The Auditor-General has indicted the Electricity Company of Ghana (ECG) for paying a total of GH¢75 million in service fees to Hubtel Limited in 2022 without providing any signed contract agreement to support the engagement of the service provider.
This revelation is detailed in the Report of the Auditor-General on the Public Accounts of Ghana: Public Boards, Corporations and Other Statutory Institutions for the Period Ended 31 December 2024.
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Despite the significant payment to Hubtel for revenue collection services, ECG Management failed to furnish the Auditor-General’s team with a written agreement to confirm the legal basis for the transaction.
The absence of a documented contract casts doubts over the legitimacy of the payment.
Procurement irregularities in five-year agreement
The audit further disclosed that ECG eventually signed a five-year agreement with Hubtel Limited on March 20, 2024, retroactively effective from 1 January 2023, for the provision of a Digital Payment Platform Service.
The contract granted Hubtel a 1.5% commission on every processed transaction.
However, the engagement was conducted using single-source procurement without the mandatory approval of the Board of the Public Procurement Authority (PPA), in breach of Ghana’s procurement laws.
The Auditor-General has therefore recommended that ECG Management adhere strictly to the Procurement Act in all procurement-related activities.
It also called for sanctions against the Chief Executive Officer and the Finance Director of ECG under Section 92 of the Public Procurement Act, 2003 (Act 663), as amended, for their roles in the irregular engagement.
GH¢148m commissions on GH¢10.3bn collected
According to the audit report, Hubtel Limited collected a total of GH¢10,344,056,338.64 in revenue for ECG during the 2023 financial year.
From this amount, Hubtel deducted a commission of GH¢148.9 million (GH¢148,908,900.29) before depositing the remaining GH¢10.1 billion (GH¢10,195,147,438.35) into ECG’s bank accounts.
GH¢101m legacy debt questioned
The report also cited a clause in the ECG-Hubtel agreement dated 20 March 2024, which stated that ECG owed Hubtel a total of GH¢101 million (GH¢101,105,243.98) in service fees for transactions processed between 1 November 2022 and 31 December 2023.
However, ECG Management was unable to provide the transaction details or justification for the purported debt, prompting the Auditor-General to recommend the disallowance of the GH¢101 million claim.
According to the report, the basis for the service fees and how the figure was arrived at remains unsubstantiated.
The Auditor-General expressed concern that the payment of commissions was made before revenue collections were deposited into ECG’s accounts, undermining transparency and accountability.
It recommended that all revenue collections be deposited in gross into designated bank accounts before any commissions are paid to service providers.
Additionally, the Auditor-General directed that Hubtel should submit monthly billing statements detailing fees charged to ensure a clear audit trail of the revenue collected.
Auditor-General calls for accountability
In light of the serious findings, the Auditor-General has called for disciplinary action against all ECG officials involved in the procurement violations and lack of due diligence.
