EU sets modalities for €40M support for Ghana

The European Union (EU) has set out clear modalities regarding sector distribution and concentration of the €40 million it granted Ghana last month to support its drive in achieving Sustainable Development Goals (SDGs).

This was contained in the action document for budget support programme, financed by the 11th European Development Fund (EDF) – the EU’s main instrument for providing development aid to underdeveloped areas including Africa, which aims to promote investment and job creation under Ghana’s SDGs contact with the EU.

Under the proposed SDG contract, operationalizing 12 percent of the EU-Ghana National Indicative Programme, out of the total facility released, €39,100,000 representing 98 percent will be used to support Ghana’s budget whereas the remaining €900,000 will be used for complementary support. This policy direction is expected to be implemented over a budget period from 2019 to 2021.

Specific objectives have been identified as priorities and key areas of concentration of the facility. They include promoting domestic and foreign private investment to enable all businesses most especially start-ups as well as Small and Medium-sized Enterprises (SMEs) to spearhead economic transformation through the creation of an acceptable business climate and investment environment. This would in turn create more employment and work opportunities.

Also, strengthening Public Finance Management (PFM) system, instituting strong measures to fight against corruption, poverty and boosting domestic revenue mobilization are part of the thematic areas of concentration.

The budget support aims to serve as leverage to accelerate the implementation of structural reforms which are considered to be essential for strong, inclusive and job-creating growth for Ghana’s economy.

According to the EU, the objectives of the SDG contract are consistent with the European Consensus on Development which aligns European development action with the achievement of SDGs by 2030; the EU Joint Cooperation Strategy for Ghana 2017-2020 and the EU’s External Investment Plan.

The three key development priorities which are being supported through the 11th EDF in Ghana for a total facility of €323 million are governance (€75 million), productive investment for agriculture in the Savannah ecological zones (€160 million) and employment and social protection (€75 million).

The EU is Ghana’s major trade partner, accounting for about 46 percent of the country’s total external economic activities. Inflows of Foreign Direct Investment (FDI) into Ghana has considerably increased in recent times with Ghana among the top five recipients of FDI in Africa.

Meanwhile, Italy has supported the EU’s flagship initiative to de-risk sustainable energy investment in developing countries, notably the Sahel region and Sub-Saharan countries with €5 million boost.

The initiative aims to support investments to increase and improve access to modern, affordable and sustainable energy services in Africa.

By Dundas Whigham