Chief Executive Officer, Millennium Challenge Corporation (MCC) on MCC’s Activities in Africa Tuesday, April 16th 2013
Mr Yohannes discusses the MCC’s activities in Africa, particularly investments in the continent, newly added countries, and information on his Senegal trip. He also discusses the U.S. government’s focus on good governance, policy reform and results as well as efforts to spur growth, trade, and investment in Africa.
Mr. Yohannes also speaks about the MCC selection process and next steps in partnership development; MCC’s current investment focus in Africa; why the new countries (Liberia, Niger, and Sierra Leone) are significant; and how MCC aligns with the President’s 2012 Africa PPD and the administration’s new Doing Business in Africa campaign.
The Millennium Challenge Corporation (MCC)
The Millennium Challenge Corporation (MCC) is an innovative and independent U.S. foreign aid agency that is helping lead the fight against global poverty.
Created by the U.S. Congress in January 2004 with strong bipartisan support, MCC is changing the conversation on how best to deliver smart U.S. foreign assistance by focusing on good policies, country ownership, and results.
MCC provides well-performing countries (good governance, economic freedom, and investments in their citizens) with large-scale grants to fund country-led solutions for reducing poverty through sustainable economic growth. MCC grants complement other U.S. and international development programs.
The Millennium Challenge Corporation (MCC) is an innovative and independent U.S. foreign aid agency that is helping lead the fight against global poverty.Created by the U.S. Congress in January 2004 with strong bipartisan support, MCC is changing the conversation on how best to deliver smart U.S. foreign assistance by focusing on good policies, country ownership, and results.MCC provides well-performing countries (good governance, economic freedom, and investments in their citizens) with large-scale grants to fund country-led solutions for reducing poverty through sustainable economic growth. MCC grants complement other U.S. and international development programs.
MODERATOR: Thank you. Good afternoon to everyone from the Africa Regional Media Hub with the United States Department of State. I would like to welcome our participants calling from across the continent and media gathered in the room in various embassies in Cape Verde, Sierra Leone, Ghana, Lesotho and Burkina Faso. Today we are joined by the Millennium Challenge Corporation (MCC) CEO Mr Daniel Yohannes who is speaking to us from Dakar, Senegal. We will begin with remarks from Mr Yohannes and then open it up to your questions. To ask a question, please press ‘Star 1’ on your phone to join the question queue. Today’s call is on the record and will last approximately 45 minutes. And with that I will turn it over to Mr Yohannes.
CEO DANIEL YOHANNES: Hello and thank you for taking part in this call. I welcome the interest and look forward to our conversation today. But first let me tell you a little bit about the work of the Millennium Challenge Corporation and what brings me here in Africa, then I would be very happy to take your questions.
The Millennium Challenge Corporation or MCC is a key part and a major contributor to President Barack Obama’s global development strategy including the U.S. strategy towards sub-Saharan Africa. The MCC has one mission of reducing poverty through economic growth. Our partners are rigorously selected countries who have a track record of sound democratic and economic governance. We are also very selective about the investment we make. Americans deserve to see that their dollars deliver a high rate of return and development impact and our partners expect the same.
Countries prioritize their economic needs and partner with us to develop and implement their homegrown solutions. And we require programmes to be completed in five years holding our partners accountable. Through this approach MCC is a living real achievement for the world’s poor. Transportation networks are stimulating trade and commerce with regional impact. We have projects that address food security, energy security and water security and are helping to connect poor economic growth and opportunity.
The majority of MCC’s partnerships around the world are right here in Africa. We work with partners to promote food security through greater agricultural reliability. Transform public health and education systems. Increase opportunities for women and youth and build the necessary infrastructure for business development and trade. About 65% of MCC’s food security investments are in Africa. About 70% of MCC’s water investments are in Africa. In all, MCC has signed contracts with 14 African countries worth nearly USD6 billion, almost two-thirds of our entire investment portfolio. When MCC’s Board of Directors met last December to determine which countries are eligible to apply for a compact they selected five African countries, Sierra Leone, Morocco, Liberia, Niger and Tanzania.
I have come to Africa now to see for myself the progress in two MCC partner countries. I was in Tanzania last week to mark the completion of some of the major projects in their USD698 million MCC investment. The focus is on roads, water and energy. In Zanzibar I marked the completion of the installation of a submarine cable that is bringing reliable electricity to that island.
I will stop here. I will be more than happy to answer your questions related to the Millennium Challenge Corporation. Thank you.
MODERATOR: Thank you very much. We will now go to the question and answer session. We will first go to Embassy Accra, Ghana. Embassy Accra Ghana?
QUESTION: Yes, Good afternoon. My name is George Wiafe. I am with the Joy FM Radio Station here in Accra, Ghana. I want to ask the Chief Executive of the MCC what is the status of the discussions with Ghana for the Compact Two round and what are the challenges regarding Ghana’s application for Compact Two?
CEO DANIEL YOHANNES: Thank you very much. Our partners are in the process of developing a second compact and as soon as we receive the proposals we will take it to the Board. And right now we are projecting it to be the later part of this year or the beginning of next year.
MODERATOR: Thank you. Accra, Ghana do you have anymore questions?
QUESTION: Yes we do. So it means that you are looking at possibly next year for Compact Two to take off. I just also want to find out whether the current sequestration debates or challenge in the U.S. could affect this project in Ghana.
CEO DANIEL YOHANNES: Let’s put it this way. I think that we are all working in a constrained budgetary environment; there is no question about it. I think what matters the most is that we are going to be extremely selective where we could invest to get the biggest impact both for the American taxpayers and also for our partner countries. So I think that we have to be extremely creative. I think that we are going have to bring in other partners in the same picture. And but the key here is to be very selective and invest in those projects which are expected to have the best return for our Millennium partners.
MODERATOR: Thank you. Next we will go to Cape Verde. Please state your name and affiliation before you ask your question and please move closer to the microphone. Thank you.
QUESTION: This is Ulda Moreira from RTP Africa. The question is Prime Minister Neves recently met with Mr Yohannes during his trip as a part of the Four African Heads of State to Washington. In addition to discussing MCC did you have the chance to talk about Cape Verde’s recent public debt issues and an intervention with authorities such as the IMF as he requested?
CEO DANIEL YOHANNES: I have not. Next?
QUESTION: [Question in French]. [Translation]: Is this public debt situation going to cause problems with the current MCC second compact in Cape Verde?
CEO DANIEL YOHANNES: The second compact has begun to be implemented. As you know it concentrated in water and sanitation projects and projects are continuing to be implemented extremely well. The Cape Verdens have been excellent partners so we are looking forward to the completion of this investment in the next four years.
MODERATOR: Thank you very much. Do you have any more questions Cape Verde?
QUESTION: Not at this time.
MODERATOR: OK. Just to remind the callers to please press ‘Star 1’ if you want to be placed on the question queue. Next we go to Embassy Maseru, Lesotho. Your line is open. Please state your name and affiliation before you ask your question. Thank you.
QUESTION: My name is [inaudible] from Public Radio Maseru, Lesotho. I would like to know why is it that Lesotho is being said to be one of the better performing countries on the first compact but has not been selected for the second compact?
CEO DANIEL YOHANNES: Thank you. Lesotho is performing extremely well and the compact is going to be completed sometime in September of this year and there is going to be another Board meeting in December that will select countries for a second compact or first compact. And if Lesotho continue to perform extremely well like it has done then there is no reason why Lesotho should not be considered as a candidate for a second compact but that is a Board decision and we will know more in December. But I think the key right now is to ensure that the investment made in this wonderful country is completed on time. I am planning to be in Lesotho in three weeks and I look forward to be there and look at what has been done and see the partners myself about what has been accomplished.
MODERATOR: Thank you. Lesotho do you have anymore questions?
QUESTION: No thank you not at this time. We have no further questions.
MODERATOR: Thank you. Now we go to Embassy Accra in Ghana. Your line is open. Please state your name and affiliation before you ask your question.
QUESTION: My name is George Wiafe with Joy FM in Accra, Ghana. For the first compact you devoted USD547 million. Is there any projected budget for the compact two and also trying to find out with respect to this current sequestration in the U.S. could that affect any support that you have planned for a compact two for Ghana possibly when it takes off next year.
CEO DANIEL YOHANNES: A couple of things. One is, you know, the amount is going to be determined by the quality of the proposals that are going to be submitted by our Ghanaian partners, right. Like I indicated earlier, at MCC we invest in those projects that are expected to have the biggest impact for our partner country. So I cannot tell how much it is going to be because we do not know yet. I think that our partners are still developing the compact. So I am sure it will become very clear as we get closer to the time. But right now I cannot give you any figure because we do not know.
QUESTION: The second question, sequestration?
CEO DANIEL YOHANNES: Like I said I think that there is some impact but again it is all going to depend on the quality of the proposals. Some countries make it less and some countries may make it more. What determines at the end of the day is how fast it is [inaudible] what the proposal is worth and what kind of investment is being proposed. Keep in mind our approach and involvement is like a business, we invest in those projects that are expected to have the biggest impact for our partner countries.
MODERATOR: Thank you very much. Just to remind callers to press ‘Star 1’ in order to ask a question. I am wondering, Accra Ghana, do you have anymore questions before we move to Sierra Leone. Hello Accra? Next we go to Sierra Leone. Sierra Leone your line is open. Hello Sierra Leone your line is open. Just to remind callers again to please press ‘Star 1’ to be placed on the question queue. Next we go to our Embassy in Lesotho, Maseru. Your line is open Maseru. Please state your name and affiliation before you ask your question.
QUESTION: Thank you. I am Makosi [inaudible] from the Achiever Magazine. I would like to know upon your visit in three weeks in Lesotho, Maseru what will be your main purpose of visiting and what are the results that you are expecting except that you have the reports that Lesotho has been successful. What major key aspects are you going to be targeting? Thank you.
CEO DANIEL YOHANNES: Thank you. Of course you know we have investments primarily concentrated in health and also in water. So my purpose is to see what has been accomplished in the last four and a half years. Lesotho has been a great partner. We have been able to complement our investments with an additional USD100 million and I am going to be there to see what has been accomplished. As you know the compact is expected to be completed in September of this year so this will be a part of the close-up process and I just wanted to see for myself, what has been achieved, what has been accomplished and how the investments are helping our partners in Lesotho.
MODERATOR: Thank you very much. Any more questions from Lesotho?
QUESTION: We have no further questions at this point, thank you.
MODERATOR: Thank you very much. Just to remind callers again to please press ‘Star 1’ to be placed on the question queue. Sierra Leone we will try one more time to give you a chance to ask questions. Sierra Leone your line is open.
QUESTION: My name is Mohamed Massaquoi of Concord Times Newspaper, Freetown. [inaudible] You spoke about serious issues but I want to ask questions about the energy and water [inaudible] as he mentioned. How are we going to achieve this knowing too well that electricity is one of the problems, the biggest problem in Africa? And how are we going to ensure [inaudible].
CEO DANIEL YOHANNES: Can you repeat the question because you are really coming very poorly and then could you slow down a little bit?
QUESTION: Right, what I am concerned about. You mentioned a lot of issues ranging from energy and also water for electricity knowing too well that in Africa, one of the biggest problems we are faced with is water and electricity. How are you going to ensure that if [inaudible] so that African countries who are beneficiaries of this project actually [inaudible].
CEO DANIEL YOHANNES: [Inaudible] going from country to country. Just to give you an example, all of our USD6 billion here in Africa, which is about [inaudible] of our total portfolio, the majority, about 80% is committed to infrastructure, roads, bridges, ports, airports, water, electricity. So it depends from country to country. It is based on their priorities. It depends, for example Zambia our investment of USD350 million is in water to help that country to become more water secure. In Malawi the entire USD350 million is committed to help that country become more energy secure, which is electricity. So the beauty of our programme is it varies from country to country. It is based on their needs. We do not have any sector requirements. We do a constraint analysis working with our partners and they are determined, based on that constraint, what should be invested. So our job is to make sure that the funds are invested in those projects that are expected to benefit our partners in a big way. So for some country it could be water, for another country it could be electricity. So they themselves as partners make that decision based on their needs. So it is going to vary from place to place. In Malawi like I said energy is the focus because in their constituencies only 7% have access to power. So this would help that country become a little more competitive in the market by having more energy. So you see it is a huge investment but it varies from place to place.
MODERATOR: Thank you very much. Sierra Leone any more questions?
QUESTION: Yes, my name is Ahmed Sesay. I work for Radio Democracy in Freetown. [Inaudible]
CEO DANIEL YOHANNES: Can you repeat the question please?
QUESTION: Yes. What is the next step for Sierra Leone as one of the parties in the MCC? What is the next step in the partnership for Sierra Leone?
CEO DANIEL YOHANNES: OK. The President has already [inaudible] to begin the working process. So the first step is to do a constraint analysis working with an economist and also working with economists which are in Sierra Leone to really understand what are some of the major constraints to economic growth. I think that once we know that then we would be expecting to get a proposal [inaudible] usually two or three or four different proposals and then we make an investment decision primarily based on those projects that are going to have a serious impact, whether it be water, electricity or roads. We do not know yet but that is the process. The process has begun and we look forward to be working with Sierra Leone.
MODERATOR: Thank you. We will take one more question from Sierra Leone before we move to Lesotho.
QUESTION: My name is S.U. Thorunkah and I work for the Global Times Newspaper. How will you ensure that the financial reward for the Millennium Challenge Corporation will actually impact [inaudible].
CEO DANIEL YOHANNES: Can you repeat the question please Sir?
QUESTION: How will you ensure that the financial reward for the Millennium Challenge Corporation will actually impact on the lives of the ordinary people?
CEO DANIEL YOHANNES: Well again I think that the objective; our mission is to reduce poverty through economic growth, right, and we make investment decisions based on the investment’s ability to have the biggest impact for the people that live in our partner country. We require our partner countries to consult with their constituencies before they come with a proposal to us. We ask them to speak to civil society, the business community, the NGO community, government officials. Everyone in that country should be consulted before they come with a proposal. Two, we also want to make sure that gender is included in the proposal. We want to make sure that both men and women are equal champions of the development. So it is a very rigorous process but I think ultimately the investments are helping the lives of many African partners here on this continent. We are helping our partners here to become more competitive on the global market by improving the infrastructure of those countries. Like I told you I have just come back from Tanzania. I have seen what has been accomplished through our compact. So, it is a programme that is going to benefit the poor. By statute, 75% of our funds are committed to the poorest country on earth. So there is going to be a lot of benefit but it is going to be determined on the quality of work and the quality of proposals submitted by our partner countries.
MODERATOR: Thank you very much and now we go to our Embassy in Maseru, Lesotho. Your line is open Maseru.
QUESTION: Thank you. My name is [inaudible] from KGL Media. I just want to know how long will your visit take to the Mountain Kingdom and one other question is, after completion of the compact, how are you going to monitor and evaluate the progress in the Mountain Kingdom?
CEO DANIEL YOHANNES: Can you repeat the question please? It did not come very clear.
QUESTION: OK. My questions are, how long will your visit take in the country? The other question is, after the completion of the project or the compact, how are you going to monitor and evaluate progress in the country?
CEO DANIEL YOHANNES: Good question. I will be there for at least three days and I should be able to see some of the highlights in the three days. And what we do in all of our partner countries once the projects are completed we have independent country evaluators that come in and look in terms of if in fact the investments are creating income for the people that live in those countries. We talk about results, we talk on a continuing basis. We measure the inputs, the outputs, the outcomes after the investment and lastly we look to see if in fact the investment is creating a condition of income for the beneficiaries. So it is a very rigorous process and we do the rigorous evaluation process once the compact is completed, probably after one year to a year and a half and the people who do the vigorous independent compact evaluations are not MCC associates, they are independent from outside. And I think the key is that, you know, we are helping to build the infrastructures of our partner countries but ultimately I think it is going to depend in terms of investment from the private sector. And if our partner countries are creating the enabling environment for private sector companies to invest as well, I mean it does not matter how much money is invested by MCC or other development agencies, I think that what matters the most at the end of the day is investment from the private sector. Which means that our partner countries are going to have to continue to improve their democratic and economic governance to attract private investment not only from within the country but from outside.
MODERATOR: Thank you very much. We will take our last question from our Embassy in Accra, Ghana. Accra your line is open. Please state your name and affiliation before you ask your question and kindly move closer to the microphone please.
QUESTION: It is Ekow Quandzie, Ghana Business News. I am just finding out what should the government of Ghana be doing to ensure that their proposal actually goes through and what sector [inaudible] energy sector?
CEO DANIEL YOHANNES: The compact is being developed by the government of Ghana. I know that they have consulted many of their constituencies, I think that, based on earlier indications, are that they are looking in the energy area. But I think now it must be developed and I know that they are consulting with their constituencies, but we are just waiting to get the proposal from our Ghanaian partners before we could react to the compact.
QUESTION: What should they be doing to ensure that their proposal is approved? Have you had situations where proposals have come in and you say that I am sorry. What should they be doing to ensure that their compact is approved by Millennium Challenge Corporation?
CEO DANIEL YOHANNES: You are cutting off, but they are working. They are developing the compact, they are speaking to their constituencies, right, because keep in mind that we do not make investments for the sake of investment. We expect major policy reforms at [inaudible] level as in decision level to ensure that our investments are sustained for many years to come. So it is not simple work, it is a lot of work but this is how we make sure that our investments are sustained for many years to come.
QUESTION: You can go ahead, I can hear you, go ahead I can hear you.
CEO DANIEL YOHANNES: OK. So our partners, our Ghanaian partners are developing their compact, they are speaking to their constituencies, they are speaking to businesses, they are speaking to civil society, they are speaking to government officials, they are speaking to other NGOs and so forth. Because we are not only investing in power plants for example, we also want to make sure that there are some institutional reforms at the center level whether they be energy or roads to make sure that the investments that are going to be made by MCC are sustainable for many, many years to come. So it is not a simple process, it is a very rigorous process from day one to the end.
MODERATOR: Thank you very much, that concludes today’s call. I want to thank the MCC CEO Mr Daniel Yohannes for joining us and thank all of our callers for participating. If you have any questions about today’s call you can contact the Africa Regional Media Hub at firstname.lastname@example.org . Good bye.
CEO DANIEL YOHANNES: Thank you very much, appreciated