MCC Completes First Compact in Africa, $110 Million Compact with Cape Verde
Good Governance, Policy Reforms Set Positive Example in Region
Washington, D.C. — Millennium Challenge Corporation (MCC) Chief Executive Officer Daniel W. Yohannes joined Cape Verde Prime Minister José Maria Neves and hundreds of beneficiaries and stakeholders today on the Island of Santo Antão to celebrate the results of MCC’s $110 million economic growth compact with Cape Verde.
“Cape Verde has made remarkable strides to become a bastion of economic reform, liberalization, and good governance in West Africa. The country is putting policies, procedures, and practices in place to promote the self-sufficiency of private sector-led, market-based growth. I am pleased that the Millennium Challenge Corporation is part of Cape Verde’s story of economic growth and development,” said Mr. Yohannes.
In July 2005, MCC signed a five-year, $110 million compact with the Government of Cape Verde aimed at assisting Cape Verde with the transition from aid-dependency to sustainable, private-sector led growth. The Cape Verde-MCC compact has strengthened the country’s investment climate and reformed the financial sector; improved infrastructure to support increased economic activity; and provided access to markets, employment, and social services. In addition, the compact has helped to increase agricultural productivity and achieve key policy reforms needed for sustained economic growth. Reflecting positive implementation progress, as well as strong policy performance, Cape Verde was selected as eligible to develop a second Millennium Challenge compact on December 9, 2009.
In a congratulatory note to MCC and Cape Verde, U.S. Secretary of State Hillary Rodham Clinton said, “The Millennium Challenge Corporation’s compact is a key tool in our engagement with Cape Verde as it continues to improve the standard of living for its citizens and serve as a model for democracy and economic progress in Africa. Cape Verde and the United States have been strong partners in building prosperity and spreading it to more people throughout the region. By using MCC resources in partnership with the private sector, Cape Verde has increased agricultural productivity, improved vital roads, bridges, and port infrastructure, and created a solid foundation for long-term growth led by its own people and businesses. Cape Verde exemplifies the mutual accountability and responsibility that is the new standard in U.S. development assistance, in Africa and around the world.”
During the compact closeout events, Cape Verde Prime Minister José Maria Neves said, “The first compact of the MCA – Millennium Challenge Account – was an important contribution to the implementation of Cape Verde’s agenda to transform into a modern, competitive, just, and socially inclusive country. MCA has promoted important institutional changes improving people’s practices and aspirations. It has contributed to the creation of an entrepreneurial spirit, to business opportunities and private sector development, to employment creation, ensuring income for families, and combating poverty.”
Key results from MCC’s compact with Cape Verde:
The first MCC compact to reach completion in Africa has delivered tangible results that make a difference in the lives of Cape Verdean families and communities. Because of MCC and Cape Verde’s partnership:
• The Port of Praia has been modernized, increasing efficiency and trade capacity and bolstering the port’s security;
• Three rural roads have been upgraded, connecting coastal and inland villages with larger population centers and markets;
• Four bridges have been built, providing faster access to basic services such as hospitals and schools, and making travel possible during the rainy season;
• Easier and faster business start up: In 2007, it took 52 days to start a business in Cape Verde. Based on Cape Verde’s priorities, the MCC compact provided $2.5 million for equipment, software, and technical assistance to support streamlined government services including business registration. By 2010, Cape Verde had reduced both the cost and time to start a business to an hour;
• The Cabinet of the Government of Cape Verde approved a micro-finance law that regulated micro-finance lending;
• 28 reservoirs have been completed in key watersheds to increase irrigated land;
• The post-harvest center has been built allowing farmers to store and certify agricultural products, maintaining freshness and quality of crops, which can command better prices at market; and
• 549 farmers have been trained in drip irrigation, conserving scarce water on three of the four islands. Approximately 1,685 beneficiaries are expected to be directly impacted by the drip irrigation activities.
These results are increasing agricultural productivity, improving the transportation network, facilitating trade, expanding the private sector and creating a vibrant environment for growth.
“I congratulate Cape Verde on the successful results of this compact. The Cape Verde-MCC partnership reflects President Obama’s new vision for development, which calls on countries to leverage U.S. foreign assistance to create sustainable economic growth. Cape Verde’s commitment to maintaining sound policies is as crucial as ever to lay the groundwork for private investment and a potential second MCC compact,” said Mr. Yohannes.
For additional information, please visit www.mcc.gov.
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Millennium Challenge Corporation, a U.S. Government agency designed to work with developing countries, is based on the principle that aid is most effective when it reinforces sound political, economic, and social policies that promote poverty reduction through economic growth. For more information, please visit www.mcc.gov.
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