Gas project Will Create 7,500 Jobs

The West African Gas Pipeline which is to supply Nigerian gas throughout the sub-region is expected to create 7,500 in Ghana.

A treaty clearing the way for the construction of the project was signed by Nigeria, Togo, Benin and Ghana last January.

A Standard Chartered Bank quarterly anlaysis of African markets says agriculture continues to be the mainstay of the Ghanaian economy, employing about 60 per cent of the labour force and contributing 30-40 per cent of GDP.

Cocoa is the major cash crop. Services form the second largest sector, accounting for about 30 per cent of GDP the report says the project will therefore help the vulnerable secondary sector.

Facilitate structural reform and increase regional integration There is likely to be World Bank pressure to accelerate structural reform in the participating countries. There will be an increased need to strengthen financial management, implement credible sector strategies and increase transparency and accountability.

Increased industrial activity in the ports of Lagos, Cotonou, Lome and Ghana will likely facilitate existing government policies aimed at poverty reduction.

There have also been previous efforts at regional integration, notably in energy provision. A joint Beninois-Togolese monopoly imports electricity, mostly from Ghana’s Akosombo hydroelectric dam.

Increase government revenue and cut fuelling costs Governments involved in the project will likely receive revenues from holdings, taxes and duties. The project cost is estimated at $500m with additional industrial investment estimated at $600m.

The governments of Benin, Togo and Ghana are also expected to save at least $700m over a 20-year period as gas is substituted for more expensive fuels in power generation. Actually, officials from the regional bloc, ECOWAS, have stated that the pipeline could reduce energy costs in the countries concerned by between 20 to 25 per cent.

Saving fuel costs Ghana estimates that it will save around 15000 bdp of oil in fuel costs. Energy provision in Ghana and Benin has so far been inadequate and unreliable. This is thought to represent a serious constraint on the countries’ economic development and the search for alternative sources has been a priority.

An analysis of the budgetary positions of the countries involved in the project reveals a significant budgetary imbalance. The project should therefore broaden the tax base to provide more fiscal revenue.