Millennium Challenge Corporation Stimulates Growth In Africa

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SEATTLE, Washington — It is important that African governments understand the U.S. commitment to aiding the economic, political and social development of each country that joins partner programs with the United States. Though the U.S. has many models of conducting foreign policy with African nations, the Millennium Challenge Corporation is one of the most accomplished at fighting poverty in Africa. Additionally, it also benefits the U.S. economy and individual businesses.

U.S.-Africa Policy

The United States constantly proves Africa matters through government action. This is exemplified is through trips made by U.S. officials to African countries. In 2019, Under Secretary for Political Affairs, David Hale, visited Cote d’Ivoire, Kenya, Niger, Somalia and Sudan. In February 2020, Hale visited Burkina Faso, Mali, Mauritania and Senegal while in the same month Secretary of State Mike Pompeo toured Angola, Ethiopia and Senegal.

The U.S. also has many economic partnership programs with Africa, several created or expanded within the past 5 years. The BUILD Act created the Development Finance Corporation, which provides opportunities for private investment in new or developing markets. The 2X Africa Initiative commits to investing $1 billion in economic benefits for women in Africa. Another partnership, Prosper Africa, expands two-way trade, opening U.S. companies to business opportunities in Africa. The African Growth and Opportunity Act incentivizes government reform to create desirable environments for external investment. The newly adopted Africa Continental Free Trade Agreement could be a crucial step towards uninterrupted trade. Additionally, it could create investment opportunities between the U.S. and Africa. The U.S. has negotiated an agreement with Kenya promising more trade deals with African countries in the future.

The most important part of U.S. foreign policy in Africa is that it conveys the U.S.’s desire to work with African governments. The U.S. wants to create mutually beneficial ties and incentivize U.S. companies to do business in Africa as its economic environment improves. The leading foreign policy model for accomplishing that has proved to be the Millenium Challenge Corporation (MCC).

Millennium Challenge Corporation (MCC)

The U.S. notes that many of the fastest-growing economies in the world are in Africa. The MCC assists poorer countries who can enforce government reform and show promise in competing in the global market. By providing these nations with the tools and resources to attain new economic opportunities, the MCC helps fight poverty in the nations partnered with the U.S.

Since 2004, the Millennium Challenge Corporation has invested more than $9 billion in 23 African countries. The investments provide aid to clean water and sanitation projects, improving transportation infrastructure, providing irrigation tools to farmers and improving access to electricity. They also support cross-border projects across the African continent. This would enable countries to create their own unique, sustainable and stable network to address poverty and other challenges.

The U.S.’s investment into the MCC helps combat poverty by promoting economic growth that is specific to each country. Thus, it is sustainable, meaning it gives the government and workers tools to be self-reliant in the future. The U.S. investment benefits both American companies and the U.S. government as well as the partnered African countries. African partners receive the opportunity to develop sustainable economic connections, programs and tools. Meanwhile, the U.S. benefits from a competitive edge in the global market.

The MCC only partners with countries whose governments are committed to investing in humanitarian reform, democratic reform and economic sovereignty. The incentive of an MCC partnership promotes what is referred to as the “MCC effect.” This term describes the positive economic and policy reforms that African countries put into place in an attempt to gain valuable U.S. aid and the opportunity to partner with U.S. companies. The Brookings Institute found evidence of the “MCC Effect” in 45 of 118 countries striving to meet the eligibility requirements of the Millennium Challenge Corporation. This means that approximately 38% of the low to lower-middle-income countries were actively participating in reforms.

U.S. Aid in Africa

The U.S. provides opportunities for economic freedom through its extensive partnership programs with nations across Africa. The largest contribution from the U.S. has been in healthcare, human rights improvement, women empowerment and combating child labor. The U.S. investment in these areas not only helps combat poverty. It also ensures that jobs created in these areas are filled by African workers and transferred into African businesses.

The Millennium Challenge Corporation rewards African countries promoting democracy by providing economic stimulation and growth in return for governmental reform. This, in turn, fights poverty and improves living standards in those African countries.

– Hanna Rowell
Photo: Wikimedia

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