The energy sector has come under intense scrutiny following the release of the 2024 Auditor-General’s Report, which reveals that state institutions within the Ministry of Energy were responsible for GH¢15.8 billion out of the total GH¢18.4 billion in financial irregularities recorded across the public sector representing 86% of the total.
The report highlights a sharp surge in public sector irregularities, with the 2024 figure more than doubling the GH¢8.8 billion recorded the previous year. According to the Auditor-General, systemic lapses, weak financial controls, and non-compliance with regulations are at the heart of the ballooning losses.
ECG Tops the List of Offenders
The Electricity Company of Ghana (ECG) is singled out as the most significant contributor to the sector’s financial infractions. The utility firm is accused of underreporting revenue by GH¢2.95 billion in 2023, declaring GH¢8.64 billion after collecting GH¢11.59 billion. This discrepancy, the report notes, misled key oversight bodies and distorted the government’s fiscal planning.
ECG also failed to transfer GH¢1.29 billion to other stakeholders in the electricity value chain, including State-Owned Enterprises and Independent Power Producers (IPPs), as required under the Cash Waterfall Mechanism. The report condemned these actions as “misleading and unjustified,” adding that they undermined public accountability.
Additional issues at ECG include:
- GH¢70.9 million in tax withholdings not remitted to the Ghana Revenue Authority (GRA).
- Procurement inefficiencies leading to an avoidable GH¢251 million expense due to purchasing materials through third parties.
- Payment of GH¢75 million to Hubtel Limited for a digital revenue platform without a valid contract.
Auditors further uncovered that Hubtel, after collecting GH¢10.3 billion on ECG’s behalf, deducted its commission before depositing funds, contrary to public finance rules. More troubling was the fact that the contract with Hubtel was signed in March 2024 but backdated to January 2023 without the necessary approval from the Public Procurement Authority (PPA).
BOST, GNPC, GRIDCo Also Flagged
The Bulk Oil Storage and Transportation Company (BOST) was cited for sidestepping the Ghana Electronic Procurement System (GHANEPS) in its procurement processes. Infrastructure concerns were also noted, particularly encroachment on the Bolgatanga-Buipe pipeline. Millions of cedis in idle equipment were found across BOST depots, and key projects worth over US$2 million and GH¢23.5 million faced significant delays.
At the Ghana National Petroleum Corporation (GNPC), auditors raised red flags over:
- A US$6.3 million property purchase in Tema without proper land title documentation.
- Entering into a loan arrangement on behalf of the Finance Ministry without documentation.
- Continuing to release unverified reports on oil and gas reserves.
The report also highlighted issues at the Ghana Grid Company (GRIDCo), including the absence of an Environmental, Social, and Governance (ESG) framework, despite the company’s exposure to high operational risks.
The Energy Commission was cited over a GH¢120,378 misallocation from the Energy Fund that remains unresolved.Broader Concerns and Call for Reform
Beyond these entities, financial control failures and compliance breaches were noted across several other institutions, including the National Petroleum Authority (NPA) and the Unified Petroleum Price Fund (UPPF). Most infractions were linked to weak documentation practices and disregard for procurement laws.
The Auditor-General estimates that GH¢15.6 billion of the irregularities could be recovered classified as debts, receivables, or misapplied funds while GH¢2.8 billion represents procedural breaches.
As Ghana continues to pursue a fiscal consolidation programme under the International Monetary Fund (IMF), the findings raise critical concerns about governance and financial discipline in the energy sector. The Auditor-General has recommended the enforcement of procurement and financial laws, sanctions against offending officials, and urgent structural reforms to restore integrity and accountability.