US Congressman Payne Insists on better MDG Results

Payne Insists on Results from the Millennium Challenge Corporation

Representative Donald M. Payne, Chairman of the Subcommittee on Africa and Global Health, convened a hearing today entitled “Millennium Challenge Account in Africa: Promise vs. Progress.”  The objective of the hearing was to examine the achievements and setbacks of the Millennium Challenge Account (MCA) in Africa since its implementation in 2004. The MCA is a signature program developed by the Bush Administration which ties US assistance to accountability and responsibility by recipient countries.  Based on the premise that free market economic policies and democratic principles allow sustainable economic growth to flourish, the Millennium Challenge Account is a competitive selection process that funds nations’ economic growth and poverty reduction initiatives.  The Millennium Challenge Corporation (MCC), manager of the MCA, has the duty of selecting eligible countries, allocating funding and overseeing approved program proposals – also referred to as MCA Compacts.  To date, nineteen of the forty eligible countries are on the African continent.  With the recent additions of Lesotho and Mozambique, seven African countries have approved MCA Compacts, which is over half of the thirteen compacts approved thus far.  Of the $3 billion obligated for the compacts around the globe, African countries are set to receive over $2 billion. However, those figures belie the fact that dramatic progress has not been made.  According to the Government Accountability Office, an independent and non-partisan investigative arm of the US Congress, it has taken almost two years for countries to develop and enter into compacts with the MCC.  Moreover, the signing of compacts does not equate to an immediate payout of funds.  In fact, African countries have received only 23% of the MCA’s planned disbursements.  Furthermore, there is uncertainty as to whether a significant portion of the money spent on compacts has been used to fund intended projects.  Payne warned, “Sooner or later, we may find that we are losing credibility in regards to delivering on the promises of the MCA.” Congressman Payne, during the hearing, also addressed the issue of appropriated funds that have gone unspent.  Since its inception, Congress has appropriated approximately $6 billion to the Millennium Challenge Account with an additional $1.8 billion allocated for Fiscal Year 2008.  However, with a constrained budget and a slightly over 50% disbursement rate, Payne and other Members of Congress want to see the MCC improve upon the mechanisms that deliver monetary contributions to eligible countries.

US Congressman Payne (Former Supporter of AGOA) Questions AGOA Success.

Payne Weighs AGOA in Myth versus AGOA in Reality

United States Congress (Washington, DC)
PRESS RELEASE
14 July 2007
Posted to the web 16 July 2007
Washington, D.C.
Yesterday, Congressman Donald M. Payne, Chairman of the Subcommittee on Africa and Global Health, held a hearing entitled, “Beyond Oil and Gas: African Growth and Opportunity Act’s Benefit to Africa.”

Payne, an original supporter of the African Growth and Opportunity Act (AGOA), called the hearing to critically analyze the legislation’s impact on growth and poverty reduction in Africa since the enactment of the bill in May 2000.

The African Growth and Opportunity Act, a trade preference program for Sub-Saharan Africa, provides duty-free access to the US market for certain goods from select Sub-Saharan African beneficiary countries. Currently, thirty-eight Sub-Saharan countries are AGOA eligible.

Although AGOA has created thousands of jobs and millions of dollars in investment for these countries in a few sectors, Payne however questioned whether AGOA has delivered on its promise of not only opening markets but also promoting economic growth and development in Sub-Saharan Africa.

Oil accounts for nearly 82% of US imports, of which over 70% comes from only a handful of countries. “Given that oil and gas are already major commodities for the US’ ever-increasing economy, I am concerned about its inclusion in AGOA,” Payne commented. “Oil products already receive low tariffs whereas apparel items face higher tariffs, ranging from 35 – 90% depending on the item.”

According to many experts, agriculture is a major conduit for African economic growth and development. Yet, AGOA benefits to that sector have been miniscule. Furthermore, the volatility of the apparel industry has left many eligible Sub-Saharan countries out of that global market. With the expiration of the apparel quotas occurring, China and India are beginning to flood the global market with their cheaper wares.

Payne stated, “When AGOA was initially crafted, there was a great debate as to whether it would be a tool for real, broad, sustained growth and poverty reduction for all of Africa. I must say seven years later, AGOA has not lived up to that promise. We must ensure that capacity is being built in the necessary industries that will move Africa towards greater sustainable poverty reduction and development.”

EC (part of the EU) Grants Ecowas a Paltry 44.8m Euros

EC Grants Ecowas 44.8m Euros

This Day (Lagos)
NEWS
16 July 2007
Posted to the web 16 July 2007

By Oke Epia
Abuja
The European Commission (EC), has approved a total of 44.8 million Euros to support regional integration in West Africa over a period of five years, from 2007 to 2011.

The funding, according to a press release signed jointly by the EC and the Commission of the Economic Community of West African States (ECOWAS), will cover four cardinal areas of integration in West Africa. These are achievement of a common market; macro-economic stability and convergence; institutional capacity building; and competitiveness enhancement and productive sectors.

This new grant brings to a total of 235 million Euros, as Contribution Agreement under the current 9th European Development Fund (EDF) and it is divided into two main focal sectors: Economic integration and trade enhancement (£118 million), transport facilitation (£82 million) and additional projects covering peace and conflict prevention, fishery, culture, health and other facilities.

According to the statement, the Contribution Agreement is one of many supports provided by the EC to the West African regional integration programme and implemented by the ECOWAS Commission.

In another development, 23 officers from units related to ECOWAS Standby Force (ESF) have completed a training programme in Bamako, Mali.

The four-week programme, hosted at the Ecole Maintien de la Paix (EMP), was to sharpen their professional skills and equip them to serve as staff officers and commanders in peace support operations, and was attended by officers from the Task Force headquarters of the ESF, the designated headquarters staff of the Standby Force and Commanders of various units pledged by member states to the 6,500-strong force.

A statement from the ECOWAS Commission said the course, which was handled by officers from the EMP and instructors from the armed forces of Niger and Senegal, consisted of a Brigade Command post programme, civil military cooperation and disarmament among others. demobilization and reintegration training, which was handled by a team from Canada’s Pearson Peace Centre.

The ESF Task Force of 2773 is scheduled to become operational after its certification before the end of 2008. The main brigade of 6,500, which is based on the timetable of the African Union, will be available as one of the standby forces for the Regional Economic Communities (RECs)

IMF and World Bank Criticised AGAIN!!!

Country Calls for Transparency On IMF, World Bank Top Jobs

Business Day (Johannesburg)
NEWS
16 July 2007
Posted to the web 16 July 2007

By Thabang Mokopanele
Johannesburg
FINANCE Minister Trevor Manuel on Friday reiterated SA’s position that the selection of heads of international financial institutions, including the International Monetary Fund (IMF), should be an open and transparent process with candidates not restricted by nationality, as the G-20 has urged.

“It would therefore be unfortunate if a truly merit-based process, allowing the consideration of candidates from all member countries — whether advanced or developing — were not followed,” Manuel said in the wake of the announcement that IMF MD Rodrigo de Rato intends to step down from his position in October.

Since the IMF and the World Bank were established 60 years ago, the convention has been that a US citizen, nominated by the president of that country, is appointed World Bank president and the MD of the IMF is a European, nominated by major western European states.

Last year, as a member of the management troika of the G-20 — the group of 20 emerging and advanced economies, of which it currently holds the chair — SA strongly supported calls for the selection of senior IMF and World Bank management to be based on merit and ensure broad representation of all member countries.

“SA continues to hold this view,” Manuel said on Friday.

However, he said SA welcomed the IMF executive board’s announcements last week that there would be an open, transparent process for selecting De Rato’s successor, with candidates being considered regardless of nationality.

“SA shares this view with Peter Costello, the Australian treasurer, and Guido Mantega, the Brazilian finance minister,” said Manuel.

Reuters reports that the IMF board agreed on Thursday on a procedure to select the next chief.

The board said it would accept nominations from any of the IMF’s 185 member countries, and would weigh the choice of candidates in September .

“The nomination period will commence immediately, and will close on August 31,” the board said. The successful candidate must have a record in economic policy making and managerial and diplomatic skills.

The endorsement of a selection process by the 24-member board comes as many countries, particularly in the developing world, question the tradition that a European national heads the IMF and an American leads the World Bank.

Europe, wary of the increased pressure for change, moved quickly last week to hold on to the job, naming a former French finance minister, Dominique Strauss-Kahn, as its nominee.

Britain, however, said it would support developing countries’ push for a transparent process, saying Europe could no longer insist “the position is ours”.

While a European could still be selected to run the IMF at the end of the newly endorsed procedure, the board’s statement gives the process more legitimacy, and opens it up to wider competition.

Canada also weighed in, and said it supported an open process not limited to Europeans.

“We think there are a lot of very good candidates out there for the job,” said Bank of Canada governor David Dodge.

US Treasury Secretary Henry Paulson did not endorse Strauss-Kahn immediately, but it does not mean he will not . With Reuters.

World Bank Praises and then Slaps Nigeria, Without Realistic Proposals for Change

How Country Can Deepen Economic Reform Benefits – World Bank

This Day (Lagos)
NEWS
16 July 2007
Posted to the web 16 July 2007

By Onyebuchi Ezigbo
Abuja
The World Bank has said that for Nigeria to achieve the desired economic development and ensure full benefits from its reforms, it must address some critical issues like the crisis-ridden energy sector, poor service delivery, poor business environment and inability to access long-term finance.

This came as the Permanent Secretary in the Federal Ministry of Labour, Prof. Oladapo Afolabi, disclosed that President Umaru Yar’Adua had given the ministry a mandate in the areas of employment generation, industrial relations, social security and productivity for which the World Bank is expected to provide technical assistance.

World Bank’s position was made known by its Lead Economist on Poverty Eradication and Economic Development, Mr. Volker Treichel, at a retreat organized by the ministry of labour for senior officers in Abuja over the weekend.

He said though Nigeria had made remarkable progress in virtually all the areas of her economic reform implementation, there still remained a wide gulf between economic growth rates and actual benefits to the ordinary people.

The bank gave some of the areas of success to include private participation, increase in non-oil sector performance and the big push for export-led growth of the economy.

Treichel listed some of the positive fall-outs of the economic reforms as the 7% growth of the non-oil sector, oil-price-based budgeting, debt relief agreement, tight monetary policy, lower inflation, fiscal surpluses and higher external reserves and sovereign rating for the country.

The bank scribe identified major government economic reform implementation to include commercial bank consolidation drive which made the banks to become stronger, privatization of non-performing public entities, business registration and licensing process, trade liberalization and institution of good governance mechanism.

The World Bank expert noted that one of the areas that had been championed by the government was the concept of the conditional cash transfer provided for individuals based on meeting certain conditions, such as sending children to school or getting vaccination.

However, he said for most Nigerians, the benefits of the reforms remained elusive with the prevalent high unemployment level and a decadent educational system.

He said a recent report published by the bank on Nigeria’s economic reforms showed that the country was still grappling with instability in the energy sector, harsh business environment and limited access to long-term finances.

“There is need to deepen financial sector intermediation through such policies like the pension reform,” which will pull more resources into the banking sector.

According to him, the research conducted over the past years on the impact of economic growth on poverty reduction and in improving social conditions of the people has shown that it is important to conceptualize them around the term ‘Share Growth’.

However, Treichel said the progress was still very low and to a great extent fell short on acceptable standards.

He said one area which was yet to witness improvement was the maternal mortality and infant mortality, adding that data at the disposal of the World Bank showed that it had not improved.

He said efforts should be made specifically to improve the interventions towards improving the power sector, the business environment and the physical infrastructure to support economic growth.

There should also be specific efforts aimed at bringing in those that are disenfranchised and those that are marginalized and may be too far away from the formal system to benefit directly from the reforms, he said.

Treichel said one of the ways reform benefits could be better distributed and growth engendered across the populace was in the field of micro credit by providing credit to smaller enterprises while the third area would be by bringing in special efforts in form of provision of education to distant and remote areas.

Commenting on the impact of reforms, he said there was evidence that the poverty rate in the country had come down as shown by the last poverty survey in 2004, which indicated that there was an improvement in the number of social indicators such as primary school enrollment, that the level of vaccination and also HIV-Aids prevalence rate had declined and that access to drinking water had improved.