7 May 2004

Africa: Eight African Nations Eligible For Millennium Challenge Account Assistance

Washington, DC — The Board of Directors of the Millennium Challenge Corporation (MCC) voted Thursday to make 16 countries "eligible" for Millennium Challenge Account (MCA) assistance this year. The eight that are in Africa include Benin, Cape Verde, Ghana, Lesotho, Madagascar, Mali, Mozambique and Senegal.

"Today is a milestone," Paul Applegarth, the corporation's chief executive officer said, calling the MCC "a new approach to foreign assistance." Applegarth's appointment was confirmed only late Wednesday night, barely in time for him to participate in the meeting.

Congress has approved US$1bn for the MCA this fiscal year. President Bush is asking for US$2.5bn for FY2005 and has pledged to request US$5bn in FY2006, which would nearly double current U.S. assistance to developing nations. The Millennium Challenge Corporation is a new government entity created to administer the program.

A total of 16 indicators was used to select the 16 countries invited to apply for assistance. The indicators are grouped in three categories - 'ruling justly', 'investing in people' and 'economic freedom'. In addition, to receive MCA assistance this year, countries must have less than US$1,415 in average per capita income, which eliminates several countries on the continent, including Botswana, Namibia and South Africa.

The MCC Board also approved a "threshold" program aimed at a small number of "candidate countries" that have not met eligibility requirements but seem to be "demonstrating a significant commitment" to achieving them. The MCC hasn't identified which countries fall into this category, but Applegarth said in a press briefing today that "the MCC may set aside some money to work with those countries to improve their performance."

"The MCC will only support poor countries that are committed to growth-promoting governance, health, education and economic policies," said Secretary of State Colin Powell who chairs the MCC board. "And the prospect of obtaining MCC funding will serve as an incentive for developing countries that have not yet adopted pro-growth policies to do so," he says in a statement of welcome to the MCC's new website.

"Over the years, short term needs have squeezed out focus on long-term growth," Applegarth said. The MCC will "focus on the longer term" and "encourage policy-reform in countries that promote growth." But he denied that the MCC will supplant the foreign assistance programs operated by the U.S. Agency for International Development (USAID). "If the MCA gets it right, it can be an example for other elements of foreign assistance," he said.

A study released on April 22 by the Center for Global Development listed seven of the African nations chosen Thursday among those "most likely to qualify." Mauritania was included, while Mozambique was not. Dr. Steve Radelet, the study's author, named Burkina Faso among the countries coming very close to eligibility and Kenya and Malawi as nations "eliminated by corruption." Among countries expected to "miss by one indicator" were two more from Africa - Djibouti and Sao Tome and Principe.

"There are a number of countries that are close, including some in East Africa," Applegarth said, in response to reporters' questions about the "threshold" nations. "It's pretty clear where they don't measure up against the criteria, and the governments can figure that out," Applegarth said, adding that "we'd be glad to talk about that with them."

One early favorite for inclusion in MCA was Uganda. But when the 'ruling justly' criteria were developed, the country scored poorly for political rights and civil liberties, in large part because of the 'no party' system that has been championed by President Yoweri Museveni since he took power in 1985.

Museveni's argument that Uganda is more democratic than many multi-party nations, a view he pressed on a visit to Washington last June, which included a White House meeting with President Bush, has failed to win over critics. Dr. Crispus Kiyonga, a close presidential aide, who came to Washington last month to make Uganda's case, conceded that "the rest of the world doesn't understand" how Uganda's political arrangement is serving the interests of its people.

Kiyonga, who gained international prominence as health minister by leading Uganda's ground-breaking campaign against HIV/Aids, said the government has taken important strides to eliminate corruption and protect human rights. "But the progress is being blurred," in part, he said, because Uganda has "a very free press," which highlights misdeeds and abuses that might not get as much attention in less-open countries.

The lobbying has had an impact, according to officials close to the MCC deliberations. Uganda's ranking rose in recent days, though not sufficiently to make the eligibility list for MCA assistance in 2004.

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