Finance Minister announces publication of quarterly audits of Cash Waterfall Mechanism
In a bid to bolster transparency and accountability within the country’s beleaguered energy sector, the government has announced plans to release audit findings of the cash waterfall mechanism.
This move comes against a backdrop of significant financial challenges, including a mounting debt burden exceeding one billion dollars owed to independent power producers.
Introduced in July 2017, the cash waterfall mechanism was designed to streamline revenue collection and distribution.
However, its efficacy has been called into question, necessitating a closer examination of its implementation challenges and the need for enhanced transparency.
Speaking to journalists at the 2024 World Bank and IMF Spring meetings, Finance Minister Mohammed Amin Adam underscored the mechanism’s importance and the government’s commitment to transparency.
“The cash waterfall mechanism is pivotal as it ensures consistent cash flow throughout the value chain, enabling stakeholders to meet their operational costs. However, we acknowledge the challenges in its implementation.
“In collaboration with the World Bank and the IMF, we have instituted measures, including quarterly audits and the public release of audit findings, to enhance its effectiveness.” he remarked.
According to energy analyst, Dr. Yussif Sulemana, the initiative by government to audit the cash waterfall mechanism and publish the findings of the audit report is a step in the right direction.
“This move is a step in the right direction for transparency. The sector’s challenges are multifaceted, and increased transparency will facilitate a prioritised and targeted approach to addressing them,” he quipped.
The government’s commitment to transparency through the publication of audit findings is expected to foster trust among stakeholders, encourage prudent financial management, and ultimately, pave the way for the sector’s sustainable growth.
