Here’s how Ghana plans to settle outstanding gas debts by February 2016
- Felicia Omari Ochelle
- Oct 22, 2015
- 2 min read
Ater the recently concluded meeting between Ghana and the Nigerian gas company concerning a convenient plan to settle outstanding debts, Ghana has till February next year to pay up. The Nigerian gas company has set the end of February 2016 as the deadline for Ghana’s Volta River Authority to clear its outstanding debt of $171.5m. The Ghanaian government already settled $10 million last week.
According to Kweku Sersah, a spokesperson for Ghana’s Ministry of Power, Ghana’s state power generating company, the Volta River Authority, will settle the debt to Nigeria’s N-Gas in three installments starting in November. However Sersah also stated that the terms for this were still being finalized. “The high-powered delegation that went (to the Nigerian capital, Abuja) was able to negotiate for Nigeria Gas (N-Gas) to continue to supply the country the needed gas.”
Ghana’s deal with Nigeria was to receive a contractual 120 million standard cubic feet of gas daily. However Africa’s largest economy, which has so far been supplying Ghana with an excess of 140million standard cubic feet per day of gas, last week threatened to cut gas exports due to the government’s failure to settle outstanding debts to the Nigerian gas authorities. Ghana’s Minister for Power, Kwabena Donkor, led a government delegation to Abuja that began talks on last week with N-Gaz, a Nigerian consortium, and other stakeholders in a bid to avert the threat, said Harriet Wereko-Brobby, WAPCo spokeswoman.
The power sector crisis in
Ghana has created considerable consequences for the emerging economy. With nearly 25 percent of its supply coming from Nigeria, the threat to cut supply by nearly 70 percent would have worsened problems for a country which already faces electricity blackouts. It would also have raised the cost of supply. The supply received from Nigeria, although not enough, has greatly impacted power supply in Ghana over the last couple of weeks. Also, Ghana’s problems may be connected to a strain in its fiscal balance, one of the reasons why the country is currently partaking in an International Monetary Fund programme.
The present situation in Ghana which is characterized by huge power infrastructure gaps and consequent sketchy power supply has raised the cost of doing business. This has caused mistrust between voters and President John Mahama’s government ahead of a highly contended re-election battle next year.
N-Gas is owned by Shell Petroleum Development Company, Chevron Nigeria Limited in partnership with the Nigerian National Petroleum Corporation.
Source: Venturesafrica.com
By: Felicia Omari Ochelle
