Aid Effectiveness’ Debt to Africa

Posted on May 25, 2011 by Patrick Fine, Vice President, Department of Compact Operations

African countries have been at the forefront of the movement to make development aid more effective.   Many of the visionary leaders behind the path breaking Paris Declaration on Aid Effectiveness were African  and it was no coincidence that the follow up Call to Action was held in Accra in 2008.   African experience, lessons and frustrations have been pivotal not only in shaping the aid effectiveness agenda – and institutionalizing a consensus around the importance of country ownership, accountability for results, and harmonized joint action to achieve country priorities – but also in testing how to put these principles into practice in the real world.  For example, Tanzania – one of MCC’s partner countries -  led the way in the early 2000s experimenting with new mechanisms for donor coordination such as basket funding, donor sector leads, and direct budget support.

The Millennium Challenge Corporation (MCC) was born out of these aspirations for more effective and authentic partnerships between wealthy and poor countries.  MCC embodies a non-traditional approach to U.S. assistance that starts from the premise that aid works best in those countries committed to their own development.  MCC is the first U.S. agency to rigorously apply principles of 1) country selection based on policy performance; 2) a primary focus on economic growth and empirical results measured in terms of beneficiaries’ increased income; and 3) country ownership that makes partner countries responsible for defining investments and implementing agreed upon programs.  These features have produced remarkable responses from African countries determined to demonstrate their willingness and ability to make good use of donor resources to reduce poverty through sustainable investments in national and social infrastructure.

When considering the role that African nations played in the movement for aid effectiveness and MCC’s emergence as a practical manifestation of this movement, it should come as no surprise that Africa makes up over half of MCC’s portfolio; two-thirds of MCC’s $8 billion in investments is in good performing African countries.  Already there are impressive results across the continent that range from policy reforms, to new ports, roads, and power systems, to an increased emphasis on gender integration and equality in development. We are proud of our partnerships in Africa and proud that our partner countries have shown that principles such as selectivity, country ownership, and accountability really do work.

On this Africa Day, MCC wishes all African nations well and promises to continue to respect the ingenuity, hard work and vision that we see in their efforts to build prosperous, well-governed nations.