NAWEC Recorded D6.4 Billion Accumulated Loss in 2022, Parliamentary Committee Finds

By Fatou Sillah

The National Water and Electricity Company (NAWEC) recorded an accumulated loss of D6.4 billion in 2022, according to a report by the National Assembly’s Standing Committee on Public Enterprises (PEC), which also identified significant concerns over the utility’s financial reporting, procurement practices, and internal accounting controls.

The committee’s report, based on audited financial statements, management letters, and activity reports of state-owned enterprises, found that NAWEC posted a loss of D3.3 billion for the 2022 financial year, resulting in a net liability of D2.1 billion and an accumulated loss of D6.4 billion.

According to the committee, these financial indicators raise material uncertainty about the company’s ability to continue operating as a going concern.

“The entity made a loss for the year of GMD 3.3 billion and an accumulated loss of GMD 6.4 billion and a net liability of GMD 2.1 billion,” the report stated.

Despite the company’s financial position, the committee noted that NAWEC did not conduct a formal going concern assessment, a key requirement for evaluating an entity’s capacity to continue its operations.

To address this, the committee recommended that NAWEC’s Board and Management undertake a comprehensive annual going concern assessment beginning with the 2026 financial year.

The report also highlighted discrepancies in the company’s revenue records. Auditors identified differences between monthly sales summaries generated by NAWEC’s billing department and figures recorded in the General Ledger, amounting to D18,525,105 for electricity sales and D175,336 for water sales.

In addition, auditors raised concerns over the company’s revenue recognition practices for prepaid electricity customers. The report noted that revenue from prepaid electricity sales was recognized immediately upon payment, while no corresponding accounting entry was made when customers consumed the purchased electricity.

According to the committee, this practice raises questions about compliance with the matching principle under accrual accounting standards, which requires revenues and related expenses to be recognized in the same accounting period.

The committee further identified procurement irregularities, revealing that several suppliers engaged by NAWEC were not registered with the Gambia Public Procurement Authority (GPPA) at the time contracts were awarded, contrary to public procurement regulations.

The report stated that the affected suppliers included individuals and businesses contracted for equipment hire, transportation, excavation, and the supply of goods and services. It also found that some of the suppliers were not listed on NAWEC’s approved vendor register.

Presenting the report, the Chairperson of the Public Enterprises Committee, Hon. Lamin J. Sanneh, Member for Brikama South, noted that NAWEC has continued to rely on substantial government and donor financial interventions in recent years.

He said the utility recorded losses of approximately D3.6 billion in 2024, benefited from a World Bank-supported intervention of about D1.6 billion in 2025 to offset Karpowership-related obligations, and received government support through the assumption of approximately D1.2 billion in debt and arrears.

To improve the company’s financial management, the committee recommended that NAWEC strengthen its internal control systems, enforce compliance with procurement regulations, and enhance financial reconciliation processes.

It also urged management to reconcile discrepancies between billing records and the General Ledger and ensure full compliance with applicable accounting standards governing revenue recognition and financial reporting.