Following the threats of the Nigerian government through the NNPC to cut gas supply to neighboring Ghana because of a lingering $181 million debt, the Ghanaian government has agreed to clear off the debt latest by February next year.
The NNPC provides the Volta River Authority of Ghana with gas to power its electricity and other industrial facilities in the country, and the gas supply debt accumulated over the years with no action taken to settle it until Nigeria threatened to cut off supplies.
“The highlight of the agreement is that the total sum of gas supply debt will be cleared by February 2016 at the latest,” said NNPC spokesman, Ohi Alegbe, in a statement. “It would be recalled that Nigeria had threatened to cut gas supply to Ghana by 70 percent over a $181 million debt that had accumulated over the years.”
NNPC’s executive director, Ibe Kachikwu, met with Ghanaian President John Dramani Mahama together with his minister for power, Kbabena Donkor, and the parties agreed on Monday to the new concession to allow for installmental payment until the debt is cleared by February 2016.
The gas supply is channeled through the West African Pipeline Company, and used for energy production by N-Gaz – a joint venture of the NNPC, Shell, and Chevron.
Since Ghana is gearing up for presidential elections next year, gas for power is a major necessity and the government can’t afford to be cut off from it now. Power outages may cripple economic activity and affect both citizens and government.
President Mahama has promised his people to explore alternative sources of power supply, and this includes securing private sector partnerships to boost renewable energies such as solar and biomass. Ghana’s economic growth over the past decade has increased its need for stable power supply, and it is looking up to Nigeria to assist the development initiative.