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.”