The primary lesson from the Cabo Verde Compact was associated with ensuring that projects have more complete designs at compact signing, in order to ensure that programs can be delivered as designed on time and on budget. For Cabo Verde, as in many compacts developed at the time, the preparation period between the signing of the compact and the beginning of implementation was brief – only three months- leaving little time for important preparatory work that MCC now completes before the five-year implementation clock starts. The re-scoping of the Port of Praia activity illustrates this point– implementation began with only pre-feasibility studies complete, and once more detailed information became available, project design had to be adjusted leading to delays and increased costs. MCC compacts now include an average preparatory period of around one year to ensure programs are as ready as possible once implementation begins.
Another lesson comes from the difficulty MCC’s partners experience implementing complex compacts. Early compacts such as Cabo Verde’s often included several projects across multiple sectors, each with its own activities and sub-activities, with sites that were often geographically disbursed across the country. This made supervision and coordination challenging and diffused potential impact. Later programs, such as Cabo Verde’s second compact, focus on one or two sectors with better integrated activities and are more likely to include investments with greater geographic proximity. This new approach makes implementation more manageable and can lead to greater impact by focusing limited resources on areas most likely to ease constraints to economic growth in a country.
Additionally, a lesson applicable to the entire compact is the need to be adaptable, as unanticipated cost escalations and implementation delays may require scope changes. In Cabo Verde, and in many of the compacts designed in MCC’s early years, much of the detailed project preparation work essential for finalizing budgets and timelines, including feasibility and design studies and environmental and social impact assessments, was completed after compact signing. As programs progressed to detailed design and contract bidding, and external factors like dollar exchange rate fluctuations took effect, costs became more clearly defined, and some original objectives had to be scaled back. In such cases, as in Cabo Verde, MCC works with implementing partners to revise projects to meet as many original objectives as possible with tighter budgets. While some redesign is expected, MCC now conducts more rigorous design, cost estimation and budgeting prior to finalizing and signing a compact, and where possible, ensures that projects are easily scalable so that adjustments can be made more seamlessly when needed. More details on this can be found in a Principles into Practice paper on the topic of MCC’s Results Framework.