Ex-post evaluation of Macro Financial Assistance (MFA) Operation to Georgia (2009 – 2010)

Project Client

European Commission;



Origin Of Funding

European Commission;

Start Date


End Date




In July 2011, the Directorate-General for Economic and Financial Affairs of the European Commission appointed GHK Consulting and PMCG to undertake an ex-post evaluation of the Macro Financial Assistance (MFA) Operation to Georgia (2009 – 2010), based on a combination of quantitative and qualitative techniques notably, macroeconomic modelling, literature and documentary review, focus groups discussions, process tracing, and stakeholder interviews.


The three main areas of analysis covered by the ex-post evaluations were as follows:

  • Economic impact of the MFA on the economy of the recipient country (e.g. GDP growth, balance of payments, exchange rates, fiscal balances); with and without IMF involvement.
  • Value added by EU intervention (stand-alone and/or in combination with IMF intervention) provided through the operation.
  • Sustainability of the country’s external position as a result of the assistance.

MFA is a policy-based financial instrument of untied and undesignated balance-of-payments support to partner countries of the EU. It has evolved in recent years to also provide budgetary assistance to support the political and economic reform efforts of the beneficiary countries.

The primary objective of MFA assistance was to fill a foreseen residual external financing gap (or fiscal imbalance) bearing in mind the contribution from multilateral institutions (and respecting the principle of fair burden sharing between bilateral donors). A secondary goal was to introduce or reinforce structural reforms in the beneficiary countries with a view to achieving medium to long term macro-economic stability and external sustainability. MFA was implemented in association with support programmes from the International Monetary Fund (IMF) and the World Bank.

In 2009, the EU approved an MFA grant of EUR 46 million for Georgia. This MFA operation was part of the overall pledge made by the EU (of circa EUR 500 million) at the international donors conference in October 2008 to support Georgia’s post-war reconstruction and recovery efforts (following the armed conflict with Russia in August 2008). The MFA was designed to complement an 18-month USD 750 million Stand-By Arrangement (SBA) approved by IMF in September 2008.

The MFA operation included conditions relating to Public Finance Management (PFM) reforms, notably the strengthening of Georgia’s systems and capacity in the following areas:

  • Internal audit and control;
  • External audit;
  • Public procurement;
  • Budgetary processes.