Poverty Reduction Budget Support

Budget support is the transfer of financial resources of an external financing agency to the national treasury of a partner country. These financial resources form part of the partner country’s global resources, and are consequently used in accordance with its public financial management system.

The EU provides Budget Support in two different forms: General Budget Support (GBS) and Sector Budget Support (SBS). GBS is designed to enable governments to implement their policies in general. GBS provided by the EU in Guyana aims mainly at strengthening the health and education sector.

In addition to the funds that are transferred directly to the Consolidated Fund of the government, there are funds available to help the government to improve their policies. These funds need to be used for technical assistance, to train staff, to assist staff with help from outside or to finance a specific short term task (consultants).
 
The overall objective of the GBS programme is the alleviation of poverty through sustainable development, including pursuit of the Millennium Development Goals (MDGs).

The more specific objective of the Poverty Reduction Budget Support Programme is twofold:

  1. To achieve meaningful progress, confirmed by agreed, broad-based indicators that guide the Government's spending in sectors where improvement is essential to achieving both PRSP objectives and MDGs (the programme contains indicators for the sectors health and education and for improvement of public finance management);
  2. To help the Government cover the budget deficit which, in turn, would reduce the need for external funding and free up potential repayment flows for development priorities.

The assistance is guided by general conditions in the field of macro-economic development, public finance management and the implementation of a PRSP which call for continuous policy dialogue and coordination between the EU Delegation and the Government of Guyana. The PRSP lays out Guyana's poverty-reduction strategy and is complemented by detailed plans in the key sectors.

The current Poverty Reduction Budget Support Programme funded under the 9th EDF (2004-2011) started with a first disbursement in 2004. The total value of the programme is currently € 39.7 million (roughly G$ 11.3 billion).

The European Commission is preparing a new General Budget Support Programme under the 10th EDF, worth € 30.2 million (GYD 8.4 billion) for the period 2012-2015.

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