Sean Cairncross is Chief Executive Officer of the Millennium Challenge Corporation (MCC).
Through telephonic conference, this journalist from The Ethiopian Herald, attended, he has just discussed with journalists including on the current portfolio of Millennium Challenge Corporation in Africa, as well his upcoming trip to Kenya and Mozambique.
He joined with various journalists drawn from most Africa countries to deal on the activity of the Millennium Challenge Corporation. This program has effect on the geopolitics of the country to live harmonizing things with neighboring countries.
And also this program could have its own influence on the economy of the country. Because of this, The Ethiopian Herald invites its esteemed readers to peruse what is the new deal of US for Ethiopia as well as other African countries. Excerpts:
Herald: Could you brief us about the program of US Millennium Challenge Corporation for African countries, including Ethiopia?
Cairncross: The Millennium Challenge Corporation is a small, independent U.S. government agency created in 2004 with strong bipartisan support, with a single mission of reducing poverty through economic growth.
We select developing countries that have demonstrated commitments to good governance. Millennium Challenge Corporation’s time-limited grant investments target poor constraints on a country’s economy, creating more stable, prosperous communities and countries.
Our partner countries must meet rigorous standards for good governance, from fighting corruption to respecting democratic rights, and we work closely with the private sector to leverage its expertise and incentivize policy reforms to open market opportunities.
We also focus on enabling environment reforms, because Millennium Challenge Corporation believes that the key to unleashing growth potential in its partner countries is through active engagement and collaboration with the private sector. We invest in projects that drive growth, like power, clean water, land rights and roads. And our projects are designed for sustainability and maximum impact.
On 9 December 2019, the Millennium Challenge Corporation Board of Directors selected Mozambique for a new compact, which is Millennium Challenge Corporation’s five-year grant program in order to reduce poverty through targeted investments that increase economic growth.
The Board also selected Kenya as eligible to develop an Millennium Challenge Corporation threshold program. Threshold programs are the agency’s smaller grant programs focused on policy and institutional reforms.
Mozambique successfully completed its first Millennium Challenge Corporation compact in September 2013, which invested in projects in water and sanitation, roads, land tenure, and agriculture industries in order to increase the country’s economic growth.
Over 1.6 million Mozambique citizens are expected to benefit from Millennium Challenge Corporation investments in the next 20 years as a result of the first compact, and a new compact would continue to build on Mozambique’s ongoing commitment to sector reform.
Likewise, Kenya has made excellent progress on Millennium Challenge Corporation’s selection criteria. Kenya is an important partner to the United States in East Africa. Millennium Challenge Corporation’s completed its first threshold program with the country in 2007.
That program targeted reform in Kenya’s procurement systems, improved health service and delivery, and increased the monitoring capacity of government and civil society organizations.
Kenya’s new threshold program is an opportunity for the government of Kenya to demonstrate its commitment to just, democratic governance, economic freedom, and investment in its citizens, which are all essential elements for poverty reduction through economic growth.
My goals for this trip will be to conduct initial engagements with the government, private sector, and civil society leaders in both countries. These engagements will serve as the foundation for productive partnerships that will carry us into the next phase of the compact and threshold development process.
Compact development typically takes two to three years of analysis and planning before a grant agreement can be signed. Threshold programs often take less time to identify projects, because the investments aren’t as large as compact programs.
Commitment to this analysis and planning process helps minimize project risks. And as well it ensures input from all stakeholders and sets the future program up for success that benefits the citizens in our partner countries.
It is important to note that both countries must be annually re-selected by our Board of Directors as eligible to develop a compact or threshold program throughout the development process. And that is true of every Millennium Challenge Corporation partner country.
This requires that both Mozambique and Kenya will continue to meet Millennium Challenge Corporation’s eligibility criteria, including passing Millennium Challenge Corporation ’s annual scorecard and showing a clear commitment to good governance. And that scorecard is what governs our selection criteria.
Herald: What sort of program does the have for Ethiopia, especially in the economic sector?
Cairncross: We’re very excited to be engaged in a threshold program in Ethiopia. It is under development right now, and it’s an exciting partnership for Millennium Challenge Corporation. It is an exciting partnership with the United States. We look forward to seeing the project into practice hopefully a long-term future.
Herald: Which tools do you rely on to assess a compact’s progress and execution of Millennium Challenge Corporation’s program?
Cairncross: So there are two ways that I would like to deal in this regard. The first is with respect to the projects themselves. Our projects, like I say, go through a long period of development.
We do this in partnership with the countries, because the entire process is country-led. Once we get to the point of entering into force, which begins the five-year clock on a project, the entity that executes that project in-country, which we refer to as an MCA that executes the project.
It’s an entity that works between the United States and a partner country government to execute the project. That entity is then responsible for ensuring that the project is executed on time, procurements are running smoothly, and so we monitor that both from here and with our partner country governments, to ensure the projects are deliverable.
Overall, we monitor a partner country’s performance on our scorecard, which measures the political will and commitment to the reforms that led to a partner country’s selection to begin with. And so that
continued performance is important. That is, the technical performance on the execution of the project.
And finally, we monitor and evaluate all projects post-completion to ensure that they are sustained, that they are benefiting the sectors that they are designed to benefit, and that the results are open and transparent so that others in the aid community, others in U.S. government, and others in the host country have access to those results.
Herald: Which local institutions will Millennium Challenge Corporation work with on these policy reforms?
Cairncross: We’re thrilled to have selected Kenya. We’re going to be there next week. We’re very excited. This is a threshold program that is just beginning. So, we are in the initial steps of what that development will look like.
And so, the way that works is the government will identity a lead individual to work with our team in the development of the aforesaid program, and so each of these, like I said, are targeted and data-driven. So in working together, we will determine what threshold program will look like.
Typically, threshold programs target institutional and policy reforms, enabling environment reforms meant to drive and consolidate the country’s movement on our scorecard criteria.
Ideally, the scorecard criteria, in partnership with that threshold program, and because of a partner country’s commitment to the reforms, would improve, and our partnership would be able to continue into the future. And so that process will be beginning right now, where Kenya, as you know, was just selected in December and we’re excited to begin.
Herald: What should the citizens of Africa do in the involvement of Millennium Challenge Corporation?
Cairncross: Part of our process at Millennium Challenge Corporation has included the way we execute the given project. And it’s vital to follow their success and sustainability. The civil society stakeholders also engage in the process of the project.
And so in tandem with Millennium Challenge Corporation, the idea is that a government is demonstrating that it is being responsive to its people, and part of the design of our projects is to engage that society. And so what I would say is measured ultimately on our scorecards.
That’s an important part of targets on the good governance indicators and on the investment in a government’s people indicators, and frankly one of the hard kernels, one of the must-haves on the Millennium Challenge Corporation scorecard for selection is a passing score on democratic rights.
That’s not to say that any passing score on an indicator of Millennium Challenge Corporation’s means that more can’t be done. It is just an indicator that a government is committed to doing more. And so our hope is that by engaging with us, we will help leverage more of that reform and more of that commitment.
Herald: What is the main reason of the selection of Kenya in Millennium Challenge Corporation (MCC) program?
Cairncross: Sure. Coming back up on a higher level, when Kenya has been selected for a threshold program, and a threshold program typically is between 20 and 30 million USD. Larger compact programs typically run, on average, 350 million USD for the larger, infrastructure-focused projects. However, the exact amount and the scope of that project will depend upon the development process. And so we are beginning that process and we’ll have a better idea on that as that process develops further.
The project itself in Kenya has yet to be developed. So, the way our process works is we go through country selection. This happens at our December Board meeting, and so just this past December the Board selected Kenya for a threshold program.
We’re now beginning the development process for that threshold program. And so what that will mean is our team will engage with the Kenyan government. We will go about addressing, typically, in a threshold program, the institutional and policy reforms that focus on improving the enabling environment in Kenya.
But I don’t have any specific details on that program, other than I can say the process is beginning. We’re excited to be beginning it. That’s why I’m heading to Kenya next week, and I look forward to sharing more details as they develop.
Herald: How is Millennium Challenge Corporation different from the Development Finance Corporation and from USAID’s private sector engagement program?
Cairncross: Millennium Challenge Corporation has a specific, singular mission. And it’s reducing poverty through economic growth. It’s not reducing poverty and economic growth. It’s using economic growth specifically to reduce poverty. And so we are working in partnership with our government to do that.
And what that means is that there’s what Millennium Challenge Corporation does. The project itself, the specific sectors of the economy it targets on the things that it tries to unlock to improve the economy. That is what Millennium Challenge Corporation does.
How Millennium Challenge Corporation does is also part of that process as well. We do it through civil society buy-in, openness, transparency, open procurement, and merit-based hiring. It is making sure that sustainability is built into the project, so that if we are building a road, maintenance funding exists to fund that road’s repairs in the future, or that a taxation system exists to continue to fund whatever the project is going forward.
We’re there to grant money. We’re not trying to drive debt. We’re trying to bring economic analysis and sustainability, and understanding of what that means and baking it into the process itself.
So our hope at Millennium Challenge Corporation is, our legacy, in partnership with our countries across the world, is not only the project that we leave. And it as well benefits the citizens of a country. But the process through which it was built.
And we hope that process carries forward, because we believe that is what attracts private investment into markets, investors; that’s what creates jobs, and ultimately that’s what builds a sustainable working economy for a country’s citizenry. And that’s Millennium Challenge Corporation’s sole mission and that’s our focus.
Herald: Do you want to convey your final message?
Cairncross: We are always excited about our partnerships with governments. But Millennium Challenge Corporation is there as the United States there as well. And we view this as a real partnership and as something that we are working together, but the process and the hard work is done by our partner country governments. We are here to support that particular mission. We are here to encourage and consolidate the program.
The Ethiopian Herald Sunday February 2/2020
BY MEHARI BEYENE
