The governments of Liberia and the United States of America have signed a landmark agreement through the Millennium Challenge Corporation (MCC) to support key energy and road infrastructure projects in the amount of 257 million US dollars. Photo: Steve Ruark
The MCC grant constitutes the single largest bilateral infrastructural grant to Liberia over several years, a Ministry of Finance and Development Planning dispatch noted.
Speaking at the Compact signing ceremony at the US States Department in Washington DC on Monday, November 2, 2015, Liberia’s Vice President Joseph Boakai praised the US government for the gesture, reflecting on the long traditional ties between both nations.
VP Boakai said Liberia’s MCC success showed that the country was making progress in strengthening its governance system, further demonstrating the government’s commitment to deepening democracy and improving the living standard of its citizens.
The Millennium Challenge Corporation (MCC) is an independent, bilateral U.S. Government foreign aid agency established by Congress that is based on the principle that aid is most effective when it reinforces good governance, economic prosperity, applying a set of innovative philosophy to foreign aid administration.
Liberia passed the MCC scorecard for the first time in FY13, after several years of improving economic governance and strengthening democratic institutions. The scores are determined by third party monitoring reports such as Transparency International Corruption index, US States Department Human Rights Report, Report on Human Trafficking, etc.
In 2010, the MCC and the government of Liberia signed a $15 million threshold program grant agreement that focused on improving land rights and access, increasing girls’ primary education enrollment and retention, and improving Liberia trade policy and practices.
Growing at an annual rate of 7%, Liberia was well on course to fix its shattered economy, until the Ebola virus outbreak reversed the progress made during periods of sustained economic stability, says Finance and Development Planning Minister Amara Konneh when he signed the Compact.
Speaking further, Konneh said despite the constraints to inclusive growth, the country was on course to unlocking its growth potential through an ambitious development agenda, with the acceleration of development projects particularly in the road and energy sectors.
“The planned investment in electricity and road maintenance will significantly contribute to our development agenda, thus helping us achieve our central goal of poverty reduction. Energy is fundamental to our growth strategy and together with roads, is critical to our goal of unlocking the growth potential of our economy.
Many efforts to encourage private investment in the light manufacturing sector have been frustrated by the lack of electricity and good roads. Your intervention in these areas will go a long way in encouraging investment, thus bringing in much needed capital, skills, and technology to Liberia,” Konneh stated.
The signing of the MCC grant would provide Liberia additional resources to fund its signature Mount Coffee Hydro project, delayed as a result of the Ebola outbreak. The grant would be used to also spend on other critical roads and energy infrastructure projects over the duration of the program.
Before the signing ceremony, the Chief Executive Officer of MCC, Dana J. Hyde said her institution was delighted to celebrate and open what she called “a new chapter” in the longstanding partnership that has existed between the United States and Liberia.
“We know and have known that Liberia is an emerging champion for development and trade and investment in West Africa, and the agreement that we are about to sign creates the funding that we can help take that to a new level,” she said whilst indicating that the MCC can help unlock the economic potential that exists in the West African nation.
Liberia’s path to the MCC signing has not been easy, having commenced the program in 2008 and winning a threshold grant subsequently. But due to Liberia’s efforts to combat corruption as recognized in numerous assessments, including on the Control of Corruption indicator, and together with improvements to macroeconomic management in recent years, these were indicative of the steps undertaken by the country to advance to the compact stage.
The compact will fund projects including the largest contribution to the rehabilitation of the Mt. Coffee Hydro Power Plant, rehabilitation of the water intake and pipeline from Mt. Coffee to Millsburg, construction of regional road maintenance centers in River Gee and Tubmanburg, and construction of a LEC Training Center.
The Roads Project aims to improve the quality of Liberia’s road network by supporting the piloting of a new maintenance regime and building capacity within the sector. Improved management of the road sector is expected to decrease vehicle operating costs and provide time savings for road users.