AMERICAN GIVING | Strengthening communities through generosity
06 February 2008
Millennium Challenge Corporation Reinforces Support for Africa
Selects Malawi and Mauritania as newest countries eligible for funding
Washington -- The Millennium Challenge Corporation (MCC) has selected Malawi and Mauritania as the latest African countries eligible to receive funding from its program to reduce poverty through economic growth, the Millennium Challenge Account.
Malawi now can begin the process of applying for a five-year grant, or compact, under the innovative MCC foreign aid program.
Mauritania is eligible to participate in MCC's two-year "threshold program," which is designed to assist countries that do not yet qualify for grants but are close to qualifying and have demonstrated a commitment to enact the reforms necessary to improve policy performance, which may eventually help them qualify for compact assistance.
The selection of Malawi and Mauritania "deepens MCC’s already clear commitment to support our African partners in the fight against poverty," said MCC Chief Executive Officer John Danilovich.
Of MCC’s 16 grant agreements, nine are with African countries -- Benin, Cape Verde, Ghana, Lesotho, Mali, Mozambique, Madagascar, Morocco and Tanzania -- and total approximately $3.8 billion, 70 percent of the agency's total grants to date.
"We anticipate up to two more compacts in Africa by the end of summer 2008 with Namibia and Burkina Faso," Danilovich told members of The Africa Society meeting in Washington in January.
In addition, seven countries in Africa have threshold agreements with MCC.
As an example of progress thus far as a result of MCC country support, Danilovich cited agricultural cooperatives in Madagascar where farmers are learning new techniques to make a successful transition to higher-value crops like geraniums, which are sold to produce high-value oil for use in soaps and perfumes. These products are allowing the farmers to access new markets and take advantage of the tariff-free provisions of the African Growth and Opportunity Act (AGOA), a U.S. law designed to spur African trade development. MCC's agreement with Madagascar is approximately $110 million.
Malians are using MCC funds to improve irrigation systems in the Niger River Delta and modernize the Bamako Airport, which will boost agricultural productivity and expand access to markets and trade.
And Cape Verde is using MCC funds to improve roads and bridges, which will strengthen transportation links, making it easier for people to commute to work or move goods to local and export markets.
In making its decisions about which countries to fund, MCC measures policy performance of candidate countries using 17 indicators.
These indicators measure countries’ demonstrated commitment to policies that promote political and economic freedom, investments in education and health care, control of corruption and respect for civil liberties and the rule of law.
MCC also considers countries' willingness to invest in building sustainable development capacity.
MCC "co-partners" with developing countries, "working shoulder to shoulder toward results," Danilovich said. While MCC provides the funding and technical support, its partner countries develop their own proposals and implement the programs being funded, he said.
Danilovich said that "while selection is an essential first step" toward achieving compact assistance from MCC, it does not guarantee funding. Countries must undergo a broad-based consultative process to develop proposals that address barriers to poverty reduction and economic growth.
Similarly, the MCC board of directors, which includes the secretaries of state and treasury, the U.S. trade representative, the head of U.S. foreign aid and members from the nongovernmental sector, also considered Liberia for eligibility for its threshold program and recognized the progress achieved under President Ellen Johnson Sirleaf and her government. The U.S. Agency for International Development has been supporting Liberia’s reform effort so that it may become eligible to receive larger MCC funding in the future, Danilovich said.
Since its inception in 2004, MCC has approved compacts totaling more than $5.5 billion with 16 partner countries. Total threshold spending to date totals $400 million.
