Dr. Steve Manteaw, Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), has raised concerns over the exclusion of approximately 50% of the Electricity Company of Ghana’s (ECG) revenue from the Cash Waterfall Mechanism (CWM). During an interview on Joy News’ PM Express on October 21, Dr. Manteaw highlighted the potential damage this exclusion could have on the credibility of the energy sector’s financial recovery, as the CWM was designed to ensure fair distribution of funds to all sector players.
“It’s surprising that, despite a significant increase in revenue, nearly 50% of the funds generated are being withheld from the CWM,” Dr. Manteaw told host Evans Mensah. The CWM, introduced as a financial solution to manage the sector’s liquidity, was meant to ensure that stakeholders receive their fair share of revenue.
However, Dr. Manteaw believes the current implementation of the CWM is falling short of solving the sector’s financial challenges. “While the mechanism isn’t a complete fix, it provides some cushion to keep the sector going,” he added.
The decision to withhold a significant portion of ECG’s revenue stems from the company’s need to cover operational expenses before contributing to the CWM. “ECG has been clear that they must first meet their operational costs, but this hasn’t been fully recognized by policymakers,” Dr. Manteaw explained, likening the situation to the Ghana National Petroleum Corporation’s (GNPC) ongoing requests for revenue recognition.
ECG’s strategy has not gone unnoticed. “The Public Utilities Regulatory Commission (PURC) even pointed out that ECG has opened multiple bank accounts to stash away funds, intentionally keeping them outside the CWM,” Dr. Manteaw remarked.
He called for greater dialogue with ECG to address their concerns, saying, “We need to engage with ECG and investigate their claims. They argue that if all their revenue goes into the CWM, they won’t have enough to cover operational costs.”
The exclusion of 50% of ECG’s revenue also raises questions about the private sector’s role in addressing the energy sector’s debt crisis. “This creates a credibility issue for the entity responsible for revenue assurance,” Dr. Manteaw stressed, urging for transparency in assessing the private sector’s contributions.
Meanwhile, Dr. Nii Darko Asante, a former Board member of the Public Utilities Regulatory Commission (PURC), placed the blame for the Cash Waterfall Mechanism’s failure on ECG. He expressed frustration with ECG’s role in undermining the financial distribution framework, which was intended to ensure fairness in Ghana’s energy sector.
