A former board member of the Public Utilities and Regulatory Commission (PURC), Dr Nii Darko Asante, has placed the blame for the failure of the Cash Waterfall Mechanism (CWM) squarely on the Electricity Company of Ghana (ECG).
In an interview, he expressed frustration over ECG’s role in undermining the financial distribution framework designed to ensure fairness in Ghana’s energy sector.
“What you’re observing was expected to happen from day one when the Cash Waterfall was set up. It’s not a surprise that matters got worse over time,” Dr. Asante said.
He stated that ECG had long been a problematic player in the sector.
He explained that historically, the company has prioritised its own revenue needs, often at the expense of other critical sector players like GridCo and other generation companies.
“ECG has short-changed the sector in terms of revenue for years. They collect from consumers, take what they want, and then decide who gets what’s left. If they’re supposed to collect 100 cedis, and their costs are 20 cedis but they only collect 40, they still keep the full 20 cedis,” Dr. Asante explained.
“This leaves the rest of the sector with only 20 cedis to share instead of the 80 cedis that should have been available.”
According to Dr. Asante, the Cash Waterfall Mechanism (CWM) was intended to correct these imbalances by ensuring that whatever ECG collected was fairly distributed according to predefined ratios.
“The CWM brought visibility to how the insufficient funds were being shared,” he stated.
However, this transparency has not prevented the sector from struggling due to ECG’s consistent failure to collect sufficient revenue.
Dr Asante also highlighted how ECG’s reported revenue often does not reflect actual cash received.
“Anyone who has done basic accounting will recognise that what is reported in the financial statements does not always reflect cash collected.
“The CWM was looking purely at actual revenue accrued — cash received into ECG accounts, not just what was billed or claimed to be collected.”
Joining Dr. Asante on the show, Dr. Steve Manteaw, Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), voiced his concerns about ECG excluding a significant portion of its revenue from the CWM.
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