Government will have to look elsewhere for financial support for its spending in 2013 as the Kingdom of the Netherlands has decided to withdraw its contribution to budget funding support.
This means that Ghana will lose more than €25 million in terms of budget support from the Netherlands Government for the year 2013.
The Netherlands has contributed to Ghana’s general budget support since 2003, amounting to €187.8 million.
A breakdown on the official website of the Embassy of the Kingdom of the Netherlands indicates that in the year 2003, a total amount of € 7.3 million was used to support Ghana’s budget, €16.5 million in 2004 while €10 million was received in 2005.
In 2006, the government of Ghana took delivery of €14.7 million and in 2007 an amount of €25 million was received by the country. It received €24.3 million and €25 million in 2008 and 2009 respectively.
The data also show that in 2010 a total amount of €25 million was devoted to support Ghana’s budget while an estimated €20 million and €25 million were provided in 2011 and 2012 respectively.
Dr Ton van der Zon, First Secretary and Environment and Water Advisor at the Embassy of the Kingdom of the Netherlands in Ghana told BUSINESS GUIDE that his government took a general decision to stop budget support to all countries including Ghana.
He disclosed this to the paper after speaking at the opening of the third annual civil society review of the natural resources and environment sector in Accra.
Explaining further, Dr Zon said, “We do not see sufficient results from the direct budget support that we have been doing over the years.”
Consequently, the new policy decision, which takes effect at the end of 2012, would affect many developing countries who depend on the Netherlands for their public spending.
“We intend to go back to specific programme funding where we can easily assess the outcomes,” explained Dr Zon.
“We want to work more with decentralized government systems instead of the central government with the aim of ensuring development sustainability.”
The new approach, he said, would enable communities to take ownership of projects and programmes, stressing that they would have a part to play in sharing the cost of some of the development projects at the local level.
He said it would ensure behaviour change at the community level where most development projects are expected to be undertaken by government free of charge, adding, “They have to pay. You know nothing is for nothing.”
The Environment and Water advisor hinted that the Netherlands would focus on water issues in Ghana, saying it was undertaking a Water, Sanitation and Hygiene (WASH) programme for Ga West and South in the Greater Accra region and another in Elmina in the Central region.
Additionally, “we also have an Integrated Water Resources Management programme for Densu River and the Kankum national park.”
The Netherlands, in collaboration with the Forestry Commission, is also considering developing the Atiwa Mountain and watershed into an national park.”
Multi-donor budget support (MDBS) in Ghana started in 2003.
Presently, 11 donors contribute through the MDBS. These are: UK via DfID, Switzerland, Japan (JICA), Germany (KfW), World Bank, African Development Bank, France, Netherlands, Denmark, European Commission and Canada (CIDA).
In 2008 a new joint framework arrangement was signed between the donors and the Government of Ghana, which details the underlying principles, mutual obligations and operational procedures.
The main counterpart in Ghana is the Ministry of Finance and Economic Planning.
Every year, a Performance Assessment Framework (PAF) is agreed and this contains a selection of targets for the proceeding tree years.
However at the end of each year, the overall progress regarding poverty reduction and reforms is evaluated against the set targets during the annual review.
This is done through a so-called holistic assessment, which includes a broad dialogue on progress, detailed assessment of the targets and the assessment of the macro-economic performance.
In 2009, the dialogue on the side of the Government of Ghana was led by the Ministry of Finance and covered 13 sectors, including education, health, public sector reform, energy and public finance management.
By Emelia Ennin Abbey