A damning audit has revealed that Ghana's main electricity distributor spent GHS 136 million ($10.4 million) on emergency fuel purchases in just three months, spotlighting deep-rooted financial challenges facing the country's energy sector as a new administration takes power.
The audit, conducted by PricewaterhouseCoopers (PwC) and released this week, found that the Electricity Company of Ghana (ECG) made these unbudgeted purchases between October and December 2023, with only GHS 18.2 million officially declared through proper channels. "These emergency purchases often result in premium pricing, further straining ECG's limited resources," the audit states, highlighting a pattern of financial mismanagement that threatens Ghana's power stability.
Stratcon emergency fuel payments by ECG, PwC Audit Report The report attributes ECG's reliance on emergency fuel purchases to inadequate planning and insufficient inventory management. While these expenditures were deemed necessary to avert power outages, they diverted crucial funds from other obligations, including payments to independent power producers (IPPs).
Key issues highlighted in the report include: Lack of clear procurement guidelines: ECG's emergency procurement processes lack standardisation and transparency, increasing the risk of inefficiencies and financial mismanagement.
