SCANDAL IN THE ENERGY SECTOR: GH¢8.8 BILLION HOLE EXPOSED

ECG and GNPC Flout Rules, Fueling Ghana’s Fiscal Crisis. A Call for Surcharge and Prosecution

By Adam Ibrahim

The 2023 Auditor-General's Report on Public Boards, Corporations, and Other Statutory Institutions is a stark warning to the nation, revealing systemic corruption and gross negligence within state enterprises. While the total irregularities across all public boards amounted to a staggering GH¢8.8 billion, the bulk of the most egregious breaches were concentrated in the energy sector, specifically the Electricity Company of Ghana (ECG) and the Ghana National Petroleum Corporation (GNPC).

The findings are not merely procedural lapses; they represent a deliberate subversion of financial laws, demanding immediate and rigorous forensic investigation to trigger the Auditor-General’s power of disallowance and surcharge.

         1. ECG: The Procurement Chaos and Metering Mess

The Electricity Company of Ghana, responsible for power distribution, is flagged for alarming non-compliance with the Public Procurement Act (Act 663). The audit evidence suggests a dangerous disregard for competitive bidding, leading to massive financial risk and a lack of value for the Ghanaian taxpayer.

The Single-Sourcing Surge

The most damning finding is the explosion of single-source contracts. ECG reportedly bypassed legal guidelines, using an unapproved internal manual, and:

  • Awarded 512 contracts through single-sourcing in 2023.

  • This colossal number represents a staggering 72.83% of all contracts awarded by the company that year.

This unprecedented reliance on single-sourcing, often without required regulatory approval, is a major red flag for contract inflation and influence-peddling. A forensic audit must trace the beneficiaries of these 512 contracts to determine if undue financial advantage was secured at the expense of the state.

The $145 Million Value-for-Money Failure

The report also highlighted that high-value procurement lacked basic financial prudence. ECG was found to have awarded contracts worth over US$145 million for more than 800,000 meters and accessories without properly seeking value for money from the market. This systemic failure in the procurement of essential meters contributes directly to two major national problems:

  1. High commercial losses due to collection issues and meter shortages.

  2. The eventual burden of inflated costs being passed on to the consumer through tariffs.

DEMAND FOR INVESTIGATION: The Head of Procurement and the Board of ECG must be held accountable for actively circumventing the Public Procurement Act, a clear legal mandate designed to protect public funds.

           2. GNPC: Misapplied Funds and Stalled Projects

As the custodian of the nation’s petroleum resources, the Ghana National Petroleum Corporation is mandated to use its share of oil revenue strictly in line with Parliamentary approval. The audit, however, exposes a worrying trend of prioritization of unapproved projects over critical national assignments.

GH¢4.9 Million Paid for Unapproved Project

The GNPC was found to have paid GH¢4.9 million for a project—specifically cited as the Royal Golf Club House—that did not have Parliamentary approval. Compounding this breach, the report noted that this unapproved project was progressing while several other projects that had received explicit Parliamentary endorsement had stalled due to a lack of funding.

This finding suggests a willful misapplication of petroleum revenue, where the corporation substituted its own priorities for those mandated by the Legislature.

Wasted Investment in Dilapidated Projects

Furthermore, GNPC’s subsidiary, the GNPC Foundation, was flagged for a substantial waste of funds:

  • Approximately GH¢2 million was spent on Corporate Social Investment (CSI) projects that have since been left to deteriorate because crucial ancillary facilities needed for them to be functional were not provided.

This demonstrates a failure in basic project planning, resulting in the total loss of the invested capital.

DEMAND FOR INVESTIGATION: A focused inquiry must be conducted to determine who authorized the GH¢4.9 million payment for the unapproved project and why the responsible GNPC officials were not immediately sanctioned for breaching the Public Financial Management framework. Project consultants and managers responsible for the GH¢2 million wastage must also be identified and penalized.

         Conclusion: Accountability Must Be Enforced

The 2023 Auditor-General's report provides all the necessary evidence for decisive action. The vast majority of the GH¢8.8 billion in irregularities is recorded as "recoverable."

To prevent these colossal sums from becoming a perennial feature of Ghana’s public accounts, Parliament's Public Accounts Committee (PAC) and the Office of the Auditor-General must do more than just issue recommendations. They must enforce the Disallowance and Surcharge provisions to compel the officers of ECG and GNPC responsible for these breaches to personally refund the state's losses.

Failure to act decisively will signal that fiscal impunity in the highest echelons of state enterprises remains the status quo, further jeopardizing Ghana's economic stability.

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