Ghana has been given up to the end of February 2016 to clear all outstanding debts owed Nigeria-based gas supplier Nigeria Gas (N-gas).
Ghana’s debts to the company amounted to about $181 million until the Volta River Authority (VRA) paid some $9.5 million last Friday. The debts cover the cost of gas supplied the authority and its transportation from Nigeria to Ghana.
VRA still has an outstanding balance of $171.5 million to pay N-Gas.
Last week, a government delegation met with officials from N-gas to negotiate payment terms after the West Africa Gas Pipeline Company (WAPCo) threatened to cut supply to Ghana. Reports indicate the meeting resulted in an agreement that the rest of the money be paid in three tranches, the last of which should be paid by the end of February 2016.
Currently, it would be difficult for VRA to secure funds from any bank in the country to offset the debt since they owe banks to the tune of over $1.3 billion.
At this point, Government, which is a 100% owner of the VRA, would have to step in to ensure Nigeria does not cut gas supply to Ghana and further worsen the dumsor situation. But having already taken a bailout loan from the IMF and seemingly unable to get many public sector employees caught up on their salaries, there’s a big question mark if Government even can find the money to pay off the debt.