Hubtel's GH¢ 259 million claim sparks controversy at ECG

Hubtel, a leading Ghanaian payment services provider, has been at the center of controversy surrounding its deal with the Electricity Company of Ghana (ECG). The issue began when Hubtel submitted an invoice of GH¢ 259,819,544.97 to ECG for payment, which was met with resistance from ECG management.

Lawyers representing ECG rejected many of the charges, stating they were outside the scope of their contract. After reconciliation efforts, the two parties agreed on a reduced payment of GH¢ 20 million .

The controversy stems from a mobile application initially developed in-house by ECG, which was later managed and enhanced by Hubtel. Hubtel received $12 million to add new functionalities and takes a commission per transaction .

The payments to Hubtel have been flagged by the Auditor General, amid ongoing audits. The invoice submitted by Hubtel was reportedly backdated to justify certain payments, following queries raised by auditors .

Hubtel has clarified that the $25 million figure mentioned in the allegations was a projected cost limit approved by ECG's Board of Directors at the start of the project. The company also addressed misconceptions about its revenue-sharing agreement, stating it charges a transaction fee of 1.95% on its payment platform, with Hubtel's share being 0.95% .

The company highlighted a 210% average monthly revenue growth since August 2022, marking the longest period of sustained growth in ECG's history. However, questions still linger over the justification for the additional charges and the broader implications of the deal .