EU supports Ghana with 41.8 million Euro

Accra, July 14, GNA - The European Union (EU) on Wednesday disclosed that it has disbursed a total of 41.8 million Euro to the Government of Ghana through the Multi-Donor Budget Support (MDBS1) framework for the 2010 fiscal year.

"This disbursement is in the context of the Millennium Development Goals Contract (MDG-Contract) and the Food Facility instrument," a statement issued by Delegation of the European Union to Ghana made available to the Ghana News Agency in Accra revealed.

The MDG-Contract, which is the 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 the Government of Ghana in July 2009.

Under the financing agreement of the MDG-Contract, the EU is to provide a total of 174 million Euro as general budget support to Ghana over the years 2009 to 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.

The statement explained that the 2010 disbursement follows the satisfactory conclusions of the 2009 MDBS annual review, as well as the demonstrated commitment by the Government of Ghana towards attaining macro-economic stability, implementing the Ghana Poverty Reduction Strategy II (GPRS II) and in improving the country's public financial management.

According to the EU, budget support is one of the three focal areas of cooperation between the European Union and Ghana, which 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 a total of 69 million Euro as budget support to the Government of Ghana.

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

The statement noted that further to this, the EU is also 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 in order to improve the effectiveness of aid.