A Tribute to Process: The Port of Cotonou

Posted on August 22, 2011 by Valeria R. McFarren , Implementation Communications Officer

The Port of Cotonou is often described as the lungs of Benin: It breathes in revenue that gives life to Benin’s economy. In fact, 50 percent of Benin’s state income and 85 percent of all customs income originates there.

The port is also a gateway to landlocked West African countries. Ninety percent of all imports arrive through the port, with approximately 54 percent of them destined for hinterland countries such as Burkina Faso, Mali, and Niger. However, high shipping costs, low efficiency, and poor logistical facilities have limited the Port of Cotonou from becoming an even more important trade route, affecting its competitiveness as a springboard to neighboring countries. In 2006, the Millennium Challenge Corporation (MCC) and the Government of Benin, in recognition that an efficient port is a driver of GDP growth, embarked on an investment program of $188 million in port improvements. This $188 million project is part of Benin’s $307 million MCC compact.

I was in Benin two weeks ago visiting the port, and was impressed by the size and magnitude of this MCC/MCA-Benin project. To design and implement major infrastructure improvements and tackle institutional reform in Benin’s only port – within MCC’s five-year timeline – is a significant undertaking.

As the project concludes, port improvements will surely be visible, but all the sweat, tears, and hard work behind it may be forgotten.  This is my tribute to process: a behind-the-scenes look at the Port of Cotonou. 

 

• According to independent reports from the International Finance Corporation, around 450 people were employed for port reconstruction over the last two years.• 360,000 tons of rocks were hauled in to extend the jetty, a structure used to prevent the build-up of sediment in the port, by 300 meters.  This barrier significantly reduces the amount of sand in the port entrance channel area, reducing maintenance costs for dredging of the port. Construction was completed in December 2010, six months ahead of schedule. 
• The railway from Cotonou to Parakou, which had been non-functional for six years, was put back to work bringing rocks for construction to the port. This required approximately 30 trips. 
• Most of the rocks were supplied by truck. Approximately 100 to 120 trucks per day were loaded with rocks, each weighing one to three tons, and made the 150-kilometer trip from the quarry to the port.
• Three teams of trained divers were brought in to install scour protection at the base of the new quay wall. This protects the sea floor from forming destabilizing holes and ensures that more boats can continue using the port.
• One and half months of construction took place underwater.
• Rigorous safety protocols and environmental safeguards were in place—several months of staff time were dedicated to providing educational briefings about construction safety hazards and HIV/AIDS awareness. 
• Approximately 150,000 tons of concrete were used to build the three-foot-thick quay walls, parking areas, and over five kilometers of roads, including a three-kilometer road around the port.
• In coordination with the MCC/MCA-Benin project, the Government of Benin successfully negotiated a concession agreement with the French company Bolloré, who will manage a new container terminal at the port’s new quay for 25 years after the compact ends. The agreement includes $200 million in concession fees during the first eight years of operation, and investment in operating equipment and civil works of $256 million over the life of the concession.
• Dredging the port is almost complete. This project will increase the depth of the port basin from 12 meters to 15 meters, allowing up to 250-meter-long container vessels access to the new quay berth. Bigger boats mean more containers per boat, increasing volume of imports and exports.

MCC always operates with the bottom line in mind: How does this port contribute to economic growth? The answer is that a more efficient, higher capacity, and safer port reduces ships’ waiting time at anchor, waiting time at berth, and customs clearance times, which reduces shipping costs. For imports, this reduces the cost of goods to Benin and its neighbors. For exports, the reduction in shipping costs and time makes Benin – and its neighbors using the port -- more competitive and spurs their growth.

According to Henning Stehli, the port advisor hired by MCA-Benin, approximately 50,000 people earn a living off the port, both directly and indirectly. A few examples include fishermen, truckers, longshoremen, those buying and selling goods, and those involved in insurance and security. For instance, the dockers tend to be responsible not only for their immediate families but also those who live with them: children, parents, siblings, and extended families. Each docker’s income maintains a household of an average of 10 people. Even being conservative with figures, Henning sees at least half a million Beninese depending on the port for survival on a daily basis.
Henning sums it up nicely: “The MCC gift came to the right place... It is having and will have a great impact. However, excellent management is needed – the Government of Benin must gift its people back by making sure they take care and make good use of this investment.”

MCC’s Stage II Threshold Program in Albania Successfully Concludes

Posted on August 18, 2011 by Bruce Kay, Director of Threshold Programs for Europe, Asia, the Pacific, and Latin America

MCC completed its first $13.85 million Threshold Program in Albania in 2008. As a result of the success of the program, MCC approved a $15.7 million Stage II Threshold Program, building upon the accomplishments of the first.

The Stage II Threshold Program in Albania ended last month. The results of the Threshold Program in Albania should be a source of pride for all who worked to make it a success.

Already we can see a number of remarkable achievements that have modernized government operations, cut down on red tape for businesses and entrepreneurs, and strengthened governance and the rule of law in Albania.

Our partners at USAID, the agency administering the program on MCC’s behalf, recently released a series of web videos  that highlight some of the successes of the Stage I and Stage II Threshold Programs. The videos, in Albanian with English subtitles, focus on the establishment of an e-governance system, improvements to tax administration, the new business licensing and registration centers, and engagement with civil society.

These videos reflect Albania’s tremendous progress. Thanks to MCC support under the Threshold Program, Albania now has an integrated e-governance system serving to make public administration more efficient and less susceptible to corruption.

The system’s main features include:

1. A United Nations award-winning e-procurement system, which has expanded competition and reduced costs, and is now used for all government purchases over $4,000 in value;
2. A tax e-filing and e-payment system now used by two-thirds of all taxpayers, which has increased the public revenue while slashing corruption opportunities;
3. A one-stop-shop business registration system, which has decreased economic informality and, according to the World Bank/IFC’s Doing Business magazine (2009, 2010), improved Albania’s business climate by more than 70 places in the global ranking;
4. A single-window licensing system now used by most Albanian professionals and businesses to obtain their licenses; and
5. functioning joint investigative units that are now investigating and prosecuting dozens of organized crime and corruption cases, including one case involving a former deputy Prime Minister. 

The Stage II Threshold Program also developed a National Planning Registry, used now to manage and track building permit applications in five cities. It bolstered civic watchdog groups and helped them hold the Government of Albania accountable for maintaining the reforms ushered in by the Threshold Program.

It also created a myriad of now-functioning institutions that protect the interests of businesses and citizens alike, including a National Registration Center and branch offices in most cities, a National Licensing Center with branch offices, a Public Procurement Advocate, and a Taxpayers Advocate. 

When Albania launched its initial Threshold Program in 2006, it was classified by the World Bank as a low-income country. In a sign of progress, the country jumped to the upper middle-income category in 2010.

Albania’s income status now precludes the country from being a candidate for MCC assistance, but MCC recognizes the tremendous progress made through the two Threshold Programs implemented in Albania.

As noted above, USAID administered the program on MCC’s behalf, with further assistance from the U.S. Department of Justice. USAID/Albania and the Government of Albania were critical partners, and the Department of Justice OPDAT program deserves kudos for its work bolstering law enforcement mechanisms, now used with great effect.

For more information on Albania’s initial and Stage II Threshold Programs, visit MCC’s Albania page.

Funding Sustainable Agriculture Practices in Morocco

Posted on August 4, 2011 by Rachel Fredman, MCC Intern Morocco

Driving through the hills near Taounate in Northern Morocco is dizzying at times. With sweeping views of precipitous peaks and groves of olive and fig trees, one feels immediately transported to southern Spain. It’s disorienting to think that only a day before I was in a cool oasis flanked by date palms and sun-scorched desert. This is the geographical diversity of Morocco.

It is this geographical diversity that yields tremendously varied agriculture. According to the World Bank, the agricultural sector in Morocco employs about 40 percent of the nation's workforce, making it the largest employer in the country and about 15 percent of its total GDP.

About 70 percent of the poor live in rural Morocco, which results in a massive rural exodus toward urban areas like Casablanca or Rabat, or the European Union. Many of these urban economies, however, cannot support this migration and these people often find themselves selling tissue or other goods on the side of the road for lack of better opportunities.

Many of the agricultural practices in Morocco have led to massive amounts of soil erosion, which is often irreversible. In the rainy sections of the northeast of the country, barley, wheat, and other cereals can be raised without irrigation. Farmers default to these crops in many of the areas we are passing through, razing trees on the mountains and planting wheat in their place. Along with overgrazing, this is causing land degradation and serious desertification throughout the country. We often pass by a mountain that, once home to trees and native plants, is now crackling dry from soil erosion. This intense desertification in Morocco also increases water pollution. The loose topsoil causes an increase in runoff, which in turn increases the siltation levels of Moroccan reservoirs and the Mediterranean Sea and Atlantic Ocean.   

The Morocco Compact is addressing these issues with its ambitious Fruit Tree Productivity Project. This Project will rehabilitate about 55,000 hectares of existing rain-fed fruit tree orchards and expand fruit tree production on nearly 62,000 hectares of land. It aims to increase and stabilize the income of poor farmers by shifting to more valuable tree crops – from wheat to rain-fed olive, date and almond trees. Almost 70,000 households will benefit from higher productivity and increased incomes. Moreover, they will be provided training and technical assistance on improved crop husbandry techniques that will increase yields and alleviate soil erosion as well as strengthen links to markets.

We visited one such cooperative in a small village near Taounate to learn more about their program. 
 

 

MCC and the latest Development Assistance Committee peer review

Posted on August 2, 2011 by Sherri Kraham, Managing Director for Cooperation and Policy Improvement

Many people in the development community are digging into a new “peer review” of the U.S. Government’s foreign assistance programs that was released this week (you can read the whole thing here). After reviewing the report from the OECD’s Development Assistance Committee (DAC), we are thrilled at the positive feedback MCC received in the review.

The DAC puts peer reviews together regularly. The United States was reviewed this time, but every OECD country gets a turn. The idea is to help governments improve their approach to development assistance by providing a comprehensive, fair-minded assessment of their current efforts.

The DAC identifies MCC as a “leader” in the effort to measure the results of development assistance, calling the agency’s commitment to transparency “commendable.”

Here’s an excerpt: “Through the MCC, the US has shown that it can deliver development co-operation that is in line with the principles on effective aid. In particular, ownership, predictability, untying, unearmarked funding, and a strong emphasis on results are key characteristics of MCC’s approach. MCC also provides an incentive model that supports partner countries in their reform: it allocates aid based on a country’s policy performance, employing objective indicators to determine a country’s eligibility for funding.”

At MCC, we are always looking for ways to improve our effectiveness. Input from fresh-eyed outsiders like the DAC is critical in that effort. This new peer review makes clear that if we can continue to stay true to our founding principles, MCC will put the best practices in aid effectiveness to work in our partner countries.