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Ghana receives €41.8 million budgetary support from EU

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The European Union (EU) in Ghana has disbursed about EUR 41.8 million to government through Ghana’s Multi-Donor Budget Support (MDBS) framework this year.

A statement issued in Accra on Friday by the European Union Delegation to Ghana, said the disbursement is under the Millennium Development Goals Contract (MDG-Contract) and Food Facility instrument.

The MDG-Contract, EU’s new approach under the 10th European Development Fund (EDF) for longer term and a more predictable general budget support, was signed by the EU and Government of Ghana in July 2009.

Under the financing agreement of the MDG-Contract, EU is to provide about EUR 174 million as general budget support to Ghana between 2009-2014, with an overall objective of contributing to sustainable growth and poverty reduction in Ghana so that the country can attain middle-income status including the achievement of the MDGs.

It said the 2010 disbursement followed the satisfactory conclusions of the 2009 MDBS annual review, as well as the demonstrated commitment by government towards attaining macro-economic stability, implementing the Ghana Poverty Reduction Strategy II (GPRS II), and in improving the country’s public financial management.

Budget support is one of the three focal areas of cooperation between the European Union and Ghana.  Contrary to a project approach, budget support involves the transfer of financial resources directly to the Government Treasury to complement government’s own domestically generated revenues to facilitate the implementation of the national budget and its associated public expenditure plans.

In 2009 alone, the EU disbursed about 69 million Euros as budget support to the government.

The MDG-Contract (EUR 174 million) together with other complementary instruments (EUR 15 million Food Facility and EUR 35 million Vulnerability-Flex disbursed in December 2009) brings the size of EU’s current budget support programme in Ghana to about EUR 224 million.

Further to this, EU is committed to providing more support in the strengthening of Ghana’s institutions and systems with a key focus on Public Finance Management.  This is particularly in view of the increasing need for more robust national institutions and systems to improve the effectiveness of aid.

Direct budget support to Ghana over the period 2008-2014 is part of a broader EU aid portfolio of more than 420 million Euros, or about GH¢800 million.

Other important sectors for intervention include transport and interconnectivity for about EUR 80 million, governance, and non-focal areas such as trade.

The EU was one of the first signatories to the Memorandum of Understanding on MDBS signed in June 2003 and revised in 2008.

Currently, the MDBS has 11 participating donor partners, namely African Development Bank, Germany, France, UK, World Bank, EU, Canada, Denmark, Netherlands, Switzerland and Japan.

Source: GNA

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