Remarks by Millennium Challenge Corporation Acting CEO Jonathan Nash at the Africa Business and Investment Forum, Addis Ababa:
Good morning everyone, your Excellencies, and distinguished guests. I am honored to be here today and to share the stage with such distinguished colleagues.
I’m also looking forward to talking with all of you about bringing together African and U.S. public and private sector leaders to identify new ways to work together, and promote private sector-led growth in Africa. From promoting trade and economic progress to countering violent extremism, U.S. and Africa share a number of common interests.
Strategic investments in critical sectors can help the poorest people rise out of poverty – advancing security, stability and prosperity across Africa.
As we all know, the continent is home to some of the world’s fastest-growing economies and will be home to one quarter of the world’s consumers by 2030.
U.S. companies and investors are increasingly aware of the continent’s economic potential. In 2015, U.S. goods to sub-Saharan Africa were $17.8 billion, up 75 percent from 2005. But this is just the beginning: we know that there is much progress to be made in deepening our trade and investment relationship, and increasing trade flows in both directions.
The U.S. is committed to working with African nations to realize the promise of a more peaceful, more productive, more prosperous world. We value our partnership with countries across Africa, and we respect the people of Africa.
I’ve been at MCC for about 12 years, and I’ve had the opportunity to work closely with many of our partners across the continent. And I know some of our partners are represented here today.
But for those who don’t know us well, here’s a brief overview: the Millennium Challenge Corporation is an innovative U.S. Government agency created in 2004 with one mission: to reduce global poverty through economic growth. We do this by focusing on good policies, country ownership and results.
And MCC’s commitment to Africa has been clear: Over the last 13 years, we have partnered with 23 countries in Africa – from Burkina Faso, Cote d’Ivoire and Ghana to Liberia, Mozambique, Senegal and Uganda. Our investments on the continent total more than $8.4 billion and account for 70 percent of our portfolio.
The majority of MCC’s investments are infrastructure projects that have delivered clean water and sanitation to help fight disease, improved agricultural yields by bringing irrigation to farmers, and increased access to reliable electricity for households and businesses.
We work together with our partner countries to analyze and identify the most binding constraints to private investment and entrepreneurship that hold back economic growth and then use that analysis to inform our projects.
For example, in November, we signed a $525 million compact with the Government of Cote d’Ivoire to support the country’s drive to diversify its economy through investments in education and training to align with the needs of the private sector, and improving transportation. Both are areas that are holding the country back from growth.
MCC compacts reflect our partner countries’ own priorities and we support countries owning their own development from design to implementation.
And, importantly, our investments help create the right conditions for private investment. Catalyzing private investment for development has been fundamental to our work.
Our innovative approach – from viability gap financing for infrastructure projects to support of regulatory reforms – unlocks capital, improves investment environments, and helps create opportunities for firms in emerging markets.
Identifying new sources of capital for investment in public infrastructure and services is critical to advancing economic growth and addressing development challenges. And for reducing global poverty. And we know investors are looking to enter high-potential markets in Africa.
Blended finance – the merging of public and private funds to mobilize additional private capital flows for the public good – is a key tool in global efforts to reduce poverty. Blended finance is the future of economic development. MCC is committed to identifying and implementing actionable strategies for unlocking capital flows and we want to partner with you.
One area where blended finance can have a transformative impact is the power sector. Along with our U.S. Government partners, including USAID, OPIC and Power Africa, we are working to expand access to reliable, affordable electricity throughout the continent, as evidenced by the over 1.5 billion in grant funding MCC has committed to date.
For example, MCC’s $498 million compact with the Government of Ghana is focused on the power sector, where we are supporting the Government’s efforts to improve the financial and operational health of the utility by bringing in a competitively selected private sector operator who will invest up to $500 million to strengthen the distribution network and improve service quality for households and businesses, and reduce losses.
Our investments in Ghana are expected to help catalyze significant new private investment overall and help the Government of Ghana better deliver reliable electricity services to its people.
In Benin, MCC’s investments are crowding-in and mobilizing commercial finance to increase total financing available for development. Our Off-Grid Electricity Access Project is a competitive grant facility that will fund, in partnership with the private sector, critical public infrastructure, household solar systems, mini-grids and energy efficiency measures.
In Liberia, we worked alongside other donors to fund the rehabilitation of the Mount Coffee Hydropower Plant. MCC’s investment in Mount Coffee will help bring back online the country’s largest source of power, providing much needed electricity and driving down the price of power.
And in Senegal and Burkina Faso, we are currently developing new compacts that are likely to focus on partnering with the private sector to strengthen the power sector.
We are optimistic about the potential for investors to partner with us and others on the continent to increase economic growth and reduce poverty. By connecting investors to new, underserved markets, we can expand opportunity for millions of people across Africa. We will continue to work to forge strong, innovative partnerships with the private sector, civil society, foundations and others to increase the impact of our collective investments.
I am looking forward to further conversations today on these important topics, and to realize new and exciting partnerships.
Distributed by APO Group on behalf of Africa Regional Media Hub.