‘MCC’s Work in Africa’

Introduction

I am very pleased to have the opportunity to present to you today the U.S. Government’s Millennium Challenge Corporation’s commitment to Africa’s development, growth and prosperity.  Many thanks to Congressman Donald Payne for organizing this important event and for inviting me to attend.  I had the great honor of joining Congressman Payne in Monrovia this past July to witness the signing of MCC’s $15 million threshold program with Liberia—a program that is investing in key elements of Liberia’s development, including land rights and access, girls’ primary education and trade policy.

I appreciate this opportunity to share a few thoughts about MCC’s work in Africa, including the critical role MCC plays in building Africa’s infrastructure. 

U.S. Commitment to Africa

Let me put MCC’s work in context. It should be no secret to this audience that the United States, as a whole, is committed to Africa. As President Obama said during his historic visit to Ghana, global prosperity is tied to Africa’s prosperity.  America’s own prosperity and security are linked with that of developing countries, including those in Africa.  For this reason, the Obama administration is focusing policies and programs in Africa on five key priorities:

• democracy and governance
;
• conflict mitigation;
• economic growth and development;
• health; and
• transnational issues such as terrorism, illicit drug trafficking, and climate change.

 

MCC’s Commitment to Africa

The work of the Millennium Challenge Corporation is a critical component of the U.S. Government’s focus on economic growth and development in Africa.  And, let there be no mistake about MCC’s commitment to Africa.  The numbers speak for themselves.

• Of MCC’s entire portfolio, $5.2 billion—or 70 percent—the vast majority—benefit the people of Africa.
 
• The continent is the largest recipient of MCC grants: We have active compacts in 11 countries and have funded smaller threshold programs in 9 countries.
 
• Our grants fund African-designed and implemented reforms, programs, and projects in a wide range of sectors, including agriculture, transportation, education, healthcare, power, finance, and land management.
 
• African partners are investing nearly 60 percent of their total MCC grants in transportation and agriculture, vital sectors for long-term growth, food security, and trade.
• And, MCC’s mandate to reduce poverty through economic growth in Africa underpins progress on all the Millennium Development Goals. Only with sustained increases in income can families overcome poverty and meet their basic needs in terms of health, education, and equal opportunity for women and girls.

Yet, our commitment to Africa exceeds even the sheer magnitude of our financial assistance. It is also grounded in MCC’s innovative way to award development assistance that creates sustainable conditions for growth in Africa that extend well beyond the life of any grant funding we may provide.  MCC’s emphasis on good governance, country ownership, and accountability for results also lays the groundwork for sustainable development well beyond meeting the MDGs by 2015.

• Our model is performance-based, so we partner with countries that are taking on the tough work of reforming their policies, fighting corruption, practicing good governance, investing in the health and education of their citizens, and creating a favorable investment climate.  In fact, MCC’s investment in Africa represents a good news story for the continent as it identifies African partner countries that have made a commitment to sound policies.
• Our model demands results, so we want to work with countries that embrace the accountability, transparency, and responsibility necessary to deliver tangible results from our investments of U.S. tax dollars.  And it is central to our work that achieving results also means that women are included in the solutions.  As the Millennium Challenge Corporation’s point person for the integration of gender equality in the programs we fund, I firmly believe that the results we seek from every MCC project require that women and men be equal champions of their development. In Lesotho, for example, we worked to ensure that gender equality in economic rights was legally guaranteed before we made our investment.  This led to the passage of the Legal Capacity of Married Persons Act.  Before the new law, married women in Lesotho were considered legal minors and could not enter into a contract; incur a debt; register property in their name; or buy, sell, or use property as collateral without permission from their husbands or a male relative.  The Gender Equality Project, funded through Lesotho’s MCC compact, is conducting training on this new law to explain the benefits of gender equality to the country’s long-term development and economic growth.
• And, what sets MCC’s model of development apart is that partner countries themselves determine how best to invest their MCC grants to meet pressing development priorities.  This approach creates solutions by and for Africans.

 

MCC’s Commitment to Africa’s Infrastructure

In large number, African countries themselves are choosing to invest their MCC grants in infrastructure as a core development solution. Landlocked African countries, for example, cannot trade regionally or globally if they do not have reliable infrastructure to move their goods efficiently.  Yet, only about 30 percent of sub-Saharan African roads are paved.  As a result, poor transportation links within and between countries are crippling Africa’s competiveness.  It’s no wonder that most of MCC’s partner countries have chosen to invest in infrastructure for their economic development and growth. That’s why more than 3.5 billion dollars of MCC grants are invested in African roads, ports, bridges, and airports necessary for productive capacity.

• Tanzania, for example, is investing in trunk roads to increase commerce, connecting the seaport of Tanga with Horohoro at the Kenyan border to reach the major port of Mombasa.
• Mali, a landlocked country that depends on air routes for trade, is investing part of its MCC grant to improve its airport and increase freight and passenger traffic.  This includes making the institutional changes to ensure the effective management, operation and maintenance of the improved airport over the long-term.
• Mozambique is investing its MCC grant in water supply and sanitation projects—a critical part of a community’s basic infrastructure.  This will provide access to safe, reliable water and sanitation services to increase productivity and reduce water-borne diseases.  This will also move the country closer to achieving the MDG of expanding safe drinking water.

 

Reliable infrastructure allows African countries not only to trade and compete but also to attract private sector investment, the ultimate engine of long-term economic growth.  The private sector, after all, brings innovative financing and technical expertise that can dramatically increase the sustainability of our efforts to promote economic growth and development.

 
• In Ghana, for example, we already see how MCC’s investment in infrastructure is creating the foundation for long-term growth.  Ghana is investing its MCC grant in a range of aid-for-trade activities—from improving irrigation infrastructure, to building post-harvest cold storage facilities, to rehabilitating major roads.  This is boosting agricultural productivity and better linking Ghanaian pineapple and vegetable farmers—many of whom are women—to markets in Europe. And, sound infrastructure is attracting the private sector too.  We already see major agribusinesses exploring ways to partner with MCC-supported farmers in Ghana to maximize exporting opportunities. This will create additional opportunities for local farmers, who will see their incomes and standard of living increase not because of MCC’s assistance, but because of the private sector activity MCC’s assistance attracted.

Conclusion

Our MCC partnerships throughout Africa are adding to the continent’s progress.

• MCC’s approach is a catalyst for reform and private sector-led development.
 
• We can—and are—creating stronger economies in Africa by motivating sound policies.
 
• We are helping African countries achieve the MDGs.
• We are expanding trade capacity and engaging the private sector for the long-term.
 

And, building Africa’s infrastructure is one tangible way we can surely promote economic growth. This will move us closer—figuratively and literally—to achieving our shared vision for global prosperity and economic growth that benefits us all, Americans and Africans alike.

Thank you very much, and I look forward to our discussion and your questions.