'MCC's Commitment to Africa'

Remarks by MCC CEO Daniel Yohannes at the Africa Society’s Ambassador Andrew Young Lecture Series

Thank you, Noah, for such a kind introduction.  We appreciate your leadership as Chairman of the Board of Directors of the Africa Society.  It’s good to be here with so many friends of Africa.

My special thanks to Mrs. Edith Hazel, the Deputy Chief of Mission here at the Embassy of Ghana, for hosting such an extraordinary event.  Thank you for opening Ghana’s Embassy to us this evening.

Ghana is a MCC partner country, and I’ve had the privilege of traveling there to see for myself the progress underway because of our partnership.  So, it means a lot to me to be in Ghana’s home this evening.

And, let me also thank Congressman Donald Payne for his continued support of MCC’s work in Africa.

Distinguished guests,
Ladies and gentlemen,

I am honored to be here as part of the Africa Society’s Ambassador Andrew Young Lecture Series.  The Millennium Challenge Corporation and the Africa Society share the same goal: our commitment to helping Africans help themselves replace poverty with prosperity.

It has been over a year since President Obama nominated me as CEO of MCC, and I am proud to lead an organization that is investing more than 70 percent of our program funding in Africa’s development.  As a proud American and a son of Africa, you can understand—on a personal level—just how exciting it is for me to be involved in MCC’s work.

As President Obama said when he made his historic visit to Ghana last year, global prosperity is tied to Africa’s prosperity. I could not agree more.

  • That’s why we continue to elevate Africa’s strategic position in U.S. foreign policy and on the international stage.
  • That’s why we are committed to working with African countries through partnerships grounded in mutual respect and responsibility to address the many challenges and opportunities faced by the continent and the global community.
  • And, that’s why we realize that our collective success depends largely on Africa’s initiative and leadership, with the United States playing a supporting role.

Now more than ever, America’s prosperity and security are linked with that of developing countries, including in Africa.

And, part of America’s engagement with Africa is through the work of the Millennium Challenge Corporation.  Let there be no mistake about MCC’s commitment to Africa.  The numbers speak for themselves.

  • Of MCC’s 7.5 billion dollar portfolio, 5.2 billion dollars—that’s 70 percent—benefit the people of Africa.
  • We have active compacts in 11 countries in Africa and have funded smaller threshold programs in 9 countries.
  • African partners are investing nearly 60 percent of their MCC grants in transportation and agriculture alone, vital sectors for long-term growth, food security, and trade.  These grants are also funding African-designed and implemented reforms, programs, and projects in education, healthcare, power, finance, and land management.

I could stand here and list figures all night that reflect the positive work MCC and our partner countries are accomplishing together. But, Africa’s wealth goes beyond the numbers of farmers trained or kilometers of roads built.  Africa’s riches lie with its people.

This audience already knows that Africa is rich with people who are full of hope, pride, skills, and a yearning to improve their lives and provide a better future for themselves and their children.  I saw this firsthand in Ghana, Cape Verde, and Tanzania this year during my travels. But, in order for Africans to realize their dreams, African governments must take ownership, assume responsibility, and be accountable for their development and prosperity. African governments throughout the continent must be willing to do everything possible to create sustainable environments for growth that will open up opportunities for investment and trade.

It is precisely for this reason that MCC takes a completely different approach to how we award U.S. development assistance.  It is an approach that already applies the principles and practices that are at the center of President Obama’s vision for development, which he unveiled last month as world leaders gathered in New York.

The new U.S. Global Development Policy recognizes the important role development must play, alongside diplomacy and defense, in addressing global challenges.  The President’s strategy believes that ending global poverty means:

  • investing in economic growth,
  • promoting country-led development that engages government, civil society, and the private sector in the design and implementation of investments,
  • demanding accountability from partner countries, and
  • focusing on transparency and results.

This is exactly how MCC operates around the world, including in Africa.

  • What sets MCC’s model of development apart is that partner countries themselves determine how best to invest their MCC grants.  This approach to country-owned development creates solutions by and for Africans.
  • Our model is performance-based, so we partner with countries that are committed to practicing sound political, economic, and social policies.
  • Our model demands results, so we want to work with countries that embrace the transparency and responsibility necessary to deliver tangible results from our investments of U.S. tax dollars.  This creates a new culture of accountability in Africa.

In these ways, the MCC model works to sustain conditions for growth in Africa that extend well beyond the life of any MCC grant.  We seek to break aid dependency in Africa and replace it with the economic independence of African trade, commerce, and innovation.
Because of our approach, I can point to three key ways MCC’s commitment to Africa is helping the continent.

First, MCC works to promote good governance throughout Africa. MCC incentivizes sound policies by using 17 indicators to determine which countries would make our best partners.  We measure, among other factors, government effectiveness, control of corruption, civil liberties, immunization rates, girls’ primary school graduation rates, days and cost to start a business, and trade and fiscal policies.

This creates an environment for businesses to grow, invest, and create jobs.  And, sound policies also create an environment where our investments can do the most good.

  • As part of its plan to become MCC-eligible, Cape Verde, for example, reduced the number of days it takes to start a business.  Businesses can now be registered in an hour, when before it could take more than 50 days.
  • Mali and Benin are making tough land reforms.
  • Tanzania and Mozambique are improving the management of public utilities.
  • Lesotho formalized economic rights for married women for the first time.

Second, MCC works to support Africa’s efforts to build greater capacity for trade and investment.  Protectionist tariffs, corrupt customs and border controls, and poor transportation within and between countries are crippling Africa’s competiveness.  African countries need to remove these barriers to trade, build institutional capacity in customs and national standards, and develop trade-related skills.  They need reliable infrastructure to move products to markets.  Yet, only about 30 percent of sub-Saharan African roads are paved.

It’s no wonder that most of MCC’s partner countries, including those in Africa, have chosen to invest in infrastructure.

  • Tanzania, for example, is putting its MCC grant toward trunk roads to increase commerce, connecting the seaport of Tanga with Horohoro at the Kenyan border to reach the major port of Mombasa.  I visited a segment of this road in May, and I can say that the lives of ordinary Tanzanians will be transformed for the better.
  • Cape Verde used MCC resources to modernize its port to increase imports and exports.  And, I am heading there next week to visit the port as the country prepares to mark the official end of its first five-year MCC grant.
  • Mali is a landlocked country that depends on air routes for trade.  It is using its MCC grant to improve its airport and increase freight and passenger traffic.

Third, MCC works to help African economies engage the private sector. The U.S. Global Development Policy talks about promoting innovation in the development of new partnerships.  This is why a top MCC priority moving forward is to engage the private sector in all stages of our operations in Africa and around the world.  One of the most effective ways to make our investments sustainable is to provide MCC partner countries with the tools, resources, and information they need to attract private sector investment.

The private sector, after all, brings innovative financing and technical expertise that can dramatically increase the sustainability of our efforts to promote economic growth and development.

By motivating the right policies, building infrastructure, and deepening capacity for trade and investment, MCC is helping Africans say to the world: We’re open for business.

For all the tremendous progress Africa has made, the reality remains: Africa is underperforming in the international marketplace.

  • Last year, Africa’s share of global GDP was only about 1.6 percent.
  • Africa accounts for only about 2 percent of global trade, and 8 percent of intra-African trade.
  • Investment, outside of the extractive industries and telecommunications, remains below global standards.

Yet, the Center for Global Development released a report just a few weeks ago on how African countries are defying the old negative stereotypes of poverty and failure.  CGD’s report speaks of an “emerging Africa” that is in the midst of dramatic transformation.  The CGD report calls on donors to make aid more effective by letting emerging African countries implement their own programs.  The report says donors and recipients need to hold themselves accountable for achieving results.  MCC firmly believes in these principles, and we are practicing them on a daily basis.

MCC partnerships throughout Africa are proof of this commitment to foster change for the better.  We can—and are—creating stronger economies in Africa by motivating sound policies, expanding trade capacity, building infrastructure, and engaging the private sector for the long term.

And, we are doing this alongside Africans themselves.  They are the faces of Africa, and so am I.  I stand before you as a United States Government official and as a voice of the very people we are working to help.  It saddens me to see how many countries around the world have become dependent on aid.

As so many African countries celebrated—or prepare to celebrate—the 50th anniversary of their independence, they must think differently about development assistance.  Countries must find innovative ways to leverage aid to reduce poverty, promote growth, and attract the private sector.  As President Obama stated, “Aid is not an end in itself.  The purpose of foreign assistance must be creating the conditions where it’s no longer needed.”

That is exactly what MCC is doing.  And, we need your help to succeed.

I ask African governments to hear the voices of their people, to live up to their responsibilities, and to continue working toward:

  • democracy,
  • civil liberties,
  • educating girls and promoting gender equality,
  • stamping out corruption; and
  • reforming their political, economic, and social policies to create conditions for private sector-led development and growth.

I ask all of you, friends of Africa, to help the continent thrive among the challenges. I welcome hearing your thoughts, your insights, your ideas in the discussion to follow—and in our conversations in the months and years ahead—for how we can best accomplish our goals to achieve poverty reduction and sustainable economic growth in Africa.

Together, we can—and must—chase opportunity for the betterment of Africa’s citizens if we all wish to benefit and prosper.  Thank you very much.