Maputo — The United States Millennium Challenge Corporation (MCC) has refused to grant a second aid package (known as a “compact”) to Mozambique.
The decision was taken by the MCC board on Tuesday, at its quarterly meeting. Only Lesotho was considered eligible to develop a proposal for a new compact. Lesotho completed a 363 million US dollar compact in September.
This was at the same time as Mozambique completed its first five year compact, for 506.9 million dollars, covering projects for water supply, sanitation, roads, land tenure and increased agricultural income in Niassa, Cabo Delgado, Nampula and Zambezia provinces.
One of the conditions for eligibility for a second compact was completion of all the projects in the first one. Due to delays by contractors, three key projects (the Nampula city water supply system, and the roads from the Ligonha river to Nampula, and from Namialo to the Lurio river) were not completed by the time the compact ended.
The government then injected a further ten million US dollars from the state budget to complete these projects, in the belief that this would be sufficient to clear the way for a second compact.
The decision of the MCC board took the government by surprise. The Minister of Planning and Development, Aiuba Cuereneia, told reporters “in accordance with the MCC's own criteria, Mozambique complied with almost all the indicators. The MCC deputy chairperson visited Mozambique and praised us for complying with the indicators”.
“We have complied with all our plans with the MCC. We could say ‘mission accomplished!'”, he added. “The only project which hasn't advanced was the Nacala city water supply, and the MCC knows that was not the government's fault. The Nacala dam was finished but the system was not. Even so, the government has made the money available to complete the work, as the MCC rules demand, and the tender will be launched this month”.
The press release from the MCC board gives no reason for rejecting Mozambique's application for a second compact.