Millennium
Challenge Corporation Signs Compact
with Benin
Washington, D.C.
- On February 22, 2006, the Millennium
Challenge Corporation (MCC) signed a
five-year approximately $307 million
Compact with the Government of the Republic
of Benin. The Program is expected to
benefit up to 5 million Beninese, over
half of Benin's population, and lift
an estimated 250,000 of its citizens
out of poverty by the year 2015.
The Beninese identified a poor investment climate and a lack of
dynamic private sector activity as key
impediments to sustainable economic
growth and poverty reduction.
Land insecurity, lack of access
to capital, an inefficient judicial
system, and an increasingly uncompetitive
Port of Cotonou further hinder economic
growth. The Millennium Challenge Compact with
Benin aims to address these key constraints
to economic growth and poverty reduction
by supporting improvements in physical
and institutional infrastructure in
four critical sectors focusing on access
to land, financial services, justice,
and markets.
The access to markets project
is expected to reduce delays at the
Port of Cotonou and increase the volume
of exports in areas important to Benin
such as cotton.
"MCC is proud to work in partnership with the people of Benin
on this Compact and congratulates them
on this great achievement," said
MCC CEO Ambassador John Danilovich.
"The Beninese designed and
developed the program following a comprehensive
consultative process with all segments
of their society. I want to recognize President Kérékou's
leadership and his team for their hard
work. MCC looks forward to continuing our partnership as we work
together to implement the Compact, which
will provide hope and opportunity to
the poor in Benin."
Ambassador Danilovich added, "MCC was designed to work with
and reward nations that have demonstrated
a commitment to adopting good policies
that will spur economic growth and reduce
poverty. Like all MCA countries, Benin's participation
in the Millennium Challenge program
is predicated on its dedication to three
fundamental principles: ruling justly,
investing in people, and encouraging
economic freedom throughout the life
of the Compact. The election on March 5th is a significant
milestone in Benin's history and I commend
President Kérékou and
the Government of Benin for their commitment
to hold these elections consistent with
Benin's Constitution."
Launched by President Bush in 2004, the Millennium Challenge Account
is an innovative approach to development
assistance that recognizes sound policies
and good governance as critical to poverty
reduction and economic growth in developing
countries.
* * * * *
Millennium Challenge Corporation (MCC), a U.S. government corporation
designed to work with some of the poorest
countries in the world, is based on
the principle that aid is most effective
when it reinforces good governance,
economic freedom, and investments in
people that promote economic growth
and elimination of extreme poverty.
More
info on Benin:
Situated in West Africa, between Nigeria and Togo in the Gulf of
Guinea, Benin is a very poor country
with a population of nearly seven million,
a third of which live in poverty.
Progress in development is attributed
to reforms initiated in the early 1990s
as Benin transitioned from a Marxist-Leninist
state towards a pluralistic democracy
and market economy.
Despite growth rates averaging 5% per year in the past decade,
rapid population growth has offset much
of these gains and poverty remains widespread.
Per capita income in Benin remains
below the sub-Sahara African average
and rural poverty has increased in recent
years.
Benin's economy is narrowly dependent
on cotton production, subsistence agriculture
and regional trade through the Port
of Cotonou. Key impediments to sustainable economic
growth and poverty reduction are a poor
investment climate and a lack of dynamic
private sector activity.
These are hindered by land insecurity,
lack of access to capital, an inefficient
judicial system, and an increasingly
uncompetitive Port of Cotonou.
The five year, approximately $307 million Millennium Challenge
Compact with the Government of Benin
aims to increase investment and private
sector activity in Benin.
The program to be funded under
the Compact (Program) seeks to remove
key constraints to growth and supports
improvements in physical and institutional
infrastructures.
The projects included in the
Program reinforce each other and MCC
estimates they will together contribute
to an economic rate of return (ERR)
of 24%.
_______________________________
For more information, please contact:
Davy Kong
Press Officer
Millennium Challenge Corporation
Email: kongd@mcc.gov
