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09.07.2004 Business & Finance

Ghana, EU sign budgetary support agreement

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Accra, July 9, GNA- Ghana on Friday reiterated its commitment to maintain a stable, positive macroeconomic environment despite the pressures of the election year.

The country would also work hard to achieve the single digit inflation by the end of the year as promised in this year's budget, Mr Yaw Osafo-Maafo, Minister of Finance and Economic Planning said in Accra.

"We need to redouble our efforts to accelerate growth which would enable us achieve sustainable development," he said.

Mr Osafo-Maafo said this when he signed a financing agreement of the Poverty Reduction and Budgetary Support (PRBS) Phase Two, which would make available to Ghana, 682 billion cedis (62 million Euros) budgetary support and related technical assistance to sustain Ghana's policies towards enhancing economic growth and poverty reduction. Mr Stefan Frowein, Head of Delegation of the European Commission in Ghana, signed for the European Union (EU).

Mr Osafo-Maafo said government would ensure that it did not borrow more than the 10 per cent of revenue collected in the previous year as stated in the West African Monetary Zone criteria.

He said the government was fully aware of the huge pressure in election years, which had seen the massive reversal of economic gains. "We are keen on maintaining the track record we have chalked over the last four years and not to relapse into a situation that would bring pain and hardship to our people."

He welcomed the input of the EU in providing budgetary support, since this puts the Ghana government in control of affairs. Ghana has benefited from the EU budgetary support facility since 1992. The latest was a grant of 37.8 million Euros in 2002, the last tranche of 15.85 million Euros (174.3 billion cedis), which would be released this year.

The Finance Minister urged the EU to ensure that this years' tranche is released on time.

"As a country, we have no option but to mobilise the necessary resources to implement priority programmes to achieve sustainable development," Mr Osafo-Maafo said.

He said Ghana was making strenuous efforts to reach the completion point of the HIPC initiative this year and meet the convergence criteria for the West African Monetary Zone.

He said Ghana had pursued various reform programmes with the view to ensuring transparency, accountability and good governance over the years.

Government has passed a number of laws aimed at improving the accountability and transparency of public financial administration. Key among them are the Local Government Service Law, the Procurement Law, the Financial Administration Law and Internal Audit Agency Law.

Mr Frowein said the continued dialogue with members of the multi-donor budget support group had brought the commitment to a high standard of partnership. This has brought a number of development partners to engage in common dialogue, common review process and convergence towards a common assessment framework.

He said the 62 million-Euro grant to be disbursed over the next three years focuses on sustaining macro economic stability, encouraging growth and improving service delivery in priority areas of the GPRS, especially in the health and education sectors. It is also to strengthen public finance management, Mr Frowein said.