By Fatou Sillah
The National Audit Office has found that the Ministry of Finance failed to conduct or document a required credit risk assessment before extending an on-lent loan of D582.32 million to the National Water and Electricity Company (NAWEC), raising concerns about the government’s oversight of lending to state-owned enterprises.
The finding is contained in the National Audit Office’s 2025 audit report, which identified shortcomings in the management and monitoring of government loans provided to public enterprises.
Auditors said the Ministry of Finance did not provide evidence that it had assessed NAWEC’s credit risk before issuing the loan, despite a requirement under the Public Finance Act that such assessments be conducted before government funds are lent.
“Henceforth, the Ministry of Finance should conduct credit risk assessments before extending loans as stipulated in the Public Finance Act,” the auditors recommended.
The report also highlighted broader deficiencies in the monitoring of on-lent loans, including inadequate oversight of repayments and projects financed with the borrowed funds.
According to the audit, state-owned enterprises failed to submit key documents required under the government’s lending framework, including audited financial statements, reports detailing how loan proceeds were used, and project implementation reports. Auditors also found that the State-Owned Enterprise Commission had not submitted the monitoring reports required by the Directorate of Loans and Debt Management.
As part of the audit, the National Audit Office requested progress reports for projects financed through the loans. However, auditors said they received only documentation related to the NAWEC JAM Project and a Cisco project, which limited their ability to assess the broader performance of government-financed initiatives.
The auditors recommended that the Directorate of Loans and Debt Management establish stronger mechanisms to monitor both loan repayments and the implementation of projects financed through on-lent government loans.
They also urged the Ministry of Finance to strengthen enforcement of the government’s on-lending policy to improve accountability and oversight of loans extended to state-owned enterprises.
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