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MULTI -DONOR BUDGET SUPPORT GHANA’S EXPERIENCE

MULTI -DONOR BUDGET SUPPORT GHANA’S EXPERIENCE. Introduction Background to the MDBS Objectives of the MDBS Achievements of the MDBS How the MDBS Works How Disbursements are made Facts and figures Institutional Frame work Challenges The future of the MDBS Conclusion.

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MULTI -DONOR BUDGET SUPPORT GHANA’S EXPERIENCE

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  1. MULTI -DONOR BUDGET SUPPORT GHANA’S EXPERIENCE Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana .ID MEP09034

  2. Introduction Background to the MDBS Objectives of the MDBS Achievements of the MDBS How the MDBS Works How Disbursements are made Facts and figures Institutional Frame work Challenges The future of the MDBS Conclusion THE MULTI-DONOR BUDGET SUPPORT. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  3. INTRODUCTION Multi-Donor Budget Support (MDBS) is the name given to general budget support in Ghana. General budget support consists of Development Partners (DPs) transferring financial resources directly to the Government treasury to complement Government’s own domestically generated revenues and facilitate the implementation of the national budget and its associated public expenditure plans. The MDBS group in Ghana is made up of the following eleven(11) DPs: the African Development Bank, Canada, Denmark, the European Commission, France, Germany, Japan, the Netherlands, Switzerland, UK and the World Bank. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  4. 2002 - START OF NEGOTIATIONS AFTER CG MEETING In 2003 Ghana signed a framework memorandum(FM) with nine DPs to govern the budget support operations Each year GOG and DPs negotiate and agree on a Policy Action Framework (PAF) document. This document sets out how government will be assessed within the coming year. It outlines the policy actions that government agrees to undertake as part of its growth and poverty reduction process. In July 2008, a new FM was signed this time including eleven DPs in support of the Growth and Poverty Reduction Strategy II(GPRS II). The FM provides the guiding principles for implementing budget support. BACKGROUND Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  5. OBJECTIVES OF MDBS The primary objective of MDBS is to provide additional and predictable financial resources to implement the poverty reduction initiatives of the Government in a : 1.Harmonized manner= to avoid parallel systems & a lot of missions and bilateral consultation. 2. Using country systems= to avoid high transaction cost 3.Designing and executing development policies= in line with GOG priorities 4.and fostering domestic accountability and transparency= Improve PFM Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  6. ACHIEVEMENTS OF THE MDBS 1. Donor funds can be predicted now, which has led to better planning and budgeting 2..There is quite improvement in the public financial management systems 3. There is a lot of improvement in the sector dialogue 4.Increased GoG commitments to agreed policy reform objectives 5. Lower transaction cost 6. Contributes to GoG development agenda through MDGs, and GPRS 5. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  7. HOW MDBS WORKS Policy Dialogue: GOG & DPs meet at the Sector Working Group level (SWG). CD of MOFEP co-chair this meeting. There 15 SWGs • Progress Assessment Framework (PAF): Discussions in the SWGs result in policy reform measures and specific growth and poverty reduction objectives drawn from the GPRS II being jointly agreed as MDBS targets. All of the targets from the SWGs are collated in a matrix or framework, called the PAF. Targets are meant to be results-oriented, time-bound, specific, measurable, realistic and are achievable. Assessment/Review: Every year, usually in May, DPs and Government assess progress against the PAF. The outcome of this assessment informs the disbursement decisions of DPs. Organisation: The MDBS group is currently made up of 11 DPs. This group is jointly chaired by the World Bank and an annually revolving DP. There is also a vice co-chair, who will assume the DP co-chair position after a year. The current DP co-chair is Switzerland, with Canada taking the position of vice co-chair. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  8. DISBURSEMENT OF FUNDS Funds are disbursed in two tranches (Components) The base tranche and The performance tranche THEBASETRANCHE The base tranche is disbursed between January to April after a positive IMF review of the macro-economy THEPERFORMANCETRANCHE The performance tranche is made following a comprehensive review of GOG implementation of policy actions. HOW DISBURSEMENT IS MADE. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  9. DISBURSEMENTS – LOANS VRS. GRANTS Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  10. PERCENTAGE OF GRANTS TO GDP & DOMESTIC BUDGET REVENUE Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  11. DONOR INFLOWS 2003-2007 Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  12. INSTITUTIONAL FRAME WORK- MOFEP Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  13. LEGAL FRAMEWORK • Clause 7: The Minister responsible for finance shall, at such times as Parliament may determine, present to Parliament any information concerning any discrepancies relating to:- • The granting of loans, their repayment and serving; • The payment into the Consolidated Fund or other public fund of moneys derived from loans raised on institutions outside Ghana. Article 182 of the 1992 Constitution • Clause 1: The public debt of Ghana shall be charged on the Consolidated Fund and other public funds of Ghana • Clause 2: For the purposes of this article, the public debt shall include interest on that debt, sinking fund payments and redemption moneys in respect of that debt and the costs, charges and expenses incidental to the management of that debt. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  14. MOFEP, CABINET AND PARLIAMENT Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  15. CONTROLLER & ACCOUNTANT GENERAL’S DEPT. AND AUDITOR GENERALS’S OFFICER Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  16. BANK OF GHANA Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  17. Coordination between the MOFEP,MDAs and Donors MOFEP BEFORE MDBS DONORS MDAs AGRIC EDUC HEALTH ENV Presented By DABONEATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  18. Coordination between the MOFEP,MDAs and Donors MOFEP AFTER MDBS DONORS MDAs AGRIC EDUC HEALTH ENV SECTOR WORKING GROUP MDBS SECRETARIAT GPRS

  19. THE CHALLENGES GOG loses a large proportion of expected ODA if it fails to meet agreed performance criteria. DPs on the other hand give up significant individual visibility than under their respective development. • Further reducing the transaction cost. • Improved implementation of policy actions • Better ownership of the process by all government agencies • How to get the remaining donors to sign on. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  20. THE FUTURE OF THE MDBS More efficient Public Financial Management System (PFM) to merit increase in quantum of resources through the MDBS. Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

  21. CONCLUSION Since its inception, MDBS has contributed approximately USD 2 billion to the Government of Ghana budget The MDBS constitute about thirty percent (30%) of total donor inflow to Ghana. The remaining seventy percent (70%)is project type funding, sector wide assistance(SWAP) and basket type funding. There is no doubt that the MDBS mechanism is a significant improvement in aid delivery. Programme aid is a preferred option for any recipient country and when is harmonized it is even better. THE END Presented By DABONE ATTA SNR: Head, GRANT/MDBS, MoFEP, Ghana

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