The Electricity Company of Ghana (ECG) suffered a GH¢10.21 billion loss in 2022, worse than the GH¢1.91 billion recorded in 2021.
It represents more than 433 per cent loss in 2022 due largely to exchange rate losses resulting from the cedi depreciation and increased cost of distributing power to consumers.
This came at a time when some consumers across the country complained of intermittent power supply which led many of them to endure prolonged periods of darkness and disruption in their daily lives.
The power distributor’s losses were captured in the latest Auditor General’s Report on the account of public boards, corporations and other statutory institutions in 2023.
For the period under review, ECG’s income increased by 24.1 per cent to GH¢15.03 billion in 2022 from GH¢12.10 billion in 2021, largely due to the increased internally generated funds and government grants.
The grants were payments made to power-producing companies by the government on behalf of the power distributor.
Its total expenditure increased significantly by 80 per cent to GH¢25.23 billion in 2022 from GH¢14.02 billion in 2021, mainly as a result of the increases in direct cost and foreign exchange losses.
The increase in direct cost was primarily attributed to increases in the cost of power purchased and transmission cost.
Non-current assets improved by 45.6 per cent to GH¢32.71 billion in 2022 from GH¢22.46 billion in 2021, and this was due to revaluation and additional procurement of property, plant and equipment.
Current assets also increased by 23.1 per cent to GH¢10.14 billion in 2022 from GH¢8.24 billion in 2021 owing to an increase in trade and other receivables.
The company’s liabilities increased by 66.3 per cent to GH¢29.43 billion in 2022 from GH¢17.69 billion in 2021 and this was attributed to an increase in trade and other payables. Non-current liabilities increased by 16.4 per cent to GH¢6.37 billion in 2022 from GH¢5.47 billion in 2021.
The report indicated that the current ratio declined to 0.3:1 in 2022 (2021: 0.5:1), showing that the company would still not be capable of meeting its short-term financial obligations.
Physical inspection
The Auditor-General, Johnson Akuamoah Asiedu, in the 2023 Auditor General’s Report sighted by the Daily Graphic, stated that physical inspection conducted during the review period showed that a Freightliner truck with an estimated market value of $100,000 allocated to the Eastern Regional Office of ECG had been grounded.
“We also did not see any report providing an evaluation of the extent of damage. This condition denied the region the benefits of the use of the freightliner truck in its operations. “We advised management to ensure that immediate steps are taken to repair the truck to avoid further deterioration,” he said.
He said section 52 of the Public Financial Management Act, 2016 (Act 921) stipulate that a principal spending officer of a covered entity, state-owned enterprise or public corporation shall be responsible for the assets of the institution under the care of the principal spending officer and shall ensure that proper control systems exist for the custody and management of the assets.
It further states that a control system specified in subsection one shall be capable of ensuring that preventive mechanisms are in place to eliminate theft, loss, wastage and misuse of assets.
Credit transactions
The Auditor-General also noted that the audit period reviewed the bank reconciliation statements and detected that credit transactions amounting to GH¢10.94 million were not identified in the cashbooks of Accra East Region of ECG.
“This lapse could lead to an overstatement of the company’s receivables. We recommended to management to investigate the anomaly and correctly allocate the amount to the appropriate customer accounts,” the report added.
The audit also noted during the physical inspection that three Freightliner trucks with registration numbers GV 2467-14, GV 2461-14 and GV 2471-14 were all faulty and had been grounded at Ashanti SBU.
Two of these vehicles were grounded at the ECG workshop, Adum, and the remaining one was grounded at the American Auto Limited garage in Kumasi.
ECG’s management did not provide the audit team with a report providing an evaluation of the extent of damage to the trucks.