Ghana Holds Emergency Meeting Over Nigeria’s Threat To Stop Gas Supply

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In a desperate bid to avoid extreme power shortages in Ghana, the country’s officials yesterday had an emergency meeting, seeking ways to stop Nigeria from carrying out her threats.

It will be recalled that the Nigerian National Petroleum Corporation (NNPC) said it will cut gas supply by 70 percent to Ghana’s main power generation company by Friday due to unpaid debts of $181 million.

“A high-powered government delegation led by the Minister for Power Kwabena Donkor is currently in Nigeria having discussions on this very important matter,” Petroleum Minister Emmanuel Buah told a news conference. There was no immediate comment from NNPC.

Power cuts have raised the cost of doing business and angered voters at a sensitive time for President John Mahama’s government ahead of what is expected to be a tough re-election battle next year.

Mahama has vowed to end the power cuts by the start of next year and Donkor has said he would resign if the problem has not been fixed by then.

The government’s room for manoeuvre is limited, however, under the terms of an aid programme with the International Monetary Fund it is following to restore balance to its economy.

Ghana was for years one of Africa’s economic stars but falling global commodity prices have blunted the value of its gold, cocoa and oil exports.

Its fiscal problems include inflation of up to 17.4 percent in September, a currency that has fallen sharply in the last two years and a debt-to-GDP ratio of around 70 percent with what economists say are high debt service costs.

The Nigerian threat is a sign of budgetary stress and the strain of energy sector reform in Ghana, experts said.

“It is extremely embarrassing for the government. It touches on credibility … Every investor will be looking at that and saying, ‘Is this a country to do business in?'” Ben Boakye of the Africa Centre for Energy Policy think tank told Reuters.

In the long term, Ghana aims to increase domestic gas production with new gas fields to meet rising demand and reduce its dependence on imports.

“In the next decade, 80 percent of our source of power will come from thermal generation with gas as the critical feed stock,” Buah said, adding that government will also modify a pipeline so offshore gas can feed power stations east of Accra.

Nigerian gas flows to Ghana through the West African Gas Pipeline Company’s pipe that runs via Benin and Togo. VRA buys the gas to fire power plants mainly in the east of the country.

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