Gambia: Government Owes Social Security More Than D816 Million On Behalf of Nawec in 2022

The National Assembly's Public Enterprises Committee (PEC) has revealed that the Government of The Gambia owes the Social Security and Housing Finance Corporation (SSHFC) D816,706,067 on behalf of the National Water and Electricity Company (NAWEC), and has also raised concerns about delays in meeting agreed-upon repayment obligations.

The committee highlighted the debt in its recently adopted report on the scrutiny of the 2022 accounts, financial statements and management letters of State-Owned Enterprises (SOEs).

According to the report, auditors reviewed an agreement signed between the Government of The Gambia and SSHFC in 2020 under which the government acknowledged owing the Corporation D816,706,067 on behalf of NAWEC.

The agreement required the government to repay the debt through annual payments of D163,341,213.40, to be made in two instalments each year.

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However, the auditors found that during the period under review, only D81,670,606.70 was paid instead of the expected D163,341,213.40, leaving D81,670,606.70 outstanding for that payment period.

"Upon the auditors' review of the agreement between SSHFC and the Government of The Gambia entered into in 2020, the government agreed owing SSHFC GMD816,706,067 on behalf of NAWEC and the payment plan was to make annual payment of GMD163,341,213.40 bi-annually, but the auditors noted that out of the GMD163,341,213.40 expected only GMD81,670,606.70 was paid," the report stated.

The Committee expressed concern over the payment shortfall and urged the government to comply fully with the repayment schedule agreed with SSHFC.

To address the matter, PEC recommended that the government carry out a comprehensive reconciliation between the payments expected under the agreement and the amounts actually paid.

The Committee also called for direct engagement between SSHFC and the relevant government authorities to ensure future payments are made in accordance with the signed agreement.

"A detailed reconciliation between the expected payments and the actual payments should be made by the Government of The Gambia on behalf of NAWEC, and engage in direct communication with relevant government officials to ensure payments are in line with the signed agreement," the Committee recommended.

The report also examined another agreement between SSHFC and NAWEC involving the settlement of utility bills owed by the Gambia Tourism Services Company (GTSC), Ocean Bay Hotel and Sun Beach Hotel.

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Under the arrangement, the electricity and water bills of the three institutions were to be paid directly to SSHFC as part of reducing NAWEC's outstanding debt to the Corporation.

During the audit, it was discovered that SSHFC maintained two separate general ledger accounts relating to the arrangement.

Auditors observed that one of the ledger accounts reflected a negative balance, indicating possible overpayments.

When auditors sought clarification, SSHFC management confirmed that reconciliation between the Corporation and NAWEC was still ongoing and had not yet been finalised.

According to the report, the reconciliation exercise is intended to establish the correct balances owed between the two institutions before the figures can be accurately reflected in the financial statements.

The Committee therefore recommended that the reconciliation process be completed without delay.

"The reconciliation process must be expedited to ensure that the closing receivable balance due from NAWEC is accurate and agrees with the balance maintained by NAWEC," the Committee recommended.

PEC stressed that timely reconciliation of accounts and strict adherence to repayment agreements are essential to protecting SSHFC's financial position, strengthening accountability and ensuring sound management of public resources.