IPNEWS: The Millennium Challenge Corporation’s (MCC) Board of Directors selected Liberia as newly eligible to develop a compact during its quarterly meeting on December 18. Liberia was selected in recognition of the progress the country has made to strengthen its performance on the MCC scorecard and the country’s commitment to pursuing critical economic and democratic governance reforms. The Board also discussed the new opportunities that the Millennium Challenge Corporation Candidate Country Reform Act, provides for MCC.
“MCC is proud of our longstanding history with Liberia and is enthusiastic about embarking on a new partnership to advance opportunities for the people of Liberia,” said MCC’s Chief Executive Officer Alice Albright.
As part of its annual discussion on country selection, MCC’s Board also reviewed the policy performance of previously selected eligible countries. In doing so, MCC’s Board reselected Cabo Verde and Senegal to continue developing regional compacts, The Gambia to continue compact development, and the Philippines to continue developing a threshold program. While Tanzania was also reselected to continue developing a threshold program, the Board expressed concern about reports of disappearances, a rise in political violence, and restrictions on freedom of peaceful assembly and the press. The Board noted that Tanzania has an opportunity to open political space and advance democratic reforms and urged the government to take steps to strengthen the protection of democratic freedoms ahead of national elections in 2025.
However, the Board deferred a Togo Compact reselection vote to provide the government additional time to take meaningful actions to strengthen protections for democratic rights and fundamental freedoms as it transitions to a new system of government next year.
Finally, the Board received an update on Mozambique and discussed concerns about the October 2024 elections and post-election violence. The Board noted its intention to continue to closely monitor developments in the country, including the forthcoming Constitutional Council ruling. MCC and the Board expect all partner countries to demonstrate an ongoing commitment to the principles of inclusive democratic governance that underpin MCC’s eligibility criteria.
Wednesday marked the final Board meeting under the Biden administration and included the participation of presidentially appointed Board members, including Secretary of State Antony Blinken, Congressman Ander Crenshaw, and other senior officials. MCC CEO Albright reflected on successes in recent years including investing $4.1 billion across 15 programs that are slated to benefit nearly 80 million people, and thanked Secretary Blinken for championing MCC’s life-changing work and incentivizing economic growth and good governance around the world.
The Millennium Challenge Corporation is an independent U.S. government development agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants that pair investments in infrastructure with policy and institutional reforms to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights.
This week, President Joseph Boakai announced a milestone achievement for Liberia on Wednesday evening, revealing that the country had secured a second compact from the Millennium Challenge Corporation (MCC), a U.S. government initiative aimed at reducing poverty and fostering economic growth.
In a live address delivered from the grounds of the Executive Mansion in Monrovia, President Boakai celebrated the news as a testament to Liberia’s progress in governance and reform.
“According to the MCC, Liberia has qualified for a second compact due to our outstanding performance in governance and reform,” he said. “This giant achievement will unlock resources for our development agenda and help address the binding constraints to growth in our country.”
The president lauded the collective efforts of Liberians, emphasizing the significance of the achievement for the nation. “This is not just a victory for the government but for all Liberians. It reflects the international community’s confidence in our ability to deliver progress through unity and reform,” he said. “Let us join hands to celebrate this collective success.”
His remarks sparked widespread celebrations across the country, with Liberians expressing hope that the compact, alongside key foreign direct investments, would provide a much-needed boost to public infrastructure and economic opportunities.
Meanwhile, ArcelorMittal Liberia, one of the nation’s most prominent private investors, joined in the celebrations, congratulating President Boakai and the Liberian people. The company reaffirmed its long-term commitment to Liberia, highlighting the alignment between MCC’s principles of economic growth and good governance and its own investment strategy.
“ArcelorMittal believes that economic growth is more effective at reducing poverty in well-governed countries,” said a company official.
As Liberia’s largest foreign investor, ArcelorMittal has committed over $2.5 billion to the country, making it the second-largest employer after the government. The company’s $1.7 billion Phase Two expansion project, which is currently underway, includes critical upgrades to Liberia’s infrastructure. These efforts encompass expanding the Buchanan-Yekepa railway, renovating the Buchanan Port, and constructing a state-of-the-art ore processing plant in Zolowee, Nimba County.
These investments have already generated jobs, supported community development, and bolstered Liberia’s broader economic growth. ArcelorMittal views the second MCC compact as a critical complement to its efforts, with the potential to in an important way enhance the country’s economic trajectory.
An unnamed senior official at ArcelorMittal Liberia noted the synergy between the compact and the company’s investments. “If ArcelorMittal expands next year and with the MCC compact, coupled with the mining sector’s growth, the country is expected to generate substantial government revenue through taxes and royalties and create much-needed jobs for Liberians,” the official said.
The MCC, established by Congress in 2004, has been a cornerstone of U.S. efforts to promote sustainable development in countries with strong democratic values. To date, the agency has invested $17 billion globally in agriculture, education, energy, and infrastructure projects.
Liberia first engaged with the MCC in 2010, receiving a $15 million threshold grant to address land access, girls’ education, and trade reforms. That success paved the way for a $257 million compact in 2015, which modernized the power sector, rehabilitated the Mount Coffee Hydropower Plant, and improved road systems.
Despite these advancements, challenges such as financial instability and power theft hindered the full impact of the first compact, which achieved an 8.4% Economic Rate of Return (ERR), below MCC’s 10% benchmark.
Liberia’s qualification for a second compact reflects improvements on the MCC scorecard, which evaluates governance, health, education, economic freedom, and corruption control. President Boakai’s administration has positioned these reforms as a foundation for sustained economic progress.
The second MCC compact comes at a time when Liberia’s economic growth projections are optimistic. Both the World Bank and IMF forecast Liberia’s economy to grow by 5.8% and 5.1%, respectively, in 2025. The mining sector is expected to be the primary driver of this expansion, underscoring its role as the backbone of Liberia’s economy.
“Liberia’s reliance on the mining sector underscores its pivotal role in fostering economic resilience and sustainable growth,” the ArcelorMittal official said. Investments in mining infrastructure, coupled with the MCC compact’s resources, are poised to increase production capacity and export revenues significantly.
As Liberia moves forward, the collaboration between the government, international partners, and private investors like ArcelorMittal will be instrumental in addressing growth constraints and building a resilient economic future.
And, President Boakai’s announcement has not only highlighted the country’s steady progress but also rekindled hope for greater achievements on the horizon.
