MULTI-DONOR BUDGET SUPPORT (MDBS) IN GHANA

Background Information

Introduction

Multi-Donor Budget Support (MDBS) is the name given to general budget support in Ghana. General budget support consists of Development Partners (DPs) transferring financial resources directly to the Government treasury to complement Government�s own domestically generated revenues and facilitate the implementation of the national budget and its associated public expenditure plans. The MDBS group in Ghana is made up of the following eleven DPs: the African Development Bank, Canada, Denmark, the European Commission, France, Germany, Japan, the Netherlands, Switzerland, UK and the World Bank.

The primary objective of MDBS is to provide additional and predictable financial resources to implement the poverty reduction initiatives of the Government in a harmonized manner and using country systems. MDBS also intends to contribute to the strengthening of institutional capacity for designing and executing development policies and fostering domestic accountability and transparency.

Initiated in 2002, the first Framework Memorandum (FM) was signed between the Government and nine DPs in June 2003. In July 2008, a new FM was signed this time including eleven DPs in support of the Growth and Poverty Reduction Strategy II (GPRS II). The FM provides the guiding principles for implementing budget support.

Guiding principles of the MDBS process include the maintenance of sound macroeconomic policies; commitment to achieving the GPRS II objectives and MDGs; continuing peace and respect for human rights; rule of law; democratic principles and the independence of the judiciary; sound budgeting and public financial management (PFM) systems as well as the promotion of good governance, accountability of the Government to the citizenry, including the active fight against corruption.