January 30, 2006
Millennium Challenge Corporation Board Approves Compact with Benin
Cotonou, Benin The Millennium Challenge Corporation (MCC) Board of Directors has approved a five-year approximately $307 million Compact with the Republic of Benin. The Program is expected to benefit up to 5 million Beninese and lift an estimated 250,000 of its citizens out of poverty by the year 2015.
The Beninese identified a poor investment climate and a lack of dynamic private sector activity as key impediments to sustainable economic growth and poverty reduction. Land insecurity, lack of access to capital, an inefficient judicial system, and an increasingly uncompetitive Port of Cotonou further hinder economic growth. The Millennium Challenge Compact with Benin aims to address thesekey constraints to economic growth and poverty reduction by supporting improvements in physical and institutional infrastructure in four critical sectors focusing on access to land, financial services, justice, and markets. The access to markets project is expected to reduce delays at the Port of Cotonou and increase the volume of exports in areas important to Benin such as cotton.
Congratulations to the people and Government of Benin for developing a comprehensive, results-oriented program, said MCC CEO Ambassador John Danilovich. This Compact is a testament to Benin’s commitment to good governance and desire to improve the institutional and physical infrastructure needed to lift its citizens out of poverty.
Ambassador Danilovich continued, MCC eligibility is based on the adoption and adherence to three fundamental principles: ruling justly, investing in people, and promoting economic freedom. Benin was selected to compete for Millennium Challenge funds because of its demonstrated good performance in these policy areas. The upcoming election is a significant milestone in Benin’s history and continued participation in the MCC program requires that a successful election be held on the agreed date and according to the terms of Benin’s constitution.
Since its establishment in 2004, MCC has signed Compacts totaling nearly $1 billion with five nations: Madagascar, Honduras, Cape Verde, Nicaragua, and Georgia. MCC has also approved Compacts with Armenia, Vanuatu , and now Benin worth over $600 million.
Launched by President Bush, the Millennium Challenge Account is an innovative approach to development assistance that recognizes sound policies and good governance as critical to poverty reduction and economic growth in developing countries.
Millennium Challenge Corporation (MCC), a U.S. government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.