Regional Partnerships

Reducing global poverty creates a more stable, secure world with opportunities for economic growth at home and abroad. As MCC looks to further increase the impact of its investments, it is well-positioned to look beyond national borders and explore regional partnerships.

The Benefits of Thinking Regionally

Photo of Benin’s Port of Cotonou—modernized as part of MCC's 2006 Benin Compact—is a pillar of Benin’s economic growth and serves as a gateway to international trade for the landlocked West African countries of Burkina Faso, Mali and Niger as well as a central pathway for international trade with Nigeria. MCC’s $188 million investment in Benin aimed to expand port capacity, improve port security, and increase port efficiency.

Benin’s Port of Cotonou—modernized as part of MCC’s 2006 Benin Compact—is a pillar of Benin’s economic growth and serves as a gateway to international trade for the landlocked West African countries of Burkina Faso, Mali and Niger as well as a central pathway for international trade with Nigeria. MCC’s $188 million investment in Benin aimed to expand port capacity, improve port security, and increase port efficiency.

People, goods and services move across borders—and so should MCC’s investments. Developing countries can grow faster, create more jobs, and attract more investment when they are part of dynamic regional markets. Enhanced regional integration can connect countries to export opportunities and the resources they need to drive economic activity, such as power, water, and roads.

By making coordinated regional investments across multiple countries, MCC could:

  • Help countries work together to build and grow regional markets;
  • Connect regional power, transport, and water networks to reduce costs and improve service;
  • Capture economies of scale;
  • Facilitate increased trade and investment;
  • Generate new business and market opportunities for U.S. businesses; and
  • Work toward higher rates of return on its investments and larger-scale reductions in poverty.

In West Africa, MCC currently partners with 10 countries. By making coordinated investments across countries, MCC could help these nations work together to expand regional markets, increase trade, and foster greater impact through economies of scale. MCC is uniquely positioned to maximize these opportunities.

The Opportunity for Legislative Change

Photo of pylons and power lines stretch from the Nkula Power Station along Malawi’s Shire River across the country. As part of the $350.7 million Malawi Compact, MCC is investing in upgrading electricity infrastructure and supporting reforms to boost private-sector participation in power generation.

Jake Lyell for MCC

Pylons and power lines stretch from the Nkula Power Station along Malawi’s Shire River across the country. As part of the $350.7 million Malawi Compact, MCC is investing in upgrading electricity infrastructure and supporting reforms to boost private-sector participation in power generation.

To make a regional investment work across countries, MCC’s Board of Directors would need to select those countries at the same time to coordinate compact development and implementation. However, current law prohibits MCC from implementing concurrent, or overlapping, compacts with the same country; so currently, no country with an existing compact could be part of a regional effort. This approach is impractical because MCC’s rigorous selection process makes it unusual to find multiple contiguous countries that are not current partners and pass MCC’s scorecard.

To realize the potential of regional investments, MCC requires a legislative change to the Millennium Challenge Act. The AGOA and MCA Modernization Act, introduced in the House and Senate, would give MCC increased flexibility to promote regional collaboration, trade, and economic growth by authorizing MCC to enter into an additional, concurrent compact with a country partner specifically to promote regional integration.

MCC is a good investment for the American people. Its time-limited, poverty-reducing programs strengthen global stability and U.S. national security, and increase opportunities for American businesses. Expanding the agency’s ability to partner across borders has the potential to generate even greater returns on MCC’s investments.

Boosting Trade and AGOA

MCC plays a significant role in promoting trade. Major MCC projects have included expansions to the main sea ports of Benin and Cabo Verde and roads for commerce in Ghana, Mozambique, Senegal and Tanzania. The agency has invested more than $6 billion in trade-related assistance to developing countries. Of that, MCC has provided more than $4 billion in trade-related assistance to AGOA countries to support trade-related infrastructure like roads, ports and electricity, and policy and regulatory reforms in areas like customs. MCC coordinates with the U.S. State Department, the U.S. Trade Representative, USAID, and other agencies to complement and support their efforts to expand sub-Saharan Africa’s capacity for trade and investment.