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Ghana settles $42m debt to Nigeria Gas Company

Ghana has settled the $42 million debt it owed Nigeria Gas Company (NGas), making it possible for the two countries to start on a fresh page.

 

The settlement of the debt, among other things, enhances the country’s quest to use clean fuel for its power generation and gives the two countries an opportunity for further discussions going forward.

 

A news report by Ghana Graphic quoted the Chief Executive Officer (CEO) of N-Gas, Mr Aliyu Aminu, as saying that settling the debt was a testament of the Ghana government’s commitment to deepen its long-standing relationship with the company and Nigeria

 

At a meeting with Ghana’s Energy Minister, Dr Matthew Opoku Prempeh, Aminu commended the leadership of the minister, saying “since he took office in March, the Nigerian petroleum company has experienced a deeper collaboration with the Ministry of Energy.”

 

He said it was a great relief that N-Gas’ debt of $42 million had finally been settled, adding: “We are confident the relationship between Nigeria Gas and Ghana would continue to thrive under your tenure as minister.”

 

On his part, Dr Prempeh expressed Ghana government’s commitment to key partnerships with all stakeholders and that the Ministry of Energy was resolved to work assiduously in that direction.

 

“The payment of this legacy debt was crucial because it provides the basis for a clean state for fresh negotiations, which are scheduled to take place in the coming weeks,” Dr Prempeh noted. He expressed the hope that the current synergy was a sign of good future between Ghana and Nigeria with regard to gas and its role in Ghana’s development.

 

The minister urged N-Gas to continuously improve the reliability and integrity in their service delivery.

 

The accumulation of the debt owed N-Gas started in 2014 due to the inability of VRA to pay the company. By the end of 2016, the accumulated total debt stood at $169 million. However, in 2017, through strategic government intervention programmes such as ESLA, tranches of payments were made to the company.

 

Ghana, at the Committee of Ministers meeting in Lome, Togo, in December 2020, made a commitment to settle the remaining debt this year and, therefore, on the back of that, on assumption of office, Dr Opoku Prempeh ensured full payment was made.

 

Recall that in 2018, Nigeria was compelled to reduce its gas supply to Ghana thermal power production by 50 per cent (to about 60 million cubic feet of gas per day), due to its $40.3 million debt.

 

Report from the country’s agency, Ecofin, stated that Nigeria had since the beginning of the year been sending about 60 million cubic feet of gas per day to Ghana through the West Africa Gas Pipeline Company Limited (WAPCo). This is less than half of the contractual volume agreed upon during the commissioning of this infrastructure in 2011 in Nigeria.

 

Kweku Awotwi, Board Chairman, Volta River Authority (VRA), the leading electricity producer in Ghana, noted that the contractual volume was 123 million cubic feet of gas per day and that it should help generate electricity in Ghanaian thermal power plants. He added that since the day the agreement was signed, Nigeria had never been able to send 100 million cubic feet a day

 

 

 

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