EU Assists Ghana

The European Union (EU) has disbursed about 35 million euros (an equivalent of 70 million Ghanaian cedis and approximately 52 million dollars), to Ghana for economic stabilisation.

A statement issued by the Delegation of the EU in Ghana in Accra last Monday said, this followes a financing agreement signed between Dr. Kwabena Duffuor, Minister for Finance and Economic Planning and Mr. Gary Quince, Director, Sub-Saharan Africa, Caribbean and Pacific Regions of EU's EuropeAid Co-operation Office.

It said the agreement is part of a new mechanism created by the EU in 2009, the Vulnerability Flex (V-Flex), to support the most vulnerable and adversely affected African Caribbean and Pacific (ACP) countries by the global financial crisis.

The V-Flex works pre-emptively, based on forecasts of fiscal losses and other economic and social vulnerability criteria, helping to ease the impact of the crisis rather than acting after the damage is done.

"The V-Flex illustrates the capacity and willingness of the EU to deliver critical support with a very short lead time," it said.

The statement said Ghana is among those ACP countries benefiting from the new V-Flex instrument because the crisis has indeed affected the economy, particularly in terms of a decline in economic activities, of reduced credit to the private sector and in the flow of private remittances from abroad.

"As it was forecasted, the favourable prices for cocoa and gold commodities have not been enough to help Ghana mitigate the negative impact of the financial and economic crisis," it added.

It said the assistance is expected to have a significant impact on Ghana's fiscal sustainability in 2009, closing a significant percentage of her financing gap; adding" it should not only help Ghana to mitigate the effects of the crisis but will also allow her to maintain priority public expenditures, especially in the social and health sectors".

The statement said the V-Flex funds being channeled through the Multi-Donor Budget Support (MDBS) Framework will complement the EU 174 million budget support allocation to Ghana, under the Millennium Development Goals-Contract (MDG-Contract). Participating donor partners in the MDBS are; African Development Bank (AfDB), World Bank, EU, Germany, France, UK, Canada, Denmark and Netherlands.

The MDG-Contract was signed by the EU and Ghana in July 2009 to be implemented over a six-year period from 2009 to 2014.

Source: GNA