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08.03.2007 General News

UK, Ghana's Biggest Bilateral Aid Donor

By Daily Guide
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THE UNITED Kingdom (UK) continues to be Ghana's biggest bilateral aid donor, as it gives more aid to Ghana than any other African country.

British aid to Ghana has mostly been through the Department for International Development (DFID) and other agencies.
In 2006 for instance, Britain, through DFID gave Ghana a bilateral aid of £70 million.

In addition, UK continues to contribute tremendously to the global budgets of the main multilateral and international non-governmental development organisations operating in Ghana.

UK's advocacy for deeper and faster debt relief to developing countries helped establish the Highly Indebted Poor Countries Initiative (HIPC).

In 2005, Ghana received around $1.7 million as part of her HIPC relief from the UK Government.

In the same year, the British Government made a further commitment to debt relief by agreeing to repay 10 per cent of Ghana's repayments to the World Bank and African Development Bank.

This means that Ghana would benefit from the Multilateral Debt Relief Initiative (MDRI) in the order of $4 billion over the next 40 years from 2005.

Around the world, the purpose of UK's development assistance is to reduce poverty.

In Ghana for instance, Britain, through DFID, supports the Government of Ghana to come out with her own poverty reduction plan dubbed: “Ghana Poverty Reduction Strategy.”

In support of Ghana's Growth and Poverty reduction priorities, DFID is expected to provide about £210 million in aid to Ghana over the next three years, starting from 2006.

About 50 per cent of this will be provided directly to the Government budget as part of a multi donor funding arrangement (Multi Donor Budget Support, (MDBS) with ten other donors.

MDBS helps to give the Ghana Government greater predictability in planning its budget and reduces the administration involved in hosting different donor missions, and meeting various financial reporting requirements.

In early 2003, 10 bilateral and multilateral donors agreed to provide co-ordinated support to Ghana's budget, to help deliver the Ghana Poverty Reduction Strategy.

Under the MDBS, UK Government has provided £91.7 million in poverty reduction budget support from 2003 to 2005.

Overall Development Partner Budget support for Ghana is estimated at $300 million per annum. Out of this figure, DFID is expected to contribute £120 million over the three year budget support framework.