Millennium Challenge Account

FY2016 Funding Recommendation:  
$1.25 billion

 

Funding History

       Enacted   

       President's FY2016 Request   

       InterAction's FY2016 Recommendation


Justification

 Key Facts

  • The expected rate of return for MCC beneficiaries is up to $1.47 for every dollar invested in the MCC.

  • The MCC has signed 29 compacts with 25 countries worth more than $10 billion. These compacts are expected to benefit more than 174 million people with investments in infrastructure, food security, education, and health.

  • The MCC was named by Publish What You Fund as the third-most transparent aid agency in the world in its 2014 Aid Transparency Index, and it is the most transparent donor organization in the U.S. Government.

The Millennium Challenge Corporation (MCC) was created by Congress in 2004 with bipartisan support; it was designed as an innovative international assistance agency charged with reducing global poverty by enhancing economic growth. Using a compact-based model, the MCC forms program-oriented partnerships with developing countries committed to good governance, economic freedom, and investing in their citizens.

The MCC signs compacts with countries that are competitively selected based on independent and transparent policy indicators. Selected countries then identify their priorities for achieving sustainable economic growth.

Current compacts include projects on:

  • Water, sanitation, and hygiene improvement in Cape Verde;
  • Community-based nutrition and prevention of stunting in Indonesia;
  • Science and technology in higher education and workforce development in Georgia;
  • Agriculture productivity and infrastructure improvements to expand access to markets and services in Senegal; and
  • Water supply, sanitation, and drainage infrastructure in Zambia.

The MCC’s work has produced constructive, sustainable policy changes in countries implementing compacts, and in those seeking to qualify for MCC candidacy. This year, the MCC is seeking legislative authority for concurrent compacts to further leverage U.S. and international private sector investments in regional infrastructure projects. Using rigorous data analysis as the basis for its investment decisions, the MCC is a leader in pioneering many best development practices, including transparency, gender integration, and country ownership.

With the possibility of new eligible candidates in 2015, the MCC is well poised to sign several new modestly-sized agreements with countries like Nepal and Liberia, and to continue building on its existing programs. Additionally, the MCC continues to play a critical role in implementing the Power Africa initiative by stimulating private investment and overhauling power sectors in Ghana, Cote d’Ivoire, and Sierra Leone. Allocating at least $1.25 billion should provide sufficient funding for the MCC to continue to engage in important partnerships that increase economic growth and good governance in developing countries. 

Success Story:

Staking a claim in Mozambique’s future

Alvaro Baptista Mochangane holds his land title proudly. He now has legal rights to occupy and use his land. Mochangane and his wife, Filomena Rafael, have created a lifetime of memories in a brick house built on a mountainside outside of Nampula, Mozambique. The house represents decades of hard work and savings, including the years Mochangane spent as a soldier. It is where the couple raised their five daughters and two sons. And it is the house where the couple is spending retirement cultivating cassava, coconuts, mangoes, and avocados.

But until last year, the house stood on uncertain legal ground. The couple did not have a written land title to occupy the land, limiting their legal claims and the security of their occupancy.

In early 2012, a neighbor told Mochangane about a project funded by the Millennium Challenge Corporation that would allow the couple to apply for a land use title, known locally by its Portuguese acronym, DUAT. DUAT titles recognize individual or community rights to occupy and use land.

“I know the exact day I received my DUAT: October 20, 2012,” Mochangane said. “This document ensures my place. Every investment I made on this place will stay with us.”

Mochangane and Rafael’s title was one of more than 170,000 urban and rural DUATs issued through August 2013 as part of the country’s five-year, $506.9 million compact with the Millennium Challenge Corporation. In addition, the compact has supported the delivery of 333 community land titles, representing over 2 million hectares of land. The compact’s Land Tenure Services Project aims to establish more efficient and secure access to land by improving the policy framework, upgrading land information systems and services and helping beneficiaries meet immediate needs for registered land rights and better access to land for investment.

More than 1.1 million people are expected to benefit from the project.

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