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Audit reports on cash flow system in energy sector to be made public – Finance Minister-designate

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The Minister-designate for Finance, Dr Mohammed Amin Adam, has revealed the government’s intention to release audit results of the cash waterfall mechanism to improve transparency and accountability in Ghana’s energy sector.

This decision comes at a crucial time as the sector grapples with substantial financial issues, including a debt of over one billion dollars owed to independent power producers.

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To tackle this mounting debt, the government introduced the cash waterfall mechanism in July 2017, with the goal of improving revenue collection and distribution.

However, the mechanism has faced challenges in its effectiveness, underscoring the necessity for increased transparency and efforts to address implementation hurdles.

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Dr Mohammed Amin Adam emphasised the importance of the cash waterfall mechanism during the 2024 World Bank and IMF Spring meetings, stating that audit findings will be published to ensure transparency.

“The cash waterfall mechanism is important because at least it ensures that there’s cash flow, every player in the value chain has some cash flow so that they can be able to meet their operational cost but it’s important to also state that we’ve had challenges implementing the cash waterfall mechanism as a result of which through collaboration with the World Bank, with the IMF, we have instituted some measures to make it effective.

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“One of the measures we have introduced is to audit the cash waterfall mechanism quarterly. But we have also been required to publish the audit findings.”

Energy analyst Dr. Yussif Sulemana, on his part, noted that this will help tackle fiscal challenges in the sector.

“I think it’s a step in the right direction for transparency. So if you notice the problem that we have, some of them are induced and that has made it multifaceted and that has made it difficult to disengage which you need to tackle, which you need to prioritise.”

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