The European Union continues to support diversification of sugar industry in St. Kitts & Nevis

The European Union disbursed EC $52.7 million (15 million euro) between October and December 2012 as direct Budget Support to the Government of St. Kitts and Nevis as part of the EU’s assistance following reform of its sugar regime. The grant aid is aimed at assisting the country in diversifying its economy away from sugar agriculture into value added and competitive areas. These payments, in particular, were made based on St. Kitts and Nevis attaining targets related to macro-economic stability, public financial management reform and the implementation of its National Adaptation Strategy.

The EU Head of Delegation, Mr Mikael Barfod, said that "the high level of achievements made by St. Kitts and Nevis in the implementation of the Sugar Budget Support Programmes reflect the strong commitment shown even within the context of the present downturn in the global economy."

The EU Head of Delegation, Mr Mikael Barfod, said that “the high level of achievements made by St. Kitts and Nevis in the implementation of the Sugar Budget Support Programmes reflect the strong commitment shown even within the context of the present downturn in the global economy.

In particular, the Government of St. Kitts and Nevis has created the policy basis for a number of key reforms ranging from sector strategies (approval of a TVET Policy, a Social Safety Net Strategy, the completion of a credible and comprehensive Poverty Reduction Strategy, the approval of a Labour Market Action Plan) to public management (approval of a Civil Service Bill, ongoing work to bring up to date the audited annual accounts of a number of Public Corporations) and economic affairs (increase in provision of State land to farmers for agricultural use, and the maintenance of the share of budget expenditures social services at levels at least as those of 2007).

A total of EC $126.7 million (36 million euro) of direct budget support has been paid to the Government of St. Kitts and Nevis under the Accompanying Measures for Sugar Protocol countries during the period 2008-2013. This assistance has gone towards supporting the implementation of the National Adaptation Strategy aimed at enhancing economic diversification and social development in response to the closure of the sugar industry.

In parallel, St. Kitts and Nevis and the EU have been formulating a follow-on Budget Support programme in the area of poverty reduction and social protection, private sector development and employment and human resources. When approved, this new programme will ensure further Budget Support commitments to the Government of St. Kitts and Nevis for fiscal years 2013-2015.

Budget Support entails the transfer of financial resources by donors to the national treasury of a recipient country upon demonstration of results in implementation of supported strategy. Compared to traditional modes of aid delivery such as project related, budget support promises greater country ownership, reduced transaction costs, better donor coordination, scaling up of poverty reduction and potentially greater development effectiveness.

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