ECG, energy sector flagged over procurement and financial breaches – IMF

The energy and roads construction sectors have been identified among areas with significant financial and procurement weaknesses, with the IMF warning that breaches of public financial management rules could expose government to additional fiscal risks.

According to the IMF Technical Assistance Report, more than 15 percent of payables and 6.4 percent of procurement commitments in the two sectors were found to be in breach of public financial management regulations or statutory requirements.

The report highlights the Electricity Company of Ghana (ECG) in particular over procurement and contractual weaknesses.

The report cites a Ghana Audit Service performance audit which found that ECG acquired electricity meters valued at approximately US$145 million through 50 contracts without complying with the Public Procurement Act.

It also raises concerns over unsolicited “take-or-pay” Power Purchase Agreements, which contributed to generation capacity exceeding actual national demand.

The IMF says such arrangements have created financial obligations that continue to put pressure on the energy sector and public finances.

It argues that stronger oversight of SOE procurement, contracts and financial commitments is needed to contain fiscal risks and ensure state-owned entities operate within public financial management and statutory requirements.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.

Tags:  

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.