Udenrigsudvalget 2012-13
URU Alm.del Bilag 208
Offentligt
FRAMEWORK MEMORANDUMBETWEEN THE GOVERNMENT OF GHANAANDDEVELOPMENTPARTNERS
1.1
This Framework
Memorandum
(FM) describes
the common
framework
for the
implementation of grant and loan agreements through the Multi-Donor Budget SupportProgramme (MDBS) to support the Growth and Poverty Reduction Strategy (GPRS 11)1.This FM replaces the previous one between the GovernmentDevelopment Partners (DPs) signed in Accra on 30 June 2003.of Ghana (GoG) and
1.2
This FM will be supplemented by individual arrangements between each individual DPand the GoG. The contents in the individual funding arrangements take precedence overthis FM. However, DPs will establish funding arrangements that are compatible with thespirit and provision of this FM.
1.3
This FM does not constitute an international treaty and is not intended to create legalcommitments.
1.4
Amendments to this FM can be made by way of an exchange of letters in terms acceptedby all DPs involved in the MDBS and the GoG.
1.5
When
implementing
this FM, the signatories
endeavour
to follow
international
recommendations and best practices as regards budget support.
2.1
The GoG and DPs consider the FM for MDBS as the common basis for support to theimplementation of GPRS II through the GoG's budget.
2.2
MDBS is open to other DPs who might wish to participate. The decision to participatedoes not imply that all participating DPs will be providing resources in any given year.However, it does imply that the spirit of this arrangementcurrently includes the African Developmentwill be respected. MDBSthe European
Bank, Canada, Denmark,
Commission, France, Germany, Japan, The Netherlands, Switzerland, United Kingdom,and the World Banle
2.3
The objectives of MDBS are:•to provide additional and more predictable budgetary resources to implement GPRSII and finance fiscal actions aimed at reducing poverty, reaching the MillenniumDevelopment Goals (MDGs) and promoting growth;•to increase aid effectivenessby harmonisingDPs' policies and procedures, by
minimising transaction costs and by fostering ownership, alignment, managementfor results and mutual accountability;•to enhance the performancemanagement (PFM) systems;•to facilitate the strengthening of institutional capacity for designing and executingdevelopment policies;•to promote an acceleratedimplementationof policy reforms and an enhancedand accountabilityof the GoG's public financial
performance in service delivery in order to reach development objectives;•to foster domestic accountability and transparency.
3.1
The GoG and DPs, to the extent compatible with their statutory mandates, consider thefollowing to be the underlying principles of MDBS for this FM:(i)(ii)(iii)(iv)Continuing sound macroeconomic policies and management;Commitment to achieving the GPRS II objectives and MDGs;Sound budgeting and PFM systems;Continuingpeace and respect for human rights, the rule of law, democratic
principles, and the independence of the judiciary; and(v)Good governance,accountabilityof the GoG to the citizenry, and integrity in
public life, including the active fight against corruption.Observance of the underlying principles is considered critical f~r the implementationthis FM.of
4.1
A set of growth and poverty reduction objectives, development
indicators and policy
reform measures, drawn from the GPRSII,is mutually accepted by GoG and DPs as theProgress Assessment Framework (PAF) and will be used by all signatories of this FM.
4.2 These development
indicators
and policy reform measures
are referred
to in this
document as 'targets'. Targets will be result-oriented, time-bound, specific, measurable,realistic, within the power of the GoG to achieve, and limited in number. The GoG andDPs will decide on the means of verification of the targets, including the necessarydocumentation. The achievement of a subset of the targets, hereafter called 'triggers', willdetermine the extent to which the single component or the performancedisbursed (see chapter 6).component is
4.3
DPs and GoG operate a multi-annual rolling PAF. The PAF is named by the year inwhich policy actions or indicators that are subject to assessment in the subsequent yearare referring to. For example, if policy actions or indicators are to be taken or achieved in'Year n', the PAF will be called'PAF n'. PAF targets for the outer years will beindicative.
4.4
DPs and GoG will endeavour to ensure complementarity
and coordination
between
MDBS and sector budget support arrangements. While recognizing that these constitutedistinct processes, the arrangements should be seen as mutually supportive. The MDBSpolicy dialogue will add value to and will be informed by policy dialogues at the sectorlevel, includingmajor policy objectivesand issues of crosscuttingnature or with
significant macroeconomic and budgetary implications.
5.1. The signatories have committed to coordinate reporting, dialogue and review missions.Regular dialogue among the signatories to the FM is essential for continued commitmentto the MDBS.
5.2. The review process for MDBS will be common for all DPs. Participants will meet on adecided schedule, aligned with the review process of the GPRS II and the budget cycle.The review will be organised and chaired by the Ministry of Finance&EconomicPlanning (MoFEP), and include representatives(including observers). Representativesparticipate or observe the review.of the GoG and the MDBS partners
from Parliament may be invited by the GoG to
5.3. The reView process
will be guided by the work of sector groups, including
the
conclusions from existing sector-level reviews. It will use information gathered throughthese and other ongoing processes to ensure that DPs do not set up duplicative reviews. Itwill endeavour to minimise additional work.
5.4. The review will include an assessment of overall progress in implementing the GPRSII,including macroeconomic performance, as well as progress against the PAF.
5.5. The overall progress in implementing the GPRS II will be assessed on the basis of theAnnual ProgresssatisfactoryReport and other existing central documents.performanceThe assessmentofor
macroeconomic
will be guided by an IMF instrument
arrangement. If the GoG is broadly on track in both areas, this'holisticassessment' willbe considered to be positive.
5.6. In addition, the documentation
for the reView will include, amongst others, regularexpenditures; existing PFM reviews,budgetstatement,and theagreed
reports on budget execution and poverty-reducingincludinga selected-flowsaudit;the annual
documentary evidence for progress achieved in the PAF.
5.7. In order to ensure a fully informed reView, the GoG will submit any outstandingdocumentation to DPs prior to the review.
5.8. The GoG and DPs endeavour to have joint and regular communicationstakeholders at key stages in the MDBS dialogue, including disseminationPAF and outcomes of the annual review.
withexternalof the final
6.1
The DPs' contribution consists of either a single component or two components (a baseand a performance component) each year. Decisions on the number of components andthe ratio between components will be left to the discretion of each DP.
6.2
The decision on the disbursement
of the base component will be based on a positive
holistic assessment (see paragraph 5.4). Neither the base nor the performance componentwill be disbursed if the holistic assessment is deemed unsatisfactory.
6.3
Progress against the triggers will determine the extent to which the single component orthe performance component is disbursed. When reviewing progress against the triggers,DPs may take account of the extent to which the trigger was achieved, the GoG's effortto achieve the trigger, any developments outside the control of the GoG that may haveaffected progress, and other key developments in the sector.
6.4
Disbursement decisions will be left to the discretion of each individual DP, however DPswill try to reach ajoint position.
6.5
In order to increase predictability and alignment with the budget cycle, DPs commit togive the GoG advance notice of the indicative MDBS funding for the following year, theamount of which will be announced directly following the completion of the respectivePAF assessment and in time to inform the GoG's formulation of the following year'sbudget. At the same time, DPs commit to provide GoG with planned figures for theirdisbursements in the outer years. The disbursement of both components will ideally bemade in the first four months of the following fiscal year.
6.6
Instalments will be deposited in a convertible foreign exchange account (the MDBSAccount) in the name of the Government held at the Bank of Ghana. Within 48 hours, theBank of Ghana will credit the Ghana Cedi equivalent (using the Central Bank (buying)
exchange rate on the date of 'purchase')budget revenue.
to the Central Treasury Account for use as
6.7
The Bank of Ghana will provide documentary evidence of the amount and date of theforeign exchangepaymentto the respectiveDP and the Ministryof Finance and
Economic Planning (MoFEP). MoFEP will acknowledge the amount and date of receiptof the Cedi equivalent in its Central Treasury Account, in writing, to the respective DPand to the co-chairs of the MDBS group.
7.1
The following audit arrangements will be established:•The Ghana Audit Service (GAS) carries out an independent annual external audit ofthe GoG Accounts. The annual audit report by the GAS should be provided to MDBSDPs as soon as it becomes available.•Further exercises will be carried out to complement GAS' annual audit. These includepublic expenditure tracking surveys, performance audits and GAS audit of selectedflows (with regards to the latter, MDBS development partners will continue to makefunding available for the purpose of the annual audit of selected flows which must becarried out to international standards).of these exercises will be coordinated.To the extent possible, the timing and content
8.1
The GoG will perform all procurement in accordance with national procurement rules,guidelines and procedures.
9.1
The GoG, in accordance with its rules, regulations, policies, and procedures, and subjectto the availability of funds, will:••Respect the underlying principles of this FM.Strengthen the monitoring and evaluation system that is used to assess progress on theimplementation of the GPRS II.•Implement the GPRS II and ensure that total expenditureand sector allocations
effectively reflect the GoG's growth and poverty reduction commitment and that thebudget is comprehensive.•Further strengthenPFM systems and processes,Framework(MTEF),includingprocurementand the
Medium- Term Expenditurecorruption.
and continue
efforts to tackle
10.1 To the extent possible and consistent with their internal laws, policies, procedures andindividual bilateral agreements with the GoG, DPs will:•Improve aid effectiveness,including the facilitationof greater GoG ownership,
harmonisation, alignment, result-orientation and mutual accountability.••Coordinate the timing of their disbursements with the GoG's budgetary requirements.Work closely with the GoG to coordinate with other dialogue mechanisms and aidmodalities.
10.2 The DPs will endeavour to follow the principles and procedures enshrined in the FM andreflect them in their bilateral funding arrangements with GoG to the maximum extent.These arrangementswill mainly provide further details on the obligationsof each
participant and the procedures for disbursing funds together with any standard conditionsfor development cooperation that the individual DP may have. The DPswillkeep suchgeneral conditions to a minimum.
11.1. The GoG and DPs concur that corruption undermines good governance and wastes scareresources. The GoG and DPs intend to cooperate closely in order to ensure transparency,accountability and probity in the use of public resources.
12.1 Any differences or controversies that arise in relation to the MDBS should be settled bymeans of dialogue and consultation between DPs and the GoG. The GoG and each DPwill promptly consult with the other participants whenever a DP proposes to suspend orterminate, in whole or in part, its support to the GPRS II through MDBS.
Dr. Anthony Akoto OseiMinister of StateMinistry of Finance&Economic Planning
Darren SchemmerHigh CommissionerHigh Commission of Canada
Flemming Bjork PedersenAmbassadorRoyal Danish Embassy
Guy SamzunCharge d' Affaires a.i.Head of Cooperation•Delegation of the European Commission
Pierre JacquemotAmbassadorEmbassy of France
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AGENCE
DEDlVElOPPEMENT
aflFRAN<;AISE
Joachim Schmitt
1PcJ-J\
Counsellor Development colperationEmbassy of the Federal Republic of Germany
I
Embassy of theFederal Republic of GermanyAccra
CO¶OPERATIONREPUBLICGHANAOF
Yutaka NakamuraCharge d' Affaires a.i.Embassy of JapanQIt.c:.d~~.
JAPAN
Michiel Bierkens~~Charge d' Affaires a.i.--Embassy of the Kingdom of the Netherlands
Koninkrijkder N ederlanden
Martin SaladinCounsellor andEconomic AdvisorEmbassy of Switzerland
SchweizerlscheConfederationConfedcrazloneConfederaziun
EidgenossenschaftsuisseSvizzeraSVlzra
StaatssekretariatSecretariatd'Etat
fur Wirtschaft
a
j'economie
secoD F ID
5egre'ariato di Stafa dell'economiaStat. Secretoriat for Economic Affairs
Mike HammondHead of DFID GhanaUnited Kingdom
Deparbnenl forInternationalDevelopment
Alieu JengResident RepresentativeAfrican Development Bank
Ishac DiwanCountry DirectorWorld Bank
