The Electricity Company of Ghana (ECG) has been indicted by the Auditor-General for spending a staggering $30.7 million ($30,730,260) on equipment that could have cost $13.6 million ($13,637,983) if purchased directly from the original manufacturers.
This procurement decision led to an avoidable loss of over $17 million ($17,092,277) to the state-owned utility provider.
This revelation is contained in the 2024 Auditor-General’s Report on the Public Accounts of Ghana: Public Boards, Corporations and Other Statutory Institutions for the Period Ended 31 December 2024.
Procurement through local suppliers inflates costs
The audit report states clearly that ECG awarded contracts to local suppliers instead of procuring directly from the manufacturers.
Despite the inflated payments, bills of lading from the original manufacturers listed ECG as the consignee, meaning ECG was the entity responsible for clearing the goods at the ports and paying duties and demurrage charges — a responsibility it would have borne even if it had purchased the goods directly at the lower cost.
This arrangement, the Auditor-General stressed, offered no added value from the intermediaries, yet led to a cost escalation of over 125%.
Deal directly and sanction offenders
The Auditor-General has strongly recommended that ECG management desist from splitting procurement orders among local suppliers and instead engage directly with manufacturers — both local and foreign — to safeguard public funds.
Furthermore, the report calls for the sanctioning of ECG officials whose actions or inactions resulted in this infraction, by Section 92 of the Public Procurement Act, 2003 (Act 663), as amended.
This provision empowers authorities to punish public officials who engage in procurement malpractices that cause financial loss to the state.
In response to the audit, ECG Management acknowledged the issue and indicated they would consider the recommendation to procure directly from foreign manufacturers going forward.
Legal backing for accountability
The report also cited Section 52 of the Public Financial Management Act, 2016 (Act 921), which mandates principal spending officers of state-owned enterprises to protect and manage the assets of their institutions.
The law requires them to establish preventive mechanisms to eliminate theft, loss, wastage, and misuse of assets.
By allowing inflated procurements and inefficient procurement methods, the Auditor-General suggests that ECG management may have violated these statutory obligations, further deepening concerns about financial stewardship and procurement discipline within the utility company.
Broader sector concerns
This latest infraction adds to growing public concern about procurement malpractices and wasteful spending in Ghana’s energy sector.
ECG, already under scrutiny for underreported revenues and irregular disbursements under the Cash Waterfall Mechanism, now faces renewed calls for transparency, accountability, and procurement reform.
