Governance is a key tool for MCC in changing Africa

Africa’s rise on the global stage is one of the most significant economic and political stories of our time. The continent has some of the fastest growing economies in the world. Trade and investment is expanding. Tens of millions of Africans are being lifted out of poverty and into the world’s next great middle class.

Strong governance models and civil engagement are the keys to cementing sustainable policy reforms during this most pivotal moment in Africa’s modern history. This means taking on deeply embedded, firmly-rooted corruption and mismanagement. It means encouraging the emergence of both a new generation of leaders who will govern with integrity and transparency, as well as civil societies that will hold them accountable if they do not. Africa’s governance is improving – not uniformly and not everywhere, to be sure – but there is genuine momentum that I believe is important and if sustained and nurtured will contribute to Africa’s progress and prosperity.

{mosads}Improving governance across Africa must be led by African populations, not imposed by the international community. But there is an important role for the international donor community, as well as private investors and other external stakeholders in promoting and incentivizing sound governance in Africa’s emerging markets. One agency that has been doing this for the past ten years is the Millennium Challenge Corporation (MCC), the U.S. Government agency which has developed a unique model for fighting poverty in Africa and other regions through promoting economic growth.

This year, MCC celebrates its 10^th anniversary. In the past decade, the agency has signed 29 compacts with countries around the world and invested more than $10 billion in country-owned, country led investment programs and initiatives—each designed by the country itself to be uniquely focused on its own economic needs. What sets MCC’s model apart is a focus on governance as one of its fundamental criteria for selecting which countries it partners with to develop and implement assistance.

MCC is the only donor agency in the world to base its country selection so heavily – and so transparently – on public, third-party policy performance data to measure a partner country’s commitment to just and democratic governance, economic freedom, and making investments in its people. For a country to be selected as eligible for an MCC assistance program, it must show a commitment to these three criteria through a variety of different policy indicators. And MCC keeps scorecards to measure the country’s governance performance throughout the life of its programs. Only about a third of countries pass the scorecard.

I admire MCC’s work because they believe, as I do, that corruption fundamentally undermines economic and social development. It hinders growth by increasing costs, lowering productivity and reducing confidence in public institutions. It particularly harms the development of small- and medium-sized enterprises. It undermines investments in health, education and social welfare. Corruption also directs government spending to the rich and well-connected, while often concentrating public monies in unproductive projects. Corruption also adds a higher level of risk for private sector investment that emerging markets such as those in Africa need to sustain their rise up the development ladder.

MCC’s model is a smart way of delivering development assistance. I believe it is the path to promoting meaningful and sustainable change in Africa and elsewhere. It’s why I have made such a personal commitment to define, assess, identify and recognize governance and leadership in Africa. And in this effort, I am pleased that the mandate of the Millennium Challenge Corporation over the past decade has been to similarly promote economic growth through improving governance. 

Ibrahim is the founder and chair of the Mo Ibrahim Foundation which he established in 2006 to support good governance and exceptional leadership on the African continent.  He recently served as chairperson of the Third United Nations Forum on Business and Human Rights.