On 24th of October 2024, a coalition of fourteen(14) Civil Society Organisations (CSOs) concerned with the impact of poor governance on the state of Ghana’s energy sector, instructed a team of lawyers at AudreyGrey, a law firm based in Accra, to file a civil suit against the Electricity Company of Ghana (ECG) and Fidelity Bank Ghana Limited (Fidelity).
The coalition is seeking declarations from the High Court that ECG is subject to the Public Procurement Act (2003), as amended, and, therefore, that its recent engagement of Fidelity as the “single account” custodian, and its subsequent large-scale forex transactions with the same bank, to the tune of millions of dollars, should have been subject to the Act. To the extent that they were not, these business transactions are in breach of the Public Procurement Act.
The transactions also raise further concern as there are potential conflicts of interest involving politically exposed executives of Fidelity Bank serving on the Board of ECG.
This legal action of the CSOs is made very urgent by the ongoing financial havoc in the country’s energy sector, a situation long recognised as contributing to the fiscal crisis currently plaguing Ghana. The recent International Monetary Fund (IMF) program, for example, highlighted the chronic energy sector debt as one of the problems choking the country’s finances.
ECG has been implicated in many procurement abuses by the Auditor General over the years, including most recently in relation to its procurement of smart meters. Moreover, the research coordinator of the CSO coalition, the Africa Centre for Energy Policy (ACEP), is currently investigating ECG regarding the multimillion-dollar procurement of a mobile app.
The position of the Coalition is that ECG’s procurement activities are a major part of its perennial financial problems. They reflect a serious breakdown of governance in the energy sector that must be tackled frontally to prevent this country from descending into yet another debilitating power crisis.
It is also crucial for the public to bear in mind that a major portion of the fiscal challenges facing the nation stems from the accumulation of unproductive debt, of which the energy sector is a major driver.
The high inflation, exchange rate depreciation, and even the now famous “haircuts” can thus, in part, be traced to problems in the energy sector.
To the extent that ECG has regularly blamed many of its problems on forex exchange losses to the tune of tens of millions of dollars, we believe that its single account and large-scale foreign exchange (forex) transactions with Fidelity must be subject to the strictest scrutiny, which cannot be achieved without the transparency and level playing field afforded by the Public Procurement Act.
Yet, Fidelity’s lawyers and ECG executives are adamant that ECG should not be brought within the restraining authority of the procurement law.
ECG’s and Fidelity’s continued joint insistence that ECG should not be subject to the Public Procurement Act is an affront to good governance in this country and must be scrutinised in the law courts.
We can also not help but notice that the legal brain behind the ongoing effort by Fidelity Bank to get the courts to bless ECG’s goal of evading the Public Procurement Act is none other than the Member of Parliament (MP) for Bolgatanga East, who is also the Chair of the Subsidiary Legislation Committee of Parliament.
In that role, and by dint of his influence in Parliament, Dr. Ayine is duty bound to consider the regulatory aspects of the ongoing financial crisis at ECG that has pitted the state-owned company against the Public Utilities Regulatory Commission.
Furthermore, the procurement abuses at ECG are regularly the subject of proceedings in Parliament.
We would, therefore, like to draw the attention of the Speaker of Parliament to this potential conflict of interest situation.
We entreat the media to follow the procurement issues at ECG with keen interest and to connect them with the nonstop flow of news about the financial challenges in Ghana’s public sector. More CSOs are likely to join this lawsuit, and/or initiate new ones, in the near future.
Signed.
1. Africa Centre for Energy Policy (ACEP)
2. Africa Centre for Entrepreneurship and Youth Empowerment (ACEYE)
3. Centre for Extractives & Development (CEDA)
4. Centre for Democratic Development (CDD)
5. Community Focus Foundation Ghana (CFF-Ghana)
6. Democratic Credentials Network (DCN)
7. Grassroot Mobilizers Foundation (GMF)
8. Human Environment and Livelihood Platform Foundation (HELP Foundation)
9. IMANI Centre for Policy and Education (IMANI)
10. Institute for Liberty And Policy Innovation (ILAPI)
11. Institute of Energy Studies (IES)
12. iWatch Africa (iWatch)
13. KASA Initiative Ghana
14. Northern Patriots in Research and Advocacy (NORPRA)
15. ODEKRO PMO Foundation (ODEKRO)
16. Renel Ghana Foundation (RENEL)
Here the heading of the writ:
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ECG and Fidelity Bank sued.