Dr. Nii Darko Asante, a former board member of the Public Utilities Regulatory Commission (PURC), has attributed the failure of Ghana’s Cash Waterfall Mechanism (CWM) to the actions of the Electricity Company of Ghana (ECG). Speaking on Joy News’ PM Express on October 21, Dr. Asante expressed his frustration over ECG’s role in undermining the financial framework, which was designed to ensure equitable distribution of revenue within the energy sector.
“What we’re seeing now was expected from the start when the Cash Waterfall was introduced. It’s no surprise things have worsened over time,” he remarked, pointing to ECG’s longstanding issues within the sector.
According to Dr. Asante, ECG has consistently prioritized its own financial needs, often leaving key players like GridCo and power generation companies with insufficient funds. “ECG has short-changed the sector for years. They collect money from consumers, take what they need first, and then distribute what’s left. For example, if they’re supposed to collect 100 cedis, and their costs are 20 cedis but they only manage to collect 40, they still keep their full 20 cedis, leaving only 20 to be shared among the rest,” he explained.
The CWM was established to address these imbalances by ensuring that whatever ECG collected was fairly distributed among sector players according to predetermined ratios. “The mechanism was supposed to make the sharing of these insufficient funds more transparent,” Dr. Asante said. However, transparency alone has not solved the underlying problem of insufficient revenue collection by ECG.
Dr. Asante also highlighted discrepancies in ECG’s reported revenue, noting that what appears in financial reports often does not reflect actual cash received. “Anyone familiar with basic accounting knows that reported figures don’t always match cash in hand. The CWM focuses on actual revenue — the money that enters ECG’s accounts — rather than what was billed or claimed to be collected,” he explained.
Dr. Steve Manteaw, Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), also voiced concerns on the show about ECG withholding a significant portion of its revenue from the Cash Waterfall Mechanism. “It’s alarming that, despite an increase in revenue, around 50% of ECG’s earnings are kept outside the CWM,” he told the host, Evans Mensah.
Dr. Manteaw warned that excluding such a large portion of ECG’s revenue from the mechanism threatens the credibility of the CWM and could hinder the energy sector’s financial recovery. “This exclusion raises serious credibility issues. The CWM was meant to ensure fair distribution, but if half of the revenue is kept out, it undermines efforts to stabilize the sector’s finances,” he added.
While Dr. Asante acknowledged ECG’s complaints that the funds are insufficient for their operations, he stressed that the issue affects the entire energy sector. “Yes, ECG says it doesn’t have enough to run its distribution, and that’s true. But what about GridCo and the generation companies? No one has enough money to keep the system running,” he said.
Both experts agreed that while the Cash Waterfall Mechanism was a positive step toward financial reform, its impact has been severely weakened by ECG’s actions and the exclusion of significant revenue streams from the system. They called for urgent reforms to ensure fair distribution and greater accountability across the energy sector.
