African Economies Improve with Aid from Compacts with U.S.

Through its development programs and "through policy reforms that are vital to economic sustainability, MCC is helping Africans to help themselves," Bent told the House Foreign Affairs Subcommittee on Africa and Global Health, which was holding hearings on MCC's progress on the continent.

Thus far, the U.S.-chartered organization has signed project agreements called "compacts" with five African countries - Benin, Cape Verde, Ghana, Madagascar and Mali - totaling $1.5 billion. Another $800 million has been approved for Mozambique and Lesotho for a total of $2.3 billion in the development pipeline for Africa.

Billions of dollars more are in the offing, Bent said.

In addition to the "strong record on Africa" already established by MCC, Bent said, "We anticipate an even stronger push to fight poverty in Africa in the coming months."

With sufficient funding - and Congress has pledged $1.8 billion for the coming year - he said MCC was in a position soon to sign compacts with Burkina Faso, Morocco, Namibia and Tanzania worth a further $2.2 billion resulting in an investment of $4.6 billion in 11 African nations.

In addition to compacts aimed at infrastructure like roads, schools and health clinics - e typically five years in length - MCC also awards "threshold" grants to nations on governance and anti-corruption issues meant to bring them up to eligibility standards. Those grants last for two years. MCC has awarded $91 million in threshold grants to six African countries - Burkina Faso, Kenya, Malawi, Tanzania, Uganda and Zambia.

MCC grants are limited to countries with a per capita income of less than $3,465 a year, a condition most of Africa's 53 nations meet. Already, grants are helping to increase pineapple production in Ghana; fight corruption in Kenya and Zambia; build and rehabilitate roads in Cape Verde; upgrade Mali's international airport and educate girls in Burkina Faso, Bent told lawmakers.

Commenting on African's input into the projects, Bent said, "MCC does not work with all poor countries, just those ready to engage with us who can use the money well." That means agreeing to undertake governmental and economic reforms that make the projects sustainable and beneficial to all of society.

"The partnerships between MCC and African countries exemplify the new vocabulary of responsibility in development," he explained. Although MCC "does not tell our African partners what they need ... we expect African countries to take the lead" in developing and implementing programs.

They do this by making the necessary reforms in government and their economies that make them eligible for MCC grants. This means opening the political process, expanding educational benefits, loosening market restrictions and fighting corruption, Bent said.

The advantage is that "such profound responsibility holds African governments accountable not just to their own people, but also to American taxpayers" who ultimately pay for the grants, Bent said.

Americans will be willing to continue such assistance, he concluded, if they see "partner countries committed to the tough choices necessary to invest in themselves and to make the promise of poverty reduction ... a transformative reality for the poor."

According to Tony Carroll, vice president of Manchester Trade Ltd., "MCC represents a unique opportunity to foster investment in infrastructure on a scale unprecedented for U.S. development assistance to Africa in the past 30 years."

Manchester Trade Ltd. is a Washington-based consulting firm on international trade and investment issues.

Looking at the compacts with Ghana and Benin, Carroll told the subcommittee, "It is clear that investments in roads, port facilities and agricultural infrastructure can create a platform for export growth among both large and small-scale producers."

MCC, like the African Growth and Opportunity Act, also has the chance of becoming a "legacy program" for the United States, he said, because "it is not only a government-to-government but also a people-to-people initiative."

On that level, MCC is like the President's Emergency Plan for AIDS Relief, he said, "because it is an example of the compassion of the American people and our willingness to respond boldly to Africa's challenges."

The full text of Bent's prepared testimony is available on the subcommittee Web site, as is the full text of Carroll's prepared testimony.

E-MAIL THIS

PRINT THIS