ECG violating IMF directives with 84 accounts across 20 banks – Audit report

The Electricity Company of Ghana (ECG) is facing criticism for maintaining about 84 bank accounts across 20 different banks, despite directives under Ghana’s International Monetary Fund (IMF)-supported program to consolidate all revenue collections and disbursements into a single account.

An audit by PricewaterhouseCoopers (PwC) found that ECG’s financial management practices directly contravene this key guideline, which was implemented to streamline operations and enhance financial transparency.

“We observed through our validation procedures that ECG operates multiple bank accounts (84 accounts) with 20 different banks. This scattered approach to banking is inconsistent with the directive to centralize all financial activities under a single collection account,” the PwC audit stated.

PwC recommended that ECG consider consolidating its financial operations by partnering with a single bank that has an extensive nationwide branch network.

This move, according to the auditors, would reduce the need for multiple accounts, streamline operations, and improve transparency in revenue and disbursement processes.

The audit also raised serious concerns about ECG’s payment practices, revealing that the company has failed to make timely payments to Independent Power Producers (IPPs) and regulatory bodies.

Under the Cash Waterfall Mechanism (CWM) guidelines, ECG is required to make payments by the 22nd of each month, a commitment the company has frequently missed.

“Untimely payments to IPPs and regulatory bodies have led to delays and disruptions in the energy sector, undermining the smooth operation of Ghana’s power distribution system,” the report warned.

This breach of contractual obligations exacerbates financial constraints within the energy sector and could further destabilise the power distribution system in Ghana if not addressed promptly.

The findings underscore the urgent need for reforms in ECG’s financial practices to align with IMF directives and ensure efficient and transparent management of resources critical to Ghana’s energy sector.