Brigitte Weidlich
19 November 2008
FOLLOWING weeks of controversy, the National Assembly yesterday approved a N$3 billion development aid grant from the US government, known as the Millennium Challenge Account (MCA) compact, with a minor amendment.
Prime Minister Nahas Angula read out the reply of Works and Transport Minister Helmut Angula, who was absent yesterday.
Angula was until April the Director General of the National Planning Commission (NPC), which spearheaded the MCA process.
The Swapo Party Youth League caused a major stir within the ruling party two months ago, claiming that under the tourism section of the US grant, the Etosha National Park would be "sold out to US companies" and that they would erect tourism lodges within the park.
The compact will provide millions of dollars in support for the tourism, education and agriculture sectors over five years.
Reading from Minister Angula's speech, the Prime Minister noted it had been a concern that Namibian laws allegedly would not apply for the MCA projects.
"Our negotiating team discussed this with our US partners and, while the text in that Clause (7.1c), is not incorrect per se, it is open for interpretation for those who do not have a legal background.
We discussed to change this section and bring the text in line with the Vienna Convention on International Treaties to which Namibia has been a party since independence," he said.
The text amendment now reads "Namibia may not invoke the provisions of its internal law (other than the Constitution) as justification for its failure to perform the MCA compact."
Another concern raised in Parliament was who would be liable if the US government suspended the MCA.
There were sufficient safeguards in such an event, Angula said.
Government would take liability for contracts entered into with suppliers and a "wrap-up period" of 120 days was provided for.
"In addition, MCA Namibia will build certain safeguards into contracts with suppliers like the right to terminate a supply contract if Compact funding is suspended or terminated.
This is a standard clause in many of Government's agreements with suppliers."
The MCA compact reflected Namibia's own development priorities as set out in the third National Development Plan (NDP3), Angula added.
An example was that 47 schools were selected for renovation by Government.
Should MCA funding be withdrawn, Government would still continue to renovate the schools with own resources, albeit over a longer period.
On the criticism that US companies would come to Namibia and be allowed to bid for MCA procurement tenders and to receive preferential treatment, the Prime Minister said the US government had initially requested that.
"The US government then agreed that there would be no preferences at all, not for US companies and not for recipient-country companies.
Instead, international competitive bidding would apply to all procurements funded by the Millennium Challenge Corporation (MCC)."
However, the Namibian negotiating team managed to work in some safeguards, the Prime Minister told the House.
These include a threshold of up to N$2 million for local procurement, local advertising for goods and non-consulting services and a N$10 million local threshold for works contracts.
In addition, some tender requirements would be "Namibianised" like creating smaller tender packages which could be managed by Namibian companies, ensuring that local materials will be used to reduce maintenance costs, demanding adherence to Namibian standards and also requiring a certain level of local knowledge and prior experience.
On Etosha National Park, Angula merely said that existing rural conservancies nearby would receive tourism concessions to have access to Etosha.
"I assure the House that our negotiating team followed established protocol in the negotiations and relied on the Office of the Attorney General for Legal Counsel," he concluded.
MCA Namibia Chief Executive Penny Akwenye was relieved the MCA compact was ratified.
"This is an important milestone and now we can move ahead to mobilise the MCA Namibia management unit and have the first seven Namibian expert staff to join the unit."
Akwenye, who attended the debate in Parliament yesterday, said the next nine to 12 months would be spent to "gear up the full implementation with commissioning feasibility studies, preparing tender packages for procurement, contracting final design work and doing environmental impact assessments."
The MCA team held an information meeting with Swapo's Parliamentary caucus and met separately with MPs of opposition parties earlier this month to explain any matters still unclear to them.
Late yesterday, the Director General of the National Planning Commission, Professor Peter Katjavivi welcomed the approval of the grant by the National Assembly.
He said that the MCA was expected to "contribute significantly" towards the upliftment of the social and economic life of the Namibian people.
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I still do not understand what we sold to the Americans. We should have gone to Chinese. They are the one with money.