The Electricity Company of Ghana (ECG) recorded a loss of ¢1.913 billion in 2021 as against a profit of ¢822.549 million in 2020.
This represented a 332.7% deterioration in the company’s financial performance.
According to the 2022 Auditor General Report, total income of the company decreased by 13.7% to ¢12.104 billion in 2021.
The fall in total income, the report said, was mainly due to the decrease in government grants. The grants were payments made to power producing companies by the government on behalf of Electricity Company of Ghana.
The company also incurred a direct cost of ¢12.104 billion in 2021, as against ¢14.03 billion in 2020.
Total Expenditure however increased by 6.1% from ¢13.210 billion in 2020 to ¢14.018 billion in 2021 and this was mainly attributed to increases in power purchased and transmission cost for the year under review.
Company cannot meet short term obligations
In terms of its balance sheet, the company’s Non-Current Assets rose by 9.7% from ¢20.468 billion in 2020 to ¢22.461 billion in 2021. The increase was due to gains recognised from the revaluation of assets and purchase of additional property, plant and equipment during the year.
Also, current Assets rose by 2.2% from ¢8.064 billion in 2020 to ¢8.241 billionin 2021. This due to an increase in trade and other receivables.
On the other hand, Current Liabilities recorded a 21.5% increase from ¢14.566 billion in 2020 to ¢17.698 billion in 2021 due to an increase in trade and other payables.
The current ratio decreased from 0.6:1 in 2020 to 0.5:1 in 2021 indicating the inability of the company to meet its short-term financial obligations.