to collect revenue on behalf of the company. The audit revealed that ECG paid Hubtel a staggering GH₵75 million without any formal written contract in place during the time of payment.
This lack of documentation meant auditors were unable to verify the legal basis of the transaction or determine whether ECG had received commensurate value for the money disbursed.
Even more perplexing is the structure of the payments to Hubtel. According to ECG, Hubtel’s commission was set at 0.95% of total revenue collected. However, the auditors found that Hubtel had in fact been receiving 1.5%, raising questions about transparency and potential revenue losses.
This discrepancy, while seemingly small in percentage terms, could represent millions of cedis in diverted funds when scaled across the company’s nationwide collections.
According to the report, in March 2024, ECG finally formalised its relationship with Hubtel through a signed contract. Yet, even then, ECG moved to pay an additional GH₵101 million to the company, ostensibly as compensation for services rendered before the contract’s effective date.
The Auditor-General firmly objected to this retroactive payment, noting that it lacked legal grounding, especially since substantial payments had already been made prior to the contract.
The audit report also highlighted previously discussed issues of under-declared revenue by ECG, which have prompted wider discussions about inefficiencies and accountability in state-owned utilities.
Calls to End Structural Problems
Reacting to the findings, policy analyst Alfred Appiah stressed that the situation at ECG reflects a broader structural problem across Ghana’s state-owned enterprises (SOEs).
“State enterprises are owned by Ghanaians. They conduct business on behalf of the state, and when they make losses—as is the case for many—Ghanaians are the ones who bear the cost through taxes or levies”.
Alfred Appiah
He cited the imminent introduction of a new petroleum levy, intended to cover liabilities created by a mismanaged power sector, as an example of how poor corporate governance directly burdens citizens.
“We keep hearing about procurement infractions at state enterprises, yet these same entities are often quick to claim exemptions from public procurement laws. If you’re conducting business on behalf of the state, you should be subject to public procurement rules.
“It’s the state that’s giving you the authority to collect revenues from electricity tariffs. If your procurement processes are clean, why resist additional oversight?”
Alfred Appiah
He emphasised that reforming the procurement systems of SOEs should be a priority in Ghana’s broader public sector reform efforts, especially given their enormous fiscal footprint.
“The combined budget of SOEs is twice the size of the central government’s entire budget. We should be aggressively looking for efficiencies there, and their procurement practices would be a great place to start.”
Alfred Appiah
The Auditor-General’s report has reignited calls for stronger regulatory oversight, greater transparency, and improved financial discipline within Ghana’s state enterprises.
With ECG at the centre of yet another scandal involving questionable spending and governance failures, Alfred Appiah urged policymakers and public watchdogs to act decisively.
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