ACCRA, Sept 29 (The African Portal) – Ghana’s state-run Electricity Company of Ghana (ECG) has cancelled contracts with more than 200 service providers after an internal audit found widespread underperformance and inefficiencies, freeing the utility from potential liabilities of over $227 million.
The move is part of a wider clean-up of procurement and contract management at ECG, which supplies most of the country’s electricity, officials said.
“We realised there were some weak enforcements in the company’s procurement processes. There were underperforming contracts creating inefficiencies and adverse financial exposure,” ECG’s General Manager for External Communications, Charles Nii Ayiku Ayiku, told the Daily Graphic.
He said the reforms included stricter procurement rules, competitive tendering, and enterprise resource planning systems to curb wasteful spending. “If we don’t need it, we would not procure it,” he added.
Cancelled contracts
The cancelled contracts were part of 347 that underwent a management audit. ECG also renegotiated its agreement with technology provider Hubtel, cutting its commission on electronic bill processing from 3% to 1.65%.
The utility, long criticised for financial leakages and weak oversight, reported its highest-ever monthly revenue in July, collecting 1.74 billion cedis ($123 million), Ayiku said.
The company has also traced thousands of shipping containers containing its equipment that had been unaccounted for at Ghana’s ports. “Out of 2,500 containers, 33 were not immediately identified on the ground, and the partners are currently tracing the remaining,” Ayiku said, adding that 1,000 had already been moved to ECG warehouses.
Despite funding constraints, he said ECG would continue to comply with Ghana’s “cash waterfall” allocation mechanism, which shares revenue among power sector players, while working to strengthen financial controls.
“The solution was to introduce new reforms, employ and tighten the company’s procurement processes through contract rationalisation,” Ayiku said.
This story was written with additional files from Daily Graphic, Ghana.
