A few weeks ago, an alleged audio recording of senior Nawec officers surfaced where they discussed inflating an invoice. Like most Gambians, I was not surprised about the existence of senior officials of a parastatal who are concerned only about their pocket rather than carry out their duties. The recording provided a vivid example of some of the blatant financial malpractices evident in the audited financial records of this particular parastatal. This type of illegal and unfortunate practice has been going on in this institution for years, with disastrous consequences for the country.
Nawec is the paradigmatic example of a poorly functioning state-own enterprise (SOE) that is not only failing to meet its objectives but is costing Gambian taxpayers billions of dalasi annually. The problems of Nawec are well known. No one in The Gambia has to be told about the poor state of the energy infrastructure and services. As if things cannot get embarrassing enough, several flights had to be diverted from Yundum to Dakar on 21st December, 2024 because of unreliable power supply at the airport. As with many problems in government institutions, there has been no will to tackle the problems at Nawec because so many people at the top benefit from the maintenance of the status quo.
It is important to appropriately assign responsibility, thereby making a distinction between top officials and regular employees of Nawec. Most employees of Nawec are hardworking individuals who are doing their best. The problems of Nawec are at two levels. At the top level is the problem of policy and regulation, which is at the highest level of decision-making authority in the country. The second part of the problem is at the level of Nawec management. In other words, the problem rests with a few individuals at the top who are either busy abdicating their responsibilities or stealing public funds, while the lower ranked employees toil without recognition of their contributions and sacrifices.
With that in mind, let me reveal what I discovered in going through Nawec’s audited financial reports between 2017 and 2020. I wanted to go through all the recent audited financial reports but the latest year available was 2020. The fact that no audited financial report later than 2020 was available would become important later. Going through the financial reports is a very revealing exercise to fully appreciate the level of rut and dysfunctionality in our public institutions. Each and every annual financial report of Nawec that is currently available should have triggered a special audit by the country’s auditor general because of the negligence, fraud and other economic crimes perpetrated against the state.
Let me provide some clear instances of financial malpractices that were revealed in the audited financial statements. There were frequent cases of misrepresentation of accounts payable, which are the amounts Nawec owes to vendors. In 2019, the auditors selected a sample of vendors of Nawec for verification. For each of the vendors that the auditors checked, there was a discrepancy between the amount listed in Nawec’s general ledger and the confirmed amount by the auditors. Their confirmation checks of just a sample of vendors showed a discrepancy of over D60 million that year. Please note that this was just a small sample of vendors in a single year.
In multiple years, there were significant discrepancies in the accounts receivables in the Nawec’s accounts, which were the amounts that Nawec was expected to receive as payments from other entities. In 2020, auditors found a discrepancy of about D118 million in Nawec’s accounts receivable. About D236 million in discrepancies was noted by auditors in Nawec’s revenues in 2020 alone. In the same year, Nawec was stuck with D18 million in stale cheques, which referred to payments made to Nawec that management did not redeem because the very basic processes of depositing cheques in time did not occur.
Between 2017 and 2020 (inclusive), there was on average about D204 million per annum that auditors cannot account for, and Nawec’s management did not provide documentation to account for the discrepancies. Over this four-year period, this amounted to over D800 million. Going by these figures, it is not difficult to estimate the volume of mismanaged funds in the eight-year period between 2017 and 2024. It is reasonable to expect at least D1.6 billion was mismanaged at Nawec since Adama Barrow came to power. This figure is a lower bound – in all likelihood, the amount mismanaged at Nawec exceeded this amount. After all, since there have been no significant reforms at Nawec, it is reasonable to assume that practices that occurred during the period 2017 – 2020 continued to the present.
What should have been of major concern to any serious government is the fact that the financial statements of Nawec are incredibly late. This is where the issue of failure at policy and regulatory level comes into play. We are at the end of 2024 but there is no publicly available audited financial statement of Nawec for 2021 or 2022 or 2023. This is simply unacceptable. There is no reason why the government, through the relevant ministry and regulatory agency, cannot compel this parastatal to produce their financial report for a given year within the second quarter of the following year.
Here is why timely release of financials of an SOE is important. If financial statements are not released on time, there is no way for the public and regulatory authorities to be informed about serious financial malpractices that may be occurring. In the case of Nawec, serious financial malpractice can happen for years without the awareness of the public. In the current situation, the whole country is essentially blind to what is happening in Nawec since 2021. The Presidency, the Department of Energy and the Public Utilities Regulatory Authority (Pura) do not seem to care.
It is important that Gambians do not get lulled into a false belief that the government is fighting corruption just because the two senior Nawec officials caught attempting to inflate invoices are being investigated. First of all, those two officials would have remained in their jobs if there had been no audio recording catching them in the act. Indeed, evidence of bigger crimes is well documented in Nawec’s audited financial statements since at least 2017. These should have triggered special audit or criminal investigations. As far as I can tell, neither of these have occurred.
It is clear that this current government does not take seriously the responsibility of addressing mismanagement of SOEs in general and Nawec in particular. The seriousness of the government to tackle a problem is determined by actions, not words. A government that is serious about proper regulation of Nawec would not have hired Njogou Bah to run Pura. The Janneh Commission provided ample evidence that Njogou Bah is not only an incompetent official but complicit in serious financial misconduct during the Yahya Jammeh regime. But just because he recently proved useful to Adama Barrow politically, he is now rewarded with such an important position. This is just one example among many that proves that Adama Barrow places political expedience ahead of national interest.
A government that is serious about the energy sector overall would not recycle senior management officials from Nawec into ministerial posts at the Ministry of Petroleum and Energy. Yet, we have had two ministers of petroleum and energy who were recycled from top management positions at Nawec. Is it any wonder that energy sector policies and strategies, as well as their implementation, have been found wanting?
The issues of proper energy policy, strategy and regulation, as well as management at Nawec is important given the real consequences for the country’s development. It is difficult to over emphasise the importance of energy infrastructure and service to economic growth. Without affordable and reliable energy, there cannot be economic development in any modern economy. The power outages that are so frequent that we have become numb to them should not be acceptable because they are extremely debilitating. The amounts that Nawec is adding to the unsustainable debt as a result of financial mismanagement is affecting the whole country through another dimension.
All Gambians need to urge our National Assembly Members to ask the government to compel Nawec and other SOEs to produce their audited financials. Nawec’s management and the minister of petroleum and energy, Mr Nani Juwara, must answer why audited financial statements for 2021, 2022 and 2023 are still not publicly available by December 2024. And a special audit of this parastatal is long overdue.
