The Millennium Challenge Corporation (MCC) of the United States has selected Mozambique for a second package of development support (known as a “compact”).
The MCC Board of Directors took the decision on Monday. MCC compacts are for five years, and are intended, the Board says, “to reduce poverty through targeted investments that increase economic growth”.
A press release from the US Embassy in Maputo said the news of the second compact was communicated to Mozambican President Filipe Nyusi by telephone on the same day.
The embassy release said “together with the almost 500 million dollars of development aid provided annually by the United States government, this choice of Mozambique by the MCC strengthens still further our commitment to effect a partnership with the country in promoting more inclusive economic growth and political reforms that strengthen the rule of law and democracy”.
Announcing the new compact for Mozambique, the MCC Chief Executive Officer, Sean Cairncross, said, “MCC works around the world to reduce poverty through economic growth—consolidating democratic and free–market reforms, and enabling public and private sector collaboration to create jobs, sustainable growth, and better economic opportunities within our partner countries.”
The first MCC compact was signed in 2007 and ran for five years. It was a grant of 506.9 million dollars, of which only 447.9 million (88 per cent) was spent.
The largest component was a water and sanitation project budgeted at 203.6 million dollars intended to improve access to safe, reliable water supplies and sanitation services. According to the MCC’s own summary of the first compact, project teams constructed more than 614 rural water points (boreholes with hand pumps), upgraded and expanded two municipal drainage systems, and upgraded and expanded two urban water supply systems.
But although the median household year-round trip time to the primary water source fell by 62 minutes and dry-season roundtrip time fell by 129 minutes, the MCC admits that this project had “no statistically significant impact” on health-related outcomes, household income or the poverty rate.
Road building and rehabilitation was to have taken 176.3 million dollars of the compact (although only 136.8 million dollars was actually spent). The target was to rehabilitate 491 kilometres on key stretches of the main north-south highway (EN1), but this target was eventually cut back to 253 kilometres. The work was not completed until December 2014, well after the end of the compact.
39 million dollars was earmarked for a land tenure services project and 17.4 million dollars to a farmer income support project.
The key aim of the latter project was to improve the productivity of coconut farmers in the central province of Zambézia by removing palm trees affected by lethal yellowing disease. MCC claims that more than 780,000 disease-resistant seedlings were planted and more than 15,000 farmers were trained in coconut pest and disease surveillance and control.
In the areas worst hit by the disease, the project “had a measurable and significant impact on households’ adoption of alternative crops”, but MCC admits that “the magnitude of the increase was small and did not result in an impact on household income”.
The delay in completing some of the projects in the first compact meant that Mozambique did not become immediately eligible for a second contract.
The MCC now claims that the first compact was brought to a successful conclusion in September 2013, and that “a new compact would build on the country’s continued commitment to sector reform and MCC’s strong relationship with the country”.
So far, there is no indication about what will be included in the new compact or how much money will be involved.
The MCC is an agency of the United States government, which was set up by the US Congress in 2004. It claims to be an independent agency that is not run either by the State Department or by the US Agency for International Development (USAID).
Source: AIM via Club of Mozambique