14 CSOs sue ECG and Fidelity Bank

A coalition of 14 Civil Society Organisations (CSOs) has filed a civil lawsuit against the Electricity Company of Ghana (ECG) and Fidelity Bank Ghana Limited, raising concerns about governance issues in the country’s energy sector.  The legal action, initiated on Thursday (24 October) by the Accra-based AudreyGrey law firm, challenges ECG’s recent dealings with Fidelity … The post 14 CSOs sue ECG and Fidelity Bank appeared first on Asaase Radio.

Oct 24, 2024 - 20:35
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14 CSOs sue ECG and Fidelity Bank

A coalition of 14 Civil Society Organisations (CSOs) has filed a civil lawsuit against the Electricity Company of Ghana (ECG) and Fidelity Bank Ghana Limited, raising concerns about governance issues in the country’s energy sector. 

The legal action, initiated on Thursday (24 October) by the Accra-based AudreyGrey law firm, challenges ECG’s recent dealings with Fidelity Bank, alleging violations of Ghana’s Public Procurement Act (2003).

The CSOs are seeking a High Court ruling that ECG is bound by the Public Procurement Act, which mandates transparency in financial dealings involving public institutions. 

They claim ECG’s appointment of Fidelity as the custodian of its “single account” and subsequent multimillion-dollar foreign exchange (forex) transactions with the bank bypassed this legal framework.

A sector in crisis

In a strongly worded statement, the CSOs emphasised the urgency of the case, citing the precarious state of Ghana’s energy sector as a key contributor to the country’s fiscal woes. 

They pointed to recent findings from the International Monetary Fund (IMF), which highlighted Ghana’s chronic energy sector debt as a major factor undermining the national economy.

“ECG has been implicated in many procurement abuses by the Auditor General over the years,” the statement said, “including most recently in relation to its procurement of smart meters.”

The CSO coalition’s research coordinator, from the Africa Centre for Energy Policy (ACEP), is currently investigating ECG’s multimillion-dollar procurement of a mobile app, raising further red flags about governance at the state-owned utility.

Procurement irregularities

The coalition argues that ECG’s procurement practices are at the heart of its financial struggles, exacerbating Ghana’s energy crisis. 

“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,” the CSOs stated.

The group highlighted the direct link between the energy sector’s financial mismanagement and the broader fiscal challenges facing Ghana, including inflation, currency depreciation, and the controversial “haircuts” on bondholders.

They assert that ECG’s forex losses, often cited as a cause of its financial difficulties, warrant strict scrutiny, particularly in light of its exclusive financial dealings with Fidelity.

“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,” the statement continued. 

“Yet, Fidelity’s lawyers and ECG executives are adamant that ECG should not be brought within the restraining authority of the procurement law.”

Allegations of conflict of interest

The CSOs also raised concerns about a potential conflict of interest involving Dominic Ayine, Member of Parliament (MP) for Bolgatanga East and Chair of Parliament’s Subsidiary Legislation Committee. 

They allege that Ayine, acting as the legal representative for Fidelity Bank, is using his influence to shield ECG from being held accountable under the Public Procurement Act. 

“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,” the statement asserted.

The coalition is urging the Speaker of Parliament, Alban Bagbin, to investigate the matter while calling on the media to closely monitor ECG’s procurement practices and their impact on Ghana’s broader financial difficulties.

Growing momentum

The CSOs have vowed to continue their legal efforts, with more organisations expected to join the lawsuit. 

“More CSOs are likely to join this lawsuit and/or initiate new ones in the near future,” they said, stressing the importance of public scrutiny in holding ECG accountable.

The 14 CSOs leading the charge include the Africa Centre for Energy Policy (ACEP), the Democratic Credentials Network (DCN), the Institute for Liberty and Policy Innovation (ILAPI), and the IMANI Centre for Policy and Education, among others.

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