Correction of False Claims About ECG Commercial Agreement

September 29, 2024 | 6 minutes read

Over the past few days, officials of some Civil Society Organisations (CSOs) and media commentators have sought to put out false statements about Hubtel’s work at the Electricity Company of Ghana (ECG).

Some of these false statements seem to be designed to totally discredit the work Hubtel has done in the recent transformation and record-breaking achievements in ECG’s revenue collection and commercial operations. Other false statements have also tried to
paint the picture that Hubtel is part of a procurement scheme that has received payments for no work done.

The table below provides factual responses to these false claims and statements.

False Statements by CSOs & Media Commentators	The Facts
ECG has paid $25million to Hubtel for the PowerApp software.	At the start of the project, $25million was only a figure set out as the cost limit by the Board of Directors of ECG. Hubtel has NOT been paid $25million. With the guidance of Hubtel and other third-party service providers, ECG spent about $12million of the $25million cost limit to replace old and obsolete systems that were causing severe revenue losses and frequent downtimes. These included the upgrading of its core databases from Oracle 10G to Oracle 19C, a new balance management and accounting system, hybridization of metering infrastructure, overhaul of staff systems for commercial operations, overhaul of customer self-service systems, overhaul of revenue protection systems and others. The new ECG PowerApp is only one of the cost lines within these expenditures.
Hubtel has said it received $25million but ECG says it has paid GHS 171 million for the PowerApp.	As mentioned above and also in our last press release following the signing of the agreement, some $12million (cumulatively amounting to about GHS 171 million) has been used so far to overhaul ECG’s old and obselete systems as part of this project. Hubtel has NOT quoted any where that we have received $25million from ECG. That press release dated 28th March 2024 can be found at https://blog.hubtel.com/hubtel-announces-completion-of-commercial-agreement-with-ecg/
Hubtel is owned by leading political official(s) and has several contracts with the Government of Ghana	At no point since the founding of Hubtel have any of the company’s shares been held or owned, directly or indirectly, by an official of any government institution or any person affiliated with any political party in Ghana. Also, at no point since the founding of the company has it had any contract with the Government of Ghana.
ECG could have simply bought the APIs from Hubtel or any other provider and had its own engineers build the new commercial systems.	This is misleading and simply not practical. It is similar to saying one can purchase payment APIs (from say a mobile money telco) so that they never have to pay transaction processing fees ever again. It simply does not work like this within the payment processing industry in Ghana or globally
Hubtel gets 3% of every electricity unit purchased by customers of ECG.	Hubtel does NOT get 3% of electricity bought by ECG customers. For all merchants and retailers using Hubtel’s platform, we charge a fee of 1.95% on all transactions processed through our payment platform. 1% of this 1.95% is typically retained by the mobile money and card scheme providers, and Hubtel receives 0.95% as our fees. This is no different in ECG’s case. Hubtel’s fee is 0.95%. Other fees which are not part of Hubtel’s fees include fees retained by upstream payment providers such as mobile money providers, Visa and MasterCard, provision for metering cloud infrastructure, bank transfer charges and next day settlement fees to meet ECG’s demand to receive all collections within 1 day of processing regardless of the settlement period of the upstream payment scheme provider.
The duration of ECG’s agreement with Hubtel is 30 years.	The agreement is for 5 years.
There has been no improvement in ECG’s revenues since Hubtel’s involvement.	As of the time of this release a monthly average revenue growth of over 210% (compared to the revenues of August 2022) has been achieved as a result of the work being done by Hubtel and the new commercial system providers. This is the longest-sustained record of monthly revenue growth in ECG’s collection history. Even factored for the recent average increase in tariff of about 80%, there is still a significant net monthly revenue growth of about 72%; which is a record growth since the year 2001. This significant jump in monthly revenues has enabled the ECG to become self-sufficient in meeting its obligations to key suppliers in the short-term.

For the avoidance of doubt, the new commercial systems designed, developed, and implemented by Hubtel and other service providers have only been involved in ECG’s operations since March 2023. Therefore, attempts by some CSOs and media commentators to link our work to ECG’s past financial performance and legacy matters are completely misleading.

Hubtel remains a company deeply rooted in the ideals of good governance, transparency, and an unyielding determination to contribute to the development of the digital economy in Ghana. We wish to assure the general public that our service at ECG has been guided by these principles at all times.

We also remain extremely proud that after several initiatives and investments in the past (costing hundreds of millions of US dollars) aimed at improving ECG’s revenues, that Hubtel, a company founded and managed by Ghanaians, possesses the technology and expertise to transform ECG and set it on the path towards commercial profitability at a fraction of the past investments.

We urge the general public to disregard these misleading comments.

ABOUT HUBTEL

Hubtel is a leading technology company licensed by the Bank of Ghana as an Enhanced Payment Service Provider.

The company makes it easy for people to find and pay for everyday essentials from local businesses of all sizes. Hubtel’s payment processing, messaging, and feature-rich platform enable users to pay bills, make payments, order food, and purchase everyday essentials.

The Financial Times of the UK named Hubtel as Ghana’s fastest-growing company for the 2022 financial year. Amazon Web Services (AWS) and Forbes Magazine have also previously featured the company.

Hubtel operates 23 offices across Ghana and has about 700 direct employees. Founded in 2005, Hubtel’s mission is to drive Africa forward by enabling everyone to find and pay for everyday essentials. The company aims to be Africa’s most useful company, building a platform on which everyone can find, pay, and easily partake in the emerging digital economy across the continent.

Find out more at www.hubtel.com