MULTIDONOR BUDGETARY SUPPORT (MDBS)

Principles

Multi-Donor Budgetary Support (MDBS) is the official development assistance (ODA) arrangement under which bilateral and multilateral development partners (DPs) collectively contribute to the budget of the Government of Ghana (GoG). Specifically, the donors channel funds towards implementation of the Ghana Poverty Reduction Strategy (GPRS).

This form of direct budget support represents a move away from the previous ODA approach in which individual donors funded selected sectors and/or projects.

How MDBS Works:

In March 2003, GoG signed a framework memorandum with nine DPs to govern the first year of budget support operations. The signatories included the African Development Bank, Canada, Denmark, European Union, Germany, Netherlands, Switzerland, United Kingdom and the World Bank. France signed on in 2005 to make 10 contributing donors.

The main goal of MDBS is to improve aid effectiveness. In this regard, all partners see a need to balance GoG�s desire to have timely and predictable disbursement of pledges with the DPs objective of encouraging reform. The MDBS agreement therefore requires bilateral DPs to disburse budget support in two equal parts (tranches). The first tranche, also called �base payment�, is made early in the year following a positive IMF review of the macro-economy. (GoG achieved this on May 9 for 2003 funds; December 2003 for the 2004 funds and June 20th for the 2005 disbursement).

REPORT
Over the four (4) year period DPs have shown their commitment to Governments agenda by contributing approximately $1148.93 billion ($245.9 million in 2003, $309.03 million in 2004, $281.88 million in 2005, and $312.12 million in 2006).

2006 YEAREND SUMMARY
Over the course of the year 2006, there were a number of notable events and achievements in Ghana. Here is a partial list: