Accra, Sept 3, GNA - Ghana and the United Kingdom (UK) on Wednesday signed an agreement under which the UK would deliver 250 million pounds grant to Ghana between 2008 and 2010.

The grant formed part of the 10-year partnership arrangement which resulted from discussions between President John Agyekum Kufuor and the UK Prime Minister Gordon Brown during the president's recent visit to the UK.

Minister of Finance and Economic Planning, Kwadwo Baah Wiredu, MP signed for Ghana and Mr. Douglas Alexander, MP and Secretary of State for International Development of the UK signed for his country. This was at the ongoing Third High Level Forum (HLF3) on Aid Effectiveness in Accra.

Mr. Baah Wiredu noted that the 250 million pounds assistance may take the form of financial aid to Ghana, high quality technical cooperation for capacity development, support through international organizations or civil society organizations and other innovative forms of development assistance.

"At least 95 per cent of this assistance will be directly aligned to and in support of the government budget," he said. The Minister said that was good news for Ghana as it meant that 95 per cent of the amount would be untied aid and could therefore be applied into sectors of the government's own choice without the usual inimical donor conditionalities.

Mr. Baah Wiredu acknowledged that the uniqueness of UK's assistance to Ghana was that it provided only grants with multi-year disbursement, adding that, the 80 per cent of such grants were channelled through the budget under the multi donor budget support (MDBS) mechanism, which committed donors to align aid flows to the Ghana Poverty Reduction Strategy (GPRS).

"The UK championed the MDBS during its inception and showed its commitment to it by providing Ghana with 110 million pounds between 2003 and 2006 and an additional 120 million pounds from 2006 to 2008," he said.

Mr. Baah Wiredu noted that the UK was Ghana's biggest development partner in terms of volume and spread of assistance across the various sectors of the economy, adding that, the main thrust of the UK's assistance to Ghana had been poverty reduction and the achievement of the MDG's, which was in line with the principles of the Paris Declaration on Aid Effectiveness.

He assured the UK that the government would continue to pursue prudent macro-economic policies, ensure sound financial management, increase transparency and public accountability and provide good governance and respect for human rights.

"I can also assure you of peaceful, free and fair elections this year," he said.

Mr. Alexander praised the government of Ghana for the prudent management of the economic, saying that, that was the attraction for increased aid from the UK to Ghana.

"We believe we have a credible development partner in the present government and for that we will only keep increasing our aid to Ghana," he said.

On the question of why donors focused on sectors like education and health, he said the rationale for that was human capacity building and education and health were major channels for achieving that purpose. "However we believe that as we focus on those two areas, it would free your own national resources, which could be invested in the other equally important sectors," he said. He expressed the hope that the discovery of oil and gas in Ghana would offer exciting prospects and bright future in terms of opportunities and better living standards for the people of Ghana. 03 Sept. 08