Ghana Water Limited (GWL) recorded a substantial deficit of GHS 3.063 billion in 2024. This significant financial shortfall has led the Public Accounts Committee (PAC) to postpone its hearing on the company's performance. The PAC has now directed the sector Minister and GWL's Managing Director to appear before the committee to provide comprehensive explanations.
The postponement aims to give Minister Ahmed Ibrahim, MD Adam Mutawakilu, and the GWL management ample time. They are expected to thoroughly study the concerns highlighted in the Auditor-General’s Report. The committee seeks relevant policy decisions and clear explanations regarding the company's financial state. This includes addressing a notable decline in revenue and a sharp increase in liabilities.
This financial distress at GWL adds to Ghana's broader economic challenges, particularly concerning state-owned enterprises (SOEs). Many SOEs frequently rely on government support, increasing the nation's contingent liabilities. The Auditor-General’s Report revealed GWL's revenue fell by GHS 4 million, from GHS 2.113 billion in 2023 to GHS 2.109 billion in 2024. This revenue decline occurred despite the company incurring expenditures of GHS 5.167 billion in 2024. The resulting GHS 3.063 billion deficit underscores the urgent need for financial restructuring and improved operational efficiency within the utility sector. The government's ability to manage these liabilities directly impacts public finance stability and investor confidence.
PAC Chairperson Abena Osei Asare expressed deep dissatisfaction with GWL's recurring explanations for its financial woes. She questioned the company's repeated justification of 'ageing equipment' for continuous borrowing. “From 2017 to 2024, I can count the number of loans that we’re taking on behalf of Ghana Water with the same explanation,” she stated. The Chairperson also voiced concerns about GWL's capacity to generate sufficient revenue to service its mounting debts. She noted that GWL often struggles to repay loans, shifting the burden onto the government's balance sheet. This pattern highlights a systemic issue within public utility financing.
The rescheduled hearing will provide a critical opportunity for the PAC to scrutinize GWL’s financial position further. Lawmakers will examine the company's expenditure patterns and its rapidly growing liabilities. Decision-makers will be watching closely for concrete plans to address the deficit and improve revenue collection. The outcome could influence future government policy on SOE oversight and public utility funding. Markets will also monitor the situation for its potential impact on Ghana's overall fiscal health and debt sustainability. This situation demands a robust response to prevent further strain on national resources and ensure essential services remain viable.
GWL's non-current assets increased by 1.3%, from GHS 10.849 billion in 2023 to GHS 10.993 billion in 2024. This increase followed the acquisition of additional property, plant, and equipment. However, current liabilities surged by 24.9%, rising from GHS 3.129 billion in 2023 to GHS 3.908 billion. This was largely due to higher payables. Non-current liabilities also climbed significantly, increasing by 26.7% from GHS 8.286 billion in 2023 to GHS 10.497 billion. Management attributed the expenditure to replacing ageing equipment at various water treatment facilities. However, the committee found this explanation insufficient. The PAC seeks a clearer picture of the company's financial health and a sustainable strategy for its future operations. This includes addressing the underlying causes of its persistent deficits and debt accumulation. The committee's firm stance reflects growing parliamentary concern over public sector financial management.