The French Agency of Developement (AFD) tuesday signed the Second Financing Agreement of the District Development Facility (DDF) with the Government of Ghana (GoG).

The Agreement was signed by the Minister of Food and Agriculture, Hon. Clement Kofi Humado, on behalf of the Minister of Finance and Economic Planning, His Excellency Frederic CLAVIER for the French Ambassador to Ghana and for Bruno LECLERCby the Resident Manager of AFD.

Under the Agreement, AFD is providing a concessional loan of 21.0 Million Euros to co-finance the DDF for a period of three years. The District Development Facility (DDF) is a performance-based grant aimed at improving the ability of Metropolitan, Municipal and District Assemblies (MMDAs) to comply with the Government of Ghana (GoG) regulatory requirements. The DDF is jointly financed by the Government of Ghana, AFD and three other Development Partners namely CIDA, DANIDA and KFW.

The facility provides additional financial resources to the MMDAs based on the outcome of an annual performance assessment. MMDAs which meet the minimum conditions are given an Investment and Capacity Building Grant. All MMDAs are given funds to improve on their performance. The Facility is discretionary and funds are not earmarked or tied to specific sectors. MMDAs use it to finance their Annual Action Plans which include the provision of basic school infrastructure and sanitation facilities, markets, CHIPS compounds, rehabilitation of roads and the provision of water through boreholes. The Facility also provides resources to train MMDA core staff on procurement, financial regulations and accounting, revenue mobilisation, documentation and records management among others.

The DDF has not only provided additional financial resources to the MMDAs but has resulted in the improvement of their capacity to perform their mandate. With just 38% of the MMDAs qualifying for the DDF funds in 2008, performance of the MMDAs has consistently improved to a current level of over 90% each year.

AFD provided assistance to the Government of Ghana to start the DDF and contributed 21.0 Million Euros over a three year period beginning 2009 to 2012 to finance the first phase of the DDF. The continuation of the AFD to finance the DDF is based on the successful implementation of the DDF and what its system has brought on performance of the MMDAs.

Support to local Governments is one of the three sectors of concentration of France in Ghana with Energy and Agriculture. Aside the support from the French Embassy to the decentralisation process, on going AFD financing in this sector amounts to more than €200.0 million (around 450 million of Ghana cedis). This includes financing of Ghana Urban Management Pilot Project (GUMPP), urban transport, environmental sanitation and rural water/sanitation projects.