Monrovia — Liberia has passed the critical eligibility criteria for the Millennium Challenge Corporation's (MCC) fiscal year 2025 country scorecard, including the hard hurdles of corruption control and democratic rights. However, the scorecard highlights significant gaps in areas such as fiscal policy, government effectiveness, and investments in health and education.
The MCC released its FY2025 scorecards on November 21, 2024, evaluating 76 countries for eligibility to develop five-year grant agreements, known as compacts. Of the 76 countries assessed, 26 passed, including Liberia. The scorecards measure performance across 20 independent indicators categorized into economic freedom, ruling justly, and investing in people.
Liberia demonstrated progress in several key areas, including political rights, civil liberties, regulatory quality, and access to credit. The country also showed improvements in gender inclusion in the economy, land rights and access, and immunization rates.
However, the scorecard revealed areas requiring urgent attention. Liberia underperformed in fiscal policy, trade policy, and government effectiveness, which are critical for sustainable economic growth and public accountability. The country also struggled in social sectors such as health expenditures, education expenditures, child health, natural resource protection, and girls' primary education completion.
Liberia passed at least 10 of the 20 indicators required for MCC compact eligibility, securing its position among the 26 countries that met the threshold. The MCC emphasized Liberia's achievements in controlling corruption and maintaining political and civil rights as particularly noteworthy. These indicators, considered "hard hurdles" by the MCC, are prerequisites for compact consideration.
Liberia's progress in regulatory quality and access to credit was also highlighted as a positive development, signaling an improved environment for economic freedom and private-sector engagement.
Despite its successes, Liberia's shortcomings in fiscal and trade policies raised red flags. The scorecard highlighted weak government effectiveness and issues with the rule of law, both of which are fundamental to ensuring sustainable governance and economic stability.
The government's lack of investment in health and education further showed persistent challenges in human capital development. Poor outcomes in child health and girls' primary education, coupled with low health and education expenditures, point to systemic weaknesses that could undermine long-term growth.
Additionally, Liberia failed to meet standards in natural resource protection.
The MCC's rigorous and transparent selection process uses data-driven metrics to assess countries for compact eligibility. Countries must demonstrate strong governance, economic freedom, and investments in people to qualify for grants aimed at reducing poverty and fostering economic growth.
Passing the scorecard is a significant milestone for Liberia, as it opens the door to potential funding that could help address the country's pressing economic and social challenges. The MCC's model also incentivizes policy reforms even before funding is awarded, a phenomenon known as "The MCC Effect."
A recent MCC report indicated the transformative impact of its scorecard, noting that moving from failing to passing is associated with lifting 1.9 million people out of extreme poverty--equivalent to the economic growth of $1.2 trillion.
MCC's Board of Directors is set to meet in December to determine which countries will be selected to develop compact programs for FY2025. Liberia's performance on the scorecard and its ability to demonstrate opportunities for poverty reduction through economic growth will be key factors in the decision.
While celebrating the milestone, analysts warn that the Liberian government must address flagged weaknesses to maximize the benefits of a potential MCC compact. Investments in health, education, and governance reforms will be critical to achieving sustainable development and improving the lives of Liberians.
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Finance and Development Planning Minister Augustine Kpehe Ngafuan, during the IMF/World Bank Annual Meetings in Washington, D.C., outlined the Boakai administration's progress in ensuring Liberia's eligibility for a second MCC compact. Ngafuan mentioned the establishment of an intra-governmental team tasked with monitoring the MCC scorecard to meet eligibility requirements.
He emphasized transparency and accountability as key priorities for the government, citing ongoing audits of ministries and agencies, efforts to recover stolen assets, and the formation of an anti-corruption task force.
Minister Ngafuan also called for the reinstitution of the U.S.-Liberia Political Dialogue, describing it as a vital framework for strengthening bilateral relations. "The U.S.-Liberia political dialogue is a structured mechanism for our bilateral friendship," he stated during meetings with MCC officials and U.S. Treasury representatives.
