Ghana's $300m MCA Proposal

Ghana's proposal to the Millennium Challenge Account (MCA) of the Millennium Challenge Corporation (MCC), which has been described as ambitious but achievable, is expected to be assessed and approved by June next year.

This was disclosed to The Business Chronicle yesterday by Mr. Jonathan Bloon, Executive Officer of MCC, who added that the county's proposal is ambitious and aggressive, but could be successful with commitment from both ends.

This information runs counter to that provided by the MCA desk at the ministry of Finance and Economic Planning, that Ghana would start benefiting from the MCA by the first quarter of next year.

According to the Deputy Minister of Finance and Economic Planning, Mr. Agyemang Manu, Ghana, in its proposal, is looking for approximately three hundred million dollars to finance programmes in poverty-stricken parts of the country.

The Executive Officer of MCC said they are in the country to do due diligence and to ask questions about Ghana's proposal.

He said the MCA money would be focused more on the agriculture sector, as well as agro-business. "It would cover post harvest processing, transportation of agricultural products and marketing, amongst others. "

On the amount that Ghana is expected to benefit from the account, Mr. Bloon said he was not in a position to disclose what Ghana would get from the account, but hinted that it would be in hundreds of millions of dollars.

Asked whether the corruption index position of Ghana on the Transparency International report would affect Ghana's position of accessing the fund, Mr. Bloon said only World Bank corruption indices are used in the determination of who qualifies.

On her part, the Managing Director of MCC in charge of Africa, Ms. Maureen Harrington, said the MCA is accessible to countries that have good policies that support economic growth, poverty reduction and investment in people.

She said programmes under the MCA are country-owned and success would be measured by results and not inputs. They are amongst an eighteen MCC team in Ghana to do due diligence on Ghana's proposal.

Late last month, the Press Officer of the MCC, Ms. Davy Kong, denied media reports that Ghana has bagged US$300 million from the MCA.

Speaking to Davy Kong in Washington on the media reports, she said Ghana has not been granted $300 million, but the MCC has however signed a grant agreement for up to $3 million to cover costs associated with program development and that the MCC's interim CEO visited Ghana in August to sign the grant agreement.

She revealed to The Business Chronicle that Ghana has not signed a compact with the MCC, though "we are making good progress in our discussions and the compact development process".

She said the amount of any compact with Ghana will be determined through the due diligence process.

Kong was reacting to a media report in the Business and Financial Times that said Ghana would have bagged $300 million from the MCA by the end of March next year.

Early November this year, the Board of Directors of the MCC selected a total of 23 countries as eligible to apply for MCA assistance for fiscal year 2006, and Ghana was selected for the low-income category.

The others were Armenia, Benin, Bolivia, Burkina Faso, East Timor, The Gambia, Georgia, Honduras, Lesotho, Madagascar, Mali, Mongolia, Morocco, Mozambique, Nicaragua, Senegal, Sri Lanka, Tanzania and Vanuatu.

Of these 20 eligible low-income countries, 16 have been selected as MCA-eligible in prior years.

Burkina Faso, East Timor, The Gambia, and Tanzania are MCA-eligible for the first time. In making its selection, the Board considers policy performance of candidate countries in three areas; ruling justly, investing in people, and encouraging economic freedom.