December 10, 2013
Washington, D.C.–At its quarterly meeting today, the Millennium Challenge Corporation’s Board of Directors selected Lesotho as eligible to develop a proposal for a new compact. The Board also reselected five countries to continue developing compacts and two countries to continue developing Threshold Programs.
The Board selected Lesotho because it has consistently demonstrated a clear commitment to democratic governance and sound policies. A new compact with Lesotho offers MCC the opportunity to have a significant impact on reducing poverty and creating economic growth in the country.
“Throughout the development and implementation of its first compact, Lesotho has been a strong MCC partner,” MCC CEO Daniel W. Yohannes said. “We look forward to continuing this strong partnership and helping the Basotho people create a more prosperous future.”
Lesotho successfully completed a five-year, $363 million MCC compact in September 2013 that helped expand water supply for household and industrial use, strengthened the country’s health care system and removed barriers to foreign and local private sector investment. The Government of Lesotho demonstrated a strong commitment to the compact, and will have spent $50 million of its own money to complete construction and fund complementary investments.
Through the compact, MCC also supported the passage of landmark legislation that empowered Basotho women by ending the second-class status of married women and granting spouses equal rights.
The Board generally decides each December whether to select new compact and Threshold partner countries, and whether to reselect those previously selected countries that are currently developing proposals for MCC investments. By law, the Board must consider three factors when selecting countries with which MCC will seek to enter into a compact: the extent to which a country meets or exceeds eligibility criteria, the opportunity to reduce poverty and generate economic growth in the country and the availability of funding.
MCC’s annual scorecards, which rely on third-party data to measure a country’s commitment to ruling justly, investing in its people and encouraging economic freedom, represent the best available individual measurements of policy performance. When choosing or reselecting partner countries, the Board also considers supplemental information to assess issues or recent events that may not have been captured by the scorecards.
After careful consideration of previously selected countries’ performance, the Board reselected Ghana, Liberia, Morocco, Niger, and Tanzania as eligible to continue development of their respective compact proposals.
The Board expressed strong concern that two of the countries, Liberia and Morocco, passed only nine indicators in their latest scorecards. The Board indicated it expects Liberia and Morocco to pass the scorecard before approving a compact with either country.
Two other countries currently developing compact proposals, Benin and Sierra Leone, were not reselected. The Board discussed the fact that those two countries did not pass MCC’s control of corruption indicator, which is a hard hurdle for passing the scorecard, and did not put them up for a vote on reselection. After also reviewing supplemental information on anti-corruption efforts in Benin and Sierra Leone, the Board urged continued but limited engagement with both countries and indicated it expects both countries to pass the control of corruption indicator before it would approve a compact with them.
“We are very concerned when a country does not pass the control of corruption indicator,” Yohannes said. “We recognize the efforts that the governments of Benin and Sierra Leone have undertaken to address corruption, and I can assure them that MCC is committed to helping those efforts succeed. I am hopeful that the continued and deepened efforts of both countries will be reflected in future performance on the control of corruption indicator.”
The Board committed to further discussions about the agency’s selection process and criteria.
The Board also reselected Guatemala and Nepal as eligible to continue developing Threshold Programs.
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