Africa: MCC Fact Sheet On Contribution to Aid for Trade

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Trade is one of the most significant drivers of economic growth. MCC considers $3.2 billion of its assistance to partner countries--35 percent--as "aid for trade."

"Aid for trade" strives to help developing countries improve their capacity to trade by removing internal barriers to trade; building institutional capacity in areas such as customs and national standards; developing business skills; and building the transportation, energy, and other infrastructure needed to enable trade and business expansion that can propel economic growth.

MCC strives to unlock new opportunities for growth that enhance U.S. competitiveness and create American jobs. Private sector firms in the United States are benefitting from pro-growth policy reforms and MCC-funded infrastructure projects that open commercial, trade and investment opportunities in MCC partner countries. U.S. exports to the developing world are growing three times faster than exports to other economies, and MCC assistance is helping build this next generation of trade partners.

MCC's primary contribution to "aid for trade" is through transportation infrastructure financing.

Aid for Trade: An MCC Priority

MCC works in partnership with eligible countries that establish their own priorities in order to generate sustainable economic growth that delivers tangible results for the poor. While each country's grant program is different, many MCC partner countries place a high priority on increasing competiveness and facilitating domestic commerce as well as regional and international trade.

Aid for Trade in MCC Compacts

Compact Country*

Compact Amounts (in millions)

Aid for Trade (in millions)

Aid for Trade in Compact

Armenia

$178

$9.1

5%

Benin

$307

$189

61%

Burkina Faso

$479

$194

41%

Cape Verde

$110

$82.6

75%

El Salvador

$461

$269

58%

Georgia

$395

$314

79%

Ghana

$547

$218

40%

Honduras

$205

$121

59%

Mali

$461

$176

38%

Moldova

$262

$133

51%

Mongolia

$285

$88

31%

Mozambique

$507

$176

35%

Nicaragua

$112

$58

52%

Philippines

$433

$213

49%

Tanzania

$698

$576

83%

Senegal

$540

$325

60%

Vanuatu

$65

$60

92%

Total

$7,770

$3,203

35%

As of March 2012. *Includes only compacts that have entered into force.

Ten of MCC's Threshold Programs also include "aid for trade" activities totaling approximately $52 million. MCC's Threshold Programs generally focus on policy and institutional reforms.

Examples of MCC Investments in Aid for Trade

In Benin, inefficient operations and aging infrastructure at the Port of Cotonou, a major conduit for trade with Benin, Nigeria, Niger and Burkina Faso, resulted in delays and raised costs. MCC's $189 million Access to Markets Project was designed to improve port performance and security, expand capacity, and reduce costs. The expansion and modernization of the port is expected to reduce delays and increase the volume of imports and exports.

In Georgia, MCC provided $46 million to fund critical repairs to the North-South Gas Pipeline, an important link in the Eurasian gas trade that provides natural gas to homes and businesses throughout the country. The completed rehabilitation of Georgia's main trunk gas pipeline is expected to reduce catastrophic loss and improve regional and municipal service delivery, providing increased reliability and energy security throughout the country.

Jordan's Threshold Program included $8.5 million to modernize customs administration. The Threshold Program helped implement a "single window" in five customs centers across the country to improve security and increase efficiency. In addition, the program helped upgrade the Jordanian customs clearance system to an internet-based clearance system, ASYCUDA World, in 14 locations across the country. As a result of these and other efforts, the Threshold Program helped reduce clearance and processing times, in some instances by as much as 80 percent.

In Honduras, El Salvador, and Nicaragua, MCC has provided $448 million for the rehabilitation of major overland regional highways linking together the three countries and providing important infrastructure improvements for Central America. In Honduras, MCC rehabilitated 610 kilometers of roads, including sections of the CA-5 highway, as well as secondary and rural roads to link farmers to markets. In El Salvador, MCC is currently rehabilitating 219 kilometers of the northern transnational highway, which links El Salvador to Guatemala and Honduras. In Nicaragua, MCC funded the rehabilitation of 74 kilometers of roads, including important transport routes to Honduras.

In Tanzania, a $369 million Transport Project is increasing commerce and helping connect communities with markets and social resources. The project includes rehabilitation of up to 430 kilometers of trunk roads, connecting the seaport of Tanga with Horohoro at the Kenyan border and improving roads along the Mtwara corridor. It will also upgrade the airport on Mafia Island, upgrade an additional 35 kilometers of roads on Pemba Island and provide funds for road maintenance to enhance Tanzania's capacity to maintain its road network. In addition, a $208 million Energy Project will improve the reliability and quality of electric power to businesses and individuals, as well as extend electricity service to communities not currently served.

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