Flag of Ghana (left) and France
Ghana and the French Government yesterday signed a 21 million euro Debt Relief and Development Agreement in Accra.
Ghana's Debt repayments to France over the next three years are being converted into a grant facility in support of the country's budget under the Multi Donor Budget Support framework (MDBS).
This forms part of Ghana's debt cancellation after reaching the completion point of Highly Indebted Poor Countries Initiative (HIPC), this is the second of its kind and it covers 2008 to 2010, the first phase covers 2004 to 2007. The third Agreement for the same amount will cover 2011 to 2013, in all the debt to be cancelled by the French Government would total â‚¬ 63 million.
The funds are expected to be disbursed to finance the implementation of activities under the Ghana Poverty Reduction Strategy (GPRS) I and II. The agreement of the conversion into grants is an additional effort by France to ease Ghana's debt burden.
Both the French and Ghana Government agreed on the fact that these grants would be used as France's contribution to the MDBS, in order to support the implementation of the GPRS and the reinforcement of the macroeconomic stability of the country.
Signing the agreement, the Deputy Minister for Finance and Economic Planning, Professor Gyan Baffour noted that 'France has in recent times supported Ghana through bilateral co-operation effort in infrastructure development, agriculture and provision of water and sanitation project and programme.'
He commended the French government for the effort and added that it is equally worthy that the quantum of aid Ghana is receiving from France is on the increase.
The French Ambassador, His Excellency Pierre Jacqemot who signed for his government pointed out that when France looked at the results achieved by Ghana in terms of Economic Growth and Poverty Reduction, the decision to allocate Debt Transformation to the MDBS was a good choice by the French Government.
'MDBS is a great tool for funding the GPRS 2 while being an exceptional forum for dialogue between the Government of Ghana and its Development Partners on key sectoral and crosscutting issue', he said.
This decision he said confirms the strong commitment of France in supporting the development strategy of Ghana.