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You are here: Home/News/Article/Burkina Faso: Government signs $481mn aid compact with United States

Burkina Faso: Government signs $481mn aid compact with United States

Published date:
Monday, 14 July 2008

'The United States wants Burkina Faso's compact to succeed in every way - for the benefit of the people of Burkina Faso and as a model of stability and growth in West Africa,'Rice said at the July 14 compact-signing ceremony in Washington.

Rice was joined by Burkina Faso's president, Blaise Compaoré, whose leadership she praised as an example to the region. "You are ushering in reforms that are necessary to empower your fellow citizens to lead lives of hope and to help them turn a new page in the story of Africa."

The $480.9 million compact, signed by Ambassador John Danilovich, chief executive officer of the Millennium Challenge Corporation (MCC), and Burkina Faso's finance minister, Jean-Baptiste Marie Pascal Compaoré, will fund a five-year effort developed by authorities in Ouagadougou to reduce poverty by improving schools, building and upgrading roads to deliver goods to market, and investing in agriculture and land reform.

Established by the Bush administration in 2004, the MCC provides supplementary grants above traditional foreign aid programs to the governments of the world's poorest nations that demonstrate their commitment to improving governance, encouraging greater economic freedoms and investing in their citizens to reduce poverty by promoting growth.

The MCC represents a new spirit of partnership, Rice said, which also can be seen in White House initiatives to confront the spread of HIV/AIDS and malaria and through other aid programs in Africa and elsewhere. "There's a wonderful spirit that the MCC has developed in the developing world, which is to think about what countries can do for themselves and to have the United States as a partner."

The landlocked West African nation has a population of 15.2 million that ranks 176th out of 177 countries in the United Nations Development Programme's 2007 Human Development Index. While its economy largely is dependent on subsistence farming, since 2004 its government has been undertaking a gradual effort to privatize state-owned enterprises and attract foreign investment, particularly in its mining sector. But economic growth has been hampered by conflict in neighboring Cote d'Ivoire.

To qualify for the grant, Burkina Faso was evaluated under the MCC's 17 policy indicators -- a scorecard to gauge the country's commitment to democracy and potential for undertaking key reforms. While initially eligible in 16 areas, the MCC awarded a $12.9 million "Threshold Grant" in 2005 to help Burkina Faso improve girls' education, its remaining qualifying factor. Teaming with the U.S. Agency for International Development, Burkina Faso used the grant to establish 132 "girl-friendly" schools across the country, improving its educational system and opening the way to the compact.

The new compact will build on this success with funds including: $28.83 million for educational programs and new classrooms; $141.91 million to improve farming productivity by investing in new irrigation and water management projects, delivering technical assistance to farmers and extending access to rural credit; $194.13 million for road building; and $59.93 million toward developing a system for land use and ownership -- an important but legally complex issue facing many emerging economies.

Since its inception in 2004, the MCC has approved $6.2 billion in compacts with 16 other partner countries: Madagascar, Cape Verde, Honduras, Nicaragua, Georgia, Armenia, Vanuatu, Benin, Ghana, Mali, El Salvador, Mozambique, Lesotho, Morocco, Mongolia and Tanzania.

AGOA Forum opens in Washington

America's commitment to alleviating poverty through private investment and trade topped the agenda at the opening of the African Growth and Opportunity Act (AGOA) Forum in Washington earlier in the day.

Since 2000, AGOA has granted duty-free access to the American market for more than 6,500 African-made products. The conference runs July 14-16 and will feature a forum of civil society leaders from across Africa, a meeting of senior officials among the 41 nations currently participating in AGOA and a meeting of American and African business leaders to consider how the private sector can complement government-to-government efforts to alleviate poverty. (See "Africa Forum to Focus on Expanded Trade, Economic Growth.")

"One of the hallmarks of the U.S. government and the American people is a steadfast commitment to global development, to ending the scourge of poverty that robs communities of hope and opportunity," Rice said. "The United States also continues to be a staunch and loyal friend of Africa, where in the face of incredibly acute development challenges, we see a continent of enormous promise, increasingly willing to tackle its own challenges to create a better life for Africans everywhere."

A fact sheet (PDF document) outlining Burkina Faso's Millennium Challenge Compact is available from the Millennium Challenge Corporation Web site.

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