HomeEnergyGhana power crisis worsens, Nigeria cuts gas supply

Ghana power crisis worsens, Nigeria cuts gas supply

Power crisis
The Ghana power crisis is set to worsen following Nigeria’s gas supply stoppage

Ghana – Ghana’s Volta River Authority says Nigeria had cut gas supply to Ghana over a +US$100 million debt, which is set to further cripple the country’s power supply and worsen the Ghana power crisis.

The cut is likely to cause a 600 MW decline in power as gas is used to power the following thermal plants in Tema: Asogli Plant (220 MW), Cenit Plant (110 MW), Tema Thermal 1 Power Plant (110 MW) and Tema Thermal 2 Power Plant (50 MW).

Volta River Authority (VRA) was established on April 26, 1961 under the Volta River Development Act, Act 46 of the Republic of Ghana, with the core business to generate and supply electrical energy for industrial, commercial and domestic use in Ghana.

Nigeria supplies Ghana gas via the West African Pipeline Company (WAPco). Nigeria’s gas supply to Ghana has not been constant. Disruption to the supply has been due to sabotage attacks on pipelines in Nigeria and sometimes due to payment delays by Ghana.

Ghana’s power crisis

The power situation is getting worse as many areas in the capital Accra experienced at least 12 hours of power cut regularly, in some areas 24 hours, on the basis of a load-shedding schedule. The power crisis has resulted in some firms laying off workers and scaling back production.

The Ghana Chamber of Mines has said that the on-going power shortages would damage production levels if the situation persists at length.

According to the International Monetary Fund (IMF), the emergence of large fiscal and external imbalances, compounded by severe electricity shortages, has put Ghana’s prospects at risks.

In recent years, a ballooning wage bill, poorly targeted subsidies and rising interest payments outpaced rising oil revenue and resulted in double digit fiscal deficits. These imbalances have led to high inflation, a decline in reserves, a significant depreciation of the Cedi and high interest rates, weighing on growth and job creation.

Growth decelerated markedly in 2014, to an estimated 4.2 %, driven by a sharp contraction in the industrial and service sectors. This was due to the negative impact of the currency depreciation on input costs, declining domestic demand and increasing power outages.

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