Will Mozambique be Africa’s next big growth economy?

Posted on April 6, 2012 by Patrick Fine, Vice President for Compact Operations

Patrick Fine, MCC's vice president of compact operations, recently visited compact project sites in Mozambique and left optimistic about the country's economic future.

Nampula Province in central Mozambique is 2,200 kilometers north of the capital Maputo, about the distance from the East Coast to the Mississippi River. The countryside is marked by granite domes that tower hundreds of feet off the lush plains and by isolated mountains that rise up in surreal silhouettes worthy of artist Shane Devries. The land is not heavily populated, and villages are simple collections of traditional thatched-roof rondavels plastered with mud from ubiquitous conical ant hills. Rural electrification has not yet reached most of these villages, roads are simple dirt tracks, most people still fetch water from rivers, and boys stand by the roadside holding out bags of freshly shelled cashews for sale.

You can see signs of growing prosperity, including the results of MCC’s $506 million partnership with Mozambique: Our investment has helped build hundreds of village water points; pave major routes to facilitate agriculture, mining and commerce; and upgrade and expand straining municipal water and sanitation systems.

A year ago, these projects were seriously behind schedule and over budget, causing MCC and the Government of Mozambique to create an action plan to overhaul the approach for completing the work within the five-year deadline. I was impressed by the way Mozambique’s management authority, MCA-Mozambique, had consistently met its implementation milestones since the revised plan was adopted in March 2011.

Last week, with only 18 months remaining in the compact, I visited Nampula to get a firsthand view of what is being accomplished.

I was encouraged by the road and water system construction underway and came away with increased confidence that Mozambique will complete its work on time. In one rural community down a narrow 13 kilometer dirt track, I inaugurated a new borehole and water pump that serves 700 community members and will eliminate the need for women and children to spend up to two hours a day fetching water.

In the town of Nampula, I witnessed the distribution of property titles that give people secure property rights for the first time. The ceremony took place in an open neighborhood square where local officials called out names; the property owners came forward from the large crowd, signed a ledger and took their titles. At the end of the ceremony a number of people started to angrily call out, demanding their titles. The officials explained that the titles would be distributed each day that week. I found this spontaneous demonstration of the demand to have a title a reassuring indication of the value of MCC’s investment.

While my focus was on the MCC-financed projects, what really caught my attention was the extraordinary economic opportunity in Mozambique. Already, Mozambique exports electricity from the largest hydroelectric dam in Africa, and it still has unexploited capacity. A Portuguese contractor working on the MCC road project drove up in a Ford Ranger and had American-manufactured scientific equipment in its materials lab. Recently an American company, Anadarko Petroleum Corporation, announced it had discovered one of the world’s largest reserves of natural gas off the northern coast; the center of the country holds huge deposits of coal, and as more exploration takes place it is very likely that other minerals will be found in commercial quantities. Anadarko has plans to invest approximately $20 billion over the next five years! A Brazilian mining company is already shipping coal and has announced a $6 billion expansion.

I see all sorts of opportunities, from village hardware stores, hair salons and groceries to the suppliers and services that new investments in mining will require. Seen in this light, American investments in basic infrastructure are prescient. And a U.S. company is the supervising engineer on the drainage activity in Nampula city—where one of the main customers and beneficiaries of the new water system is Coca-Cola.

But far more important than market opportunities created by individual MCC-financed projects are the market opportunities that will open up for U.S. goods and services if Mozambique’s economy takes off. Road-building and mining equipment, chemicals and a spectrum of products and services will be needed to build this economy. Now is the time for U.S. companies to invest in establishing a presence in the country so that they can be competitive. 

The government is implementing business-friendly reforms—such as the MCC financed land reform program—and there is a still-untapped entrepreneurial spirit among the youth. Mozambique’s economy has already been growing at nearly 8 percent per year over the past several years and is on the verge of an economic era that could transform its villages and create prosperity and opportunities not only for one of the world’s poorest populations but for the companies and individuals intrepid enough to join an economy just taking off.

I left Mozambique with the impression that almost everything is in place for it to become the next big growth economy in Africa.

Land rights bring economic development in Mali

Posted on February 7, 2012 by Jon Anderson , Resident Country Director, Mali

Secure land tenure is a key to poverty reduction. It can improve access to credit, increase incentives for better land management and investment, and allow people the ability to capitalize on their assets.
 

In some African countries, land “grabs” by large companies are a growing concern for small farmers, many of whom lack formal title to the land their families have used for generations.  In the struggle for land resources with big players, poor farmers are often on the losing end.

But in Mali, MCC is helping the government strengthen the land rights of small farmers.
Prior to the MCC-funded Compact in Mali, formal land titling was almost unheard of in rural areas. The Mali Compact’s Alatona Irrigation Project is changing this by employing an integrated approach to agricultural development to bring almost 13,000 acres of intensively irrigated agricultural land into production and provide secure land rights for almost one thousand farming families. 
 

The Project is allocating most of the twelve-acre farms it develops to the people who used or lived on it prior to the Project, with the rest going to small farmers from elsewhere in Mali.  In addition, the Project is providing support to ensure that smallholder farmers have what they need to succeed, from infrastructure like housing, markets, latrines, schools, health centers, and wells for potable water, to services like agricultural training and access to credit. An improved road will also provide local families better access to markets in which products can be bought and sold.
 

The land component of the Project strives to incorporate women into the formal economy partly by providing them with land for market gardens and giving them the chance to be listed as owners on land titles to twelve-acre farms. As a result of this and other efforts to include women in Project activities, women are emerging as a force in the local economy, striving for better lives for their daughters and sons.  Some of the highest yields to date have been produced by women farmers.
The Mali Compact serves to enhance the property rights of local families and communities, thus helping the poor and vulnerable to participate in sustainable economic growth. MCC is proud to support such efforts.

Holcim Awards acknowledges MCC project for innovation and sustainable construction

Posted on September 28, 2011 by Rick Gaynor, Director of Property Rights and Land Policy

Last month, MCC’s project for Place Lalla Yeddouna in the Medina area of Fez, Morocco was awarded an Acknowledgement Prize by the Holcim Awards, a prestigious international competition that recognizes innovative projects, future-oriented concepts, and sustainable construction.

The Medina of Fez, a UNESCO World Heritage Site, is one of the most densely populated areas in the world, home to thousands of artisans who ply their trades as their families have for generations, producing the exquisite pottery, leather, metal, textile and wood crafts for which Morocco has come to be known.

MCC and the Government of Morocco are working to address the poverty, poor working conditions and environmental challenges in the Medina through an ambitious project to revitalize Place Lalla Yeddouna, a public square on the banks of the Fez River where copper workers and other artisans produce and sell their goods. The project aims to stimulate economic growth by redeveloping Place Lalla Yedouna in a way that addresses dangerous working conditions and safety hazards and renovates the Medina into a true center of commerce and community activity.

The Holcim Awards awarded a prize to the MCC-funded project in recognition of its transformation of this unique and previously neglected site on the banks of the Fez River. The Holcim Awards jury believes that improvement of Place Lalla Yeddouna will be a catalyst for development of surrounding areas, with positive social impacts that will extend far beyond the site’s boundaries.

Renovation of Place Lalla Yeddouna was designed by mossessian & partners and Yassir Khalil Studio, architectural offices based in London and Casablanca, respectively. In early 2011, these firms won an MCC-funded international design competition created to solicit original design proposals for the renovation; 176 teams representing over 90 countries submitted proposals.

MCA-Morocco, the Government of Morocco entity implementing the MCC compact, conducted consultations with the people of Fez at various stages – before and after the original design competition – to provide input on the future of Place Lalla Yeddouna and the needs of residents who would be affected by the project. These consultations generated unprecedented communication between civil society and government about the future of the Medina.

Place Lalla Yeddouna is an exciting project that will have a positive and important impact in Fez and Morocco. Construction will begin in spring 2012, and is expected to be completed in fall 2013. We look forwarding to posting project updates here soon. Read more about the Holcim Award.

MCC is Supporting the Rule of Law in Benin and Mali

Posted on June 2, 2011 by Melvin F. Williams, Vice President, General Counsel and Corporate Secretary

Melvin Williams with land title recipients in Mali.

The Millennium Challenge Corporation (MCC) uses 17 independent, transparent indicators to measure countries’ commitment to democratic governance, investments in people, and economic freedom.  One of those indicators measures performance on the rule of law, which among other things, measures the effectiveness, independence and predictability of the judiciary; the protection of property rights; and the enforceability of contracts.  As MCC’s General Counsel, this is an area of great interest to me, so I was especially pleased to see the rule of law at work in Benin and Mali, two MCC partner countries in West Africa.

I started my visit in Benin, where one part of MCC’s $307 million Compact is designed to boost investment and private sector activity by increasing access to the justice system.  During my trip, I visited the new, MCC-funded Legal Information Center (LIC).  When completed, the LIC will, for the first time, serve as a center for disseminating court decisions, laws, case records, and other legal information to the people of Benin, which will improve transparency and “demystify” the law for its citizens.

The MCC-financed construction of this primary instance courthouse and three others like it will bring justice closer to the people and will provide the technology required to help deliver it more quickly.  Computer-based case management reforms have already demonstrated their potential to accelerate decisions in existing tribunals.

MCC is also financing the construction of five new courthouses, and I was fortunate enough to visit one courthouse under construction.

I also had the opportunity to see another benefit of MCC’s investment: a computerized case management system.  These new courthouses and the case management system promise to enhance the rule of law by increasing the speed and efficiency with which cases are processed and adjudicated in Benin.  MCC’s compact funding is already delivering results: the average time required for a trial court to reach a decision has been reduced from nine to six months -- for courts of appeal, the time has been reduced from 23 to 10 months.

I then traveled to Mali, where MCC is working with the government on a $461 million Compact that focuses on improvements to the Bamako airport, and a large, highly-integrated agriculture project in the Alatona region on the country.  As part of the agriculture project, the Government of Mali is providing land titles to small famers for the first time. (Read American Investments in agricultural productivity and airport renovation lead to growth in Mali.) During my trip, I participated in a ceremony to distribute land titles to small farmers in the Village of Feto.  As a measure of MCC’s efforts to improve gender equality, a number of these farmers decided to hold legal title in both the husband’s and wife’s names.  A few of the titles were given to women only, which represents a major advance.  Providing these farmers with ownership of their land is critical to the continued success of the agricultural project, as farmers who own their land are more likely to maintain and improve it.  Moreover, as owners, they can use the land as collateral, which they could not do previously.  Also, land ownership is a part of the Government of Mali’s effort to de-centralize authority.  Rather than land being controlled from the capital, these land title reforms will empower the people who are actually working the land.  This effort is intended to be a model for other areas in Mali.

I’m honored to have seen first-hand the impact of MCC’s investments in Benin and Mali, and how they are strengthening the rule of law.