SOE Report Warns: NAWEC’s Financial Woes Pose National Risk
NAWEC Company Logo
By Edward Francis Dalliah,
The National Water and Electricity Company (NAWEC) remains in dire financial straits as its losses continue to mount, raising concerns about its sustainability and impact on the national economy. According to the latest 2024 SOE Biannual Financial Report, the state-owned utility company recorded a staggering net loss of D1 billion in the first half of 2024, despite generating the highest revenue among state-owned enterprises.
NAWEC’s revenue for January to June 2024 stood at GMD 4.12 billion, driven by its monopoly in the energy sector. However, this was overshadowed by an operating loss of D20.7 million, further exacerbated by significant foreign exchange losses that eroded its financial standing.
While answering questions about NAWEC in Parliament last December, Minister for Petroleum, Energy, and Mines Hon. Nani Juwara highlighted the company’s struggle with rising foreign exchange rates, which has hindered its ability to make timely payments to both Karpower and Senelec, the service providers for its operations.
The Minister further revealed that due to this challenge, an additional D796 million was added to the company’s outstanding payments to these energy utility providers for June, July, August, and September 2024.
According to the 2024 SOE Biannual Financial Report, a major contributor to NAWEC’s financial distress is its inability to fully recover costs, a challenge compounded by high operational expenses—particularly staff and administrative costs, which totaled D293 million.
This significant allocation to salaries and administrative operations limits the company’s ability to invest in infrastructure and improve operational efficiency. If this trend continues, NAWEC will remain unprofitable, ultimately hindering its service delivery.
Beyond profitability concerns, NAWEC faces serious liquidity and solvency risks. The report indicates that the company struggles to meet its short-term financial obligations and has a high debtor turnover ratio, signaling difficulties in recovering payments from customers.
A 2024 Directorate of Internal Audit Report on SOE arrears (2020-2022) revealed that government entities owed NAWEC D248 million in unpaid electricity and water bills. These outstanding payments have further exacerbated the company’s financial troubles, as it continues to provide services without receiving the necessary funds to cover operational costs.
More critically, NAWEC's total liabilities stand at D16.54 billion, far exceeding its assets of D11.49 billion, leaving it with negative net assets of D5.04 billion—a clear sign of extreme financial distress.
With long-term liabilities constituting 60% of its total debt, the company is heavily reliant on borrowing, raising concerns about its ability to sustain operations without continued government intervention—especially when the government itself is contributing to its losses.
The SOE Commission stated, “NAWEC requires dedicated emergency attention given the fiscal risks it poses to the Gambian economy.” The Commission further emphasized the urgent need for a turnaround strategy, focusing on cost efficiency, improved revenue collection, and debt restructuring to prevent further deterioration.
NAWEC’s financial crisis is a national concern, with risks of higher energy costs, increased debt, and service disruptions. As the Commission suggests, a comprehensive turnaround strategy is essential to prevent further decline and ensure the long-term stability of The Gambia’s energy sector.
