United States Department of State (Washington, DC)
Kathryn McConnell
13 July 2007
Washington, DC — Mozambique has joined a group of African nations that will get additional U.S. aid because of its actions to boost economic growth and implement poverty reduction measures.
The Millennium Challenge Corporation (MCC) and Mozambique signed a $506.9 million, five-year agreement intended to expand access to clean water, improve roads and increase agricultural productivity.
Through the compact, the people of Mozambique will break down barriers to economic growth with a plan they developed and will implement for their own benefit, said John Negroponte, U.S. deputy secretary of state, at the July 13 signing ceremony.
"Mozambique's diligence and determination to adopt reforms, even difficult ones, and to build the necessary capacity to qualify for MCC funding are commendable and a testament to the deep will of the Mozambican people to pull their country out of poverty and on to the path of prosperity," he said.
The accord is expected to benefit approximately 5 million people by 2015, according to a June 27 MCC press release.
"By providing safe water for nearly 2 million people, the devastating toll of water-borne diseases, including malaria, will be reduced," U.S. first lady Laura Bush said when she announced the agreement during her trip to Mozambique in June. (See related article.)
MCC also recently agreed to award a five-year $362.6 million grant to another African country, Lesotho, to help it increase water supplies for industrial and home use, strengthen its health care infrastructure and remove barriers to foreign and private investment. The agreement, scheduled to be signed later in July, is expected to benefit 1.8 million people, MCC said.
MCC, which administers Millennium Challenge Account (MCA) grants, rewards "countries that have already shown they perform better than their peers on the policies that support growth and poverty reduction," the agency said in its 2006 annual report.
The corporation requires aid-seeking countries to develop their grant proposals in consultation with their populations. The proposals should have clear objectives and specify ways to measure progress and procedures to ensure fiscal accountability.
The MCC is "one of the many initiatives that benefit Africa" that the United States has taken under President Bush, said Armando Guebuza, Mozambique's president at the ceremony.
Since emerging in the early 1990s from three decades of civil war, Mozambique has had one of the most rapid rates of growth in Africa. The MCC grant will allow the country to sustain that growth rate, the agency said.
In addition to targeting the country's northern provinces, where poverty is the most severe, the funding also aims to help Mozambique improve its main north-south road transport route. It will establish a more secure land access system, providing an incentive for foreign investment, improve the productivity of the country's coconut farms and help farmers learn to grow other crops.
Lesotho is located strategically within the rapidly growing Southern Africa Development Community, which will become a common market in 2008. MCC's grant will help that country improve its water systems and the health of its workers, enabling it to benefit from the region's expected private-sector expansion, according to MCC.
The grants to Mozambique and Lesotho, called compacts, bring to nearly $2 billion the amount MCC has awarded to seven countries in Africa. The grants range from $110 million for Madagascar to $547 million for Ghana.
MCC also has awarded a total of approximately $1 billion in smaller progress assistance grants to another six African countries under its "threshold" program, which help nations that do not qualify for MCC "compact" assistance but are being encouraged to continue reforms based on progress having been made in improving governance, rooting out corruption and making investments in health and education.
Money granted to reform-minded countries has encouraged leaders of other developing countries to re-evaluate their national priorities and energize their own reform efforts, according to an MCC report.
"Mozambique is an outstanding model of how our incentive approach is working," said MCC head John Danilovich, who signed the agreement.
(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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