Benefits of the MCA grant to Namibia

At the turn of the 20thCentury the world was challenged by its inability to see the impact that technology could have on the lives of ordinary people as well as the potential global fallout attributed to an electronic bug called Y2K.

The irony in the current controversial debate surrounding the development funds granted to Namibia under the Millennium Challenge Account (MCA) Compact, is that even though the agreement is based on sound corporate governance principles and known parameters, some engage the debate based on their own perceptions that the agreement has limited benefit for Namibia. Could this be our Y2K – a political bug which is intended to sabotage our nation’s system? Let us review the facts.
The Millennium Challenge Account Compact agreement was signed on July 28 2008 between the governments of Namibia (GRN) and the United Sates of America (USA) securing a US$304,5 million development grant for Namibia spread over a period of five years.
It was signed following a detailed development proposal which was submitted to a US development agency, the Millennium Challenge Account (MCC) by the GRN. The deal includes mechanisms to optimise the benefits for the intended beneficiaries and therefore is expressive on issues such as taxation, covenants, Namibia’s contribution, project parameters and performance indicators to indicate progressive development success.
The MCC is a United States Government corporation designed to work with some of the poorest countries in the world. Established in January 2004, MCC is based on the principle that aid is most effective when it reinforces good governance, economic freedom and investments in people. MCC’s mission is ‘to reduce global poverty through the promotion of sustainable economic growth’. Before a country can become eligible to receive assistance, MCC looks at its performance on independent and transparent policy indicators.
Led by a chief executive officer and overseen by a board of directors, MCC is responsible for the stewardship of the Millennium Challenge Account, which receives funds appropriated by the US Congress every year. The performance of the MCC in turn is assessed annually by the impact that it has made in developing countries and consequently future funds approval is based on proven performance.
A principle of the MCC ‘is to work in partnership with eligible countries which are responsible for identifying the greatest barriers to their own development; for developing their own priorities for a compact, with input from the public, as well as civil, political, and private sector actors; and for implementing compact programs once they have been approved. Participation in the MCA program requires high-level engagement and leadership by the partner government, as well as civil society and other domestic stakeholders to ensure the effectiveness and sustainability of an MCC investment.’
Helen Keller, a woman who was blind and deaf all of her life once said: ‘The most pathetic person in the world is someone who was sight but has no vision.’ To receive financial aid is only having ‘sight’. However, to understand the efficient application of the funds and the anticipated long-term impact of the application of these funds on the improved prosperity of those that are to benefit from these funds, translates into having a clear ‘vision’.
Vision 2030 is a clear development vision expressed in pragmatic terms in the Third National Development Plan (NDP3). Namibia had the vision to develop a detailed development proposal, in terms of Vision 2030 and NDP3 – for the benefit of our Namibian people – which was submitted to the MCC after extensive consultations in all regions of the country over a period of three years. The proposal was submitted, reviewed and accepted, which resulted in the ‘in principle’ securing of development funds to the tune of N$2,3 billion for the benefit of our Namibian nation in need.
The Compact will come into force during July 2009 and the Ministries of Education, Agriculture, Water & Forestry, and Environment & Tourism will directly benefit from the agreement with specific performance indicators to be delivered on.
How can any entity dispute any grant of this magnitude if it was negotiated in good faith under stringent governance principles within an international development framework, which will serve our nation and its people with the sole return on investment expectation; growth and increased prosperity of our people?
If only a fraction of the schools are built; the targeted undereducated and unemployed Namibians receive training at community skills development centres, households benefit from better use of natural Namibian products and our tourism sector receives increased exposure globally, then this agreement is most certainly worth the energy invested into realising this vision.
Namibia cannot afford a Y2K-bug to sabotage any potential benefit that our people could derive from the MCA.

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