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Budget support in Ghana: reducing poverty through partnership
"It
is clear that Ghana is one of the few sub-Saharan countries with the potential
to move from lower to middle-income country status in the foreseeable future",
said US Ambassador Pamela Bridgwater at a recent meeting of Ghana's
development partners.
Ghana has also made steady progress in tackling poverty over the past few
years. Income poverty declined from 42% in 1997 to 35% in 2003. The Country is
considered an ‘island of peace’ in the West Africa Sub-Region and its recent
democratisation process has offered opportunities for freedom of expression
The Ghanaian Government receives most of its foreign aid through multi-donor budget support, or MDBS. It's a mechanism used by donor countries to pool funding which is then
spent directly by the Ghanaian government on health, education, infrastructure
and more.
And MDBS is more than a pooled funding arrangement. It provides:
- a structure for discussion between Ghana and donors about priorities for poverty reduction and growth
- a shared approach to assessing progress
- greater predictability for the Ghanaian government in planning its budget; and reduces the administration involved in dealing with different donors.
At the meeting of Development Partners, it was concluded that if the current $1.2 billion package is implemented well, up to $5 billion for the 2006-2009 period may be available.
Does budget support work?
We
think it does - it has contributed to economic stability and provided a platform
for growth. It has also helped Ghana's government to allocate resources to
priority areas.
For example, spending on poverty reduction increased by 73% from 2002 to 2004. In 2005, the Government of Ghana announced a policy to make basic education in all public schools free and it is expected that the Gross Primary School enrolment which has increased from 83.8% in 2002 to 86.3% in 2004 will further increase.
The Country is considered an ‘island of peace’ in the West Africa Sub-Region and
its recent democratisation process has offered opportunities for freedom of
expression.
However, progress on other development indicators is less impressive. Under five
mortality rose from 100/1000 in 2002 to 111/1000 in 2004. Maternal mortality
stood at 215/100,000 in 2002 and has not changed since. Some elements of the
democratic process still need to be reformed.
The Ghanaian government will shortly implement their plan to make information
about budget support more transparent to its citizens. A website, more editions
of the quarterly
newsletter (see above), briefing sessions for stakeholders and radio discussions will be
organised in 2006.
-
BBC
coverage: Former beacon of hope makes strides (March, 2005)