The Government of Liberia (GoL) has received a little relief in the amount of EUR 6 million in budgetary support, provided by the the European Union, amidst the huge resource challenges that the country is faced with.
The EU transferred a non-reimbursable grant amounting to EUR 6 million (around USD 7 million) to the Coalition for Democratic Change Administration at the end of August, a release from that continental body disclosed earlier today.
This grant, however, arrived on 12 September 2018 in the GoL revenue account to support the budget of the Republic of Liberia.
The transaction was the first under the EU’s new budget support programme called “Moving Liberia forward – Improving service delivery and public investment”, the release noted. The agreement was signed in May 2018, following the inauguration of President George Manneh Weah after a peaceful 2017 Liberian legislative and presidential elections that led to the first transition of power from one democratically elected leader to another since 1944.
The program, which is part of the 2014-2020 National Indicative Program, was already adopted by the EU Member States in November 2017 and covers three years.
Disbursement of this first payment comes after a positive decision of the Budget Support Steering Committee of the European Commission’s Directorate-General for International Cooperation and Development in July 2018.
The EU budget support offers a platform for dialogue with the partner country (Government, national oversight bodies, civil society, private sector, and other stakeholders) on policies and their financing, objectives and results, consistent with the principles of ownership, transparency and accountability.
Ambassador Hélène Cavé, Head of the European Union Delegation to Liberia, said: “I am very happy that we managed to provide this EUR 6 million budget support to the Government. We hope it will help to move Liberia forward and put people first by providing essential services and investment to the benefit of Liberian citizens who are facing challenging times. Sound economic policies and the formulation of a realistic pro-poor agenda will be at the heart of our policy dialogue in the coming months.”
She added “Budget Support is another instrument the EU uses to strengthen good governance, accountability and transparency in addition to our projects supporting external audit implemented by the General Auditing Commission (GAC) and access to information.”
Meanwhile, the State-building Contract has a total value of EUR 27 million (approx. USD 31.5 million) over three years. The EU contribution is allocated as follows:
EUR 24 million – General budget support
EUR 3 million – Support measures in the areas of Public Financial Management and statistics
Indicative timeline for disbursement:
2018 – EUR 6m fixed tranche subject to meeting general conditions for EU budget support
2019 – EUR 3m fixed tranche subject to general conditions, EUR 6m variable tranche linked to specific conditions
2020 – EUR 3m fixed tranche subject to general conditions, EUR 6m variable tranche linked to specific conditions
The general conditions of the Financing Agreement are:
- Formulation, approval and satisfactory progress in the implementation of a successor public policy and continued credibility and relevance thereof;
- Implementation of a credible stability-oriented macroeconomic policy;
- Satisfactory progress in the implementation of PFM Reform Strategy and Action Plan;
- Satisfactory progress with regard to the public availability of timely, comprehensive and sound budgetary information.
The six specific conditions are related to the following domains and indicator headings:
- Domestic Revenue Mobilization
- Business climate: Trading Across Borders
- Budget credibility for service delivery: Spending Entity Performance
- Improvement in access of de-concentrated services: De-concentrated service delivery through County Service Centers
- Improved controls, prevention and prosecution of corruption: State of procurement practices of Ministries and Agencies and management of public investment
- Transparency: Asset declarations of public officials
In both 2019 and 2020, EUR 1 million is linked to each specific condition.