Washington, U.S– Finance and Development Planning Minister Augustine Ngafuan has highlighted a comprehensive overview of the Boakai-Koung administration’s advancements in securing Liberia’s eligibility for a second Compact with the Millennium Challenge Corporation (MCC).

 During a series of important meetings held in Washington, D.C., Ngafuan detailed the administration’s strategic initiatives aimed at assembling and enhancing an intra-governmental team dedicated to the ongoing monitoring of the MCC Scorecard. This initiative is crucial in ensuring adherence to the specific requirements laid out by the MCC, which are essential for Liberia’s continued partnership with the organization.

Ngafuan underscored the administration’s unwavering commitment to principles of transparency and accountability in governance. He outlined several ongoing measures designed to strengthen this commitment, including rigorous auditing processes of ministries, agencies, and commissions (MACs).

Minister Ngafuan asserted the importance of holding individuals accused of corruption to account and highlighted the formation of an asset recovery team tasked with reclaiming misappropriated state resources.

In an effort to further enhance diplomatic relations, Ngafuan emphasized the critical need to reinstate the U.S.-Liberia Political Dialogue, which he described as an essential structured framework for fostering bilateral cooperation and mutual understanding between the two nations.

During his discussions with pivotal MCC officials, such as Acting Assistant Secretary for the Economic Bureau of the U.S. State Department Amy Holman and Assistant Secretary of the Treasury Department for Fiscal Affairs Alexia Latortue, Ngafuan reiterated the government’s steadfast dedication to improving the livelihoods of the Liberian people.

He noted the collaborative efforts taking place between the Liberia Anti-Corruption Commission, the General Auditing Commission, and the Ministry of Justice, which are collectively working to prosecute individuals involved in corruption scandals effectively.

He, however, highlighted Liberia’s positive and constructive engagements with notable international partners that play a significant role in the nation’s development. He brought attention to key achievements, such as the approval of a substantial $210 million Economic Compact Fund (ECF) program by the International Monetary Fund (IMF) and the receipt of $60 million in direct budgetary support from the World Bank.

Ngafuan framed these accomplishments as clear indicators of the administration’s steadfast commitment to achieving critical socio-economic targets and improving governance standards in Liberia.

Addressing, MCC’s Managing Director of Policy and Evaluation, Daniel W. Barnes, recognized and praised Liberia for its proactive measures and dedication to combating corruption while striving to reduce poverty levels.

He assured the delegation of the MCC’s commitment to providing technical support to the intra-governmental team that is focused on monitoring and improving the MCC Scorecard.

Making a brief remark, Madam Holman expressed gratitude to the Minister Ngafuan and his delegation, conveying her impression for the level of work that has been implemented. She expressed her commitment to continuous working with the government.

Also speaking, Madam Latortue further noted the concerns expressed by the U.S. Treasury regarding the World Bank IDA replenishment. She conveyed confidence in Liberia’s candidacy for the pandemic resilience program.

She then assured the delegation of the US Treasury’s readiness to collaborate with the Government of Liberia on the reinstitution of the US-Liberia Political Dialogue, the support of the US CDC on the pandemic resilience program, and the preparedness of working with Liberia on her fiscal programs, policy on public private partnerships (PPP), infrastructure investment, capacity building.

The Liberian delegation at the meetings also included Agriculture Minister, Dr. Alexander Nuetah, Deputy Finance Minister for Economic Affairs Hon. Dehpue Y. Zuo and the Deputy Chief of Mission at the US Embassy in Washington D.C. Isaac Yeah, Mr. Edward Smith, Special Assistant to the Minister and the Communication Director at the Ministry, Mrs. Patience amongst others.

Monrovia – The decision by the Millennium Challenge Account in January 2021, announcing that it was folding its Compact with the Government of Liberia, came as a major blow to the administration of President George Manneh Weah.

Liberia ended its first compact in 2021 which was a grant of US$257 million that contributed to the rehabilitation of the Mount Coffee Hydroelectric dam. MCC Compact is highly rated by countries for its focus on relaxing constraints to private sector growth.    

By Rodney D. Sieh

The Compact which had brought improvement to the electricity supply and left the Liberian government with a sustainable, data-driven road maintenance system, saw its run come to an end after consistent failures by the government over several governance lapses, that made it nearly impossible for the program to continue.

Compact key to Hydro, Water Supply

Over the past years, the Compact had contributed US$146.3 million to the rehabilitation of the Mt. Coffee Hydro Power Plant, the single largest support of any donor to the power plant, constituting 40 percent of the total US$350 million spent to rebuild the hydropower plant.

The supply of 88 Mega Watts power generating capacity at Mt. Coffee represented the largest source of power and renewable energy supply for the Liberia Electricity Corporation (LEC).

The investment in the Mt. Coffee was instrumental in helping the LEC to expand more reliable and affordable power supply to more than 82,000 homes, businesses, and other entities, compared to a little over 34,000 when Mt. Coffee came online in 2016. Mt. Coffee also allowed LEC to reduce the average number of electricity outages by 45 percent since the start of the Compact. Outages are also much shorter now, with a reduction of 83 percent in the average duration of outages.

Prior to the MCC involvement with the hydro, Liberia lacked a skilled workforce to operate and maintain the hydropower plant. The MCC contribution was key to providing on-the-job training for operators and maintenance staff, which allowed for sustainable local operation and maintenance of Mt. Coffee. Additionally, the project has already trained three generations of trainees in hydropower plant operation and maintenance.

Under the Compact, electricity tariffs reduced from US$0.56 per kilowatt-hour to US$0.35 per kWh, representing a 37.5 percent decrease. While this is still a very high tariff, this decrease has made electricity more affordable for ordinary consumers, particularly marginalized households and small and medium enterprises.

Besides the hydro, the MCC compact also funded the construction of a new 48-inch diameter Raw Water Pipeline between Mt. Coffee and the White Plains Water Treatment Plant to replace a damaged 36-inch diameter pipeline that had not been in use since before Liberia’s civil war. By drawing water from Mt. Coffee, the new pipeline’s operation will eliminate saltwater intrusion into the Liberia Water and Sewer Corporation (LWSC) water treatment plant at White Plains, which occurs in the dry season when the St. Paul River experiences low water levels. With the new bigger pipeline, the municipal water supply is not only of much higher quality but because of the use of gravity flow to transport water into the system, LWSC will save an estimated US$780,000 annually in the cost of pumping water into the treatment plant. The new expanded pipeline will contribute to the increased supply of better-quality water to about 1 million residents of Monrovia and surrounding areas. The total project cost is around US$18 million.

A New Lease on Life

Last week, after five years of failures in meeting the criteria and requirement of the Compact, the Weah administration met the threshold that enables it to qualify for a possible return to the Compact.

In the Fiscal Year 2023 scorecard released by the MCC, Liberia earned an unprecedented pass of twelve out of the 20 indicators for the first time since 2008. The country scorecards which is a consolidation of each individual country scores of each of the policy indicators including Economic Freedom, Ruling Justly, and investing in people.

This year unprecedented pass follows a series of other positive international assessments. Recently, Liberia was praised by the Board of International Monetary Fund (IMF), which approved US$22 million in support to the country’s reserve for the Liberia passing Quantitative Performance Criteria under the IMF-supported program. The IMF shows that Liberia continues to peruse impressive macroeconomic and governance reforms.

The IMF in its country economic assessments for the 2022 lauded the Liberia Government for challenging and positive governance initiatives and policies which have broadly maintained macroeconomic stability – lowering inflation within single digit and maintaining a positive real GDP growth of 3.7% despite the monumental global economic challenges, including COVID and the current war in Ukraine. The IMF report also lauded the passage of the new anti-graft LACC legislation.

Following the IMF report, the US Department of States issued its Fiscal Transparency report for 2022, which pointed out significant progress by the Government of Liberia. Key areas of progress in the report included the Government ensuring that the 2022 National Budget was enacted within a reasonable period and that actual revenues and expenditures accurately corresponded with those enacted in the budget, while also ensuring that information on debt for State Owned Enterprises were widely accessible and available online for public scrutiny.  

The passing of the MCC Scorecard with a record 12 out 20 indicators surpassing the 9 out 20 in 2022 reinforces the accurate and fair assessment of the continuous improvement in the governance process in Liberia as have been articulated in both the IMF and US State Department reports. Liberia’s MCC success could not have been achieved without the government of Liberia passing the score on the Control of Corruption even if the Government had passed 19 of the 20 policy indicators. Much of Liberia success was generated from the policy areas covering Economic Freedom and Ruling Justly, passing 11 out of the 14 combined indicators in these two categories. Liberia could only pass one indicator out of the six indicators under the Investing People Category, which point the need for more investment in human capital- education and health.

Under the Economic Freedom policy area, Liberia for the first time passed the Trade Policy indicator. Trade policy is a strong indication of the degree of economic freedom and access to trade. The pass indicates that trade liberalization is being achieved in Liberia as the Government works to reduce barriers and bottlenecks to trade. Recent, AMP Terminal in conjunction with the Government of Liberia launched a port digitization platform with the aim of reducing barriers to trade and easing customs processes.  

What Does it all mean?

The Government also passed Control of inflation indicator. The Government brought inflation down from a high of 30 percent in 2019 to now around 7 percent and has run one of the most stable macroeconomic regimes in the West African region. The Government passed a new indicator called   Employment Opportunity, which gauges attempts by countries and economies to solve employment challenges.

Under the Ruling Justly policy area, Liberia passed 5 out of the 6 policy indicators: including the MUST PASS indicator on Control of Corruption, and other political governance indicators such as Rule of Law, Freedom of Information, civil liberties, and political rights. Passing control of corruption is a must and is the most coveted pass for countries. The corruption indicator appears to suggest that Liberia continues to make progress on anti-corruption reform. The country recently passed a robust LACC law that strongly empowers seven commissioners to independently fight corruption. Recruitment is currently ongoing for the new LACC but recently it faced some setback as the Supreme Court has placed a stay on implementing certain aspects of the law. However, many experts believe this is only temporary setback as the new law is expected to take its course.

While congratulating the Government of Liberia for success pass for the 2023 Millennium Challenge Compact Scorecard, the US States Government through its Embassy in Monrovia also urge the Government of Liberia to increase its performance in the “Investing People” scorecard indicators with focus on investments in primary education, child health, immunization rate, Girl Primary Education Completion rate, etc. The need to increase performance in Investment was also highlighted in the recent World Bank report on human capital which also shows that Liberia needs to invest more in education, especially primary and girl’s education.

To address improving the performance in these indicators, the Government working in collaboration with World Bank will provide about US$500 million to support and implement the new Education Sector Plan developed by the Ministry of Education. Support and Financing of the new education sector planned was fully discussed with the World Bank by the Minister of Education and Minister of Finance and Development Planning.  

While supporters of the government have been celebrating the passage of the MCC Compact, the saga is still not over. Passing the MCC scorecard does not immediately qualify Liberia for a compact but represents a necessary first step that put Liberia in a poll of 66 countries that advance to the next stage of evaluation to determine qualification for Compact. During this period of the evaluation, the MCC Board decision will be based on the trend in governance   and scorecard indicators, Post Compact assessment-evaluation of the of the first compact, and the Government plan to invest in human capital.

Monrovia – The United States Government says it is proud of the results of the Millennium Challenge Corporation (MCC) Liberia Compact being implemented by the Millennium Challenge Account – Liberia, which encourages economic growth that reduces poverty, creates new opportunities, and improves the lives of Liberians.

In a letter address to media houses in Monrovia on Thursday, US Ambassador to Liberia, Christine Elder, said as Liberia approaches a crucial point in fulfilling its commitment to increase access to affordable power for its citizens, it is an ideal time to address recent questions about the Millennium Challenge Corporation’s Liberia Compact.

In the letter, Ambassador Elder pointed out that the Mount Coffee Hydropower Plant is the best example of what this Compact has accomplished, adding, “Destroyed during the wars, the hydropower plant’s four turbines are now online and can produce 88 megawatts of power — more than doubling the country’s generation capacity.”

“However, this is only part of what is needed to bring affordable electricity to more Liberians; the current phase of the project now is to ensure that electricity reaches Liberians’ homes and businesses as well as becoming a solvent, self-sustaining public utility,”, the US envoy emphasized.

Ambassador Elder explained that Liberia Compact has two goals: increase access to reliable and affordable electricity, and strengthen Liberia’s roads sector and that the MCC task is to work with other donors in these sectors to maximize the impact for Liberia, stressing the need for the Compact to also prioritize the training of Liberians in the various sectors to maintain the progress made once the program ends in 2021.

She indicated that this requires infrastructure improvements through the erecting of towers, stringing transmission wires, and building relay stations and customer service centers which will be implemented by the Liberia Electricity Corporation (LEC).

Elder added that providing affordable electricity to Liberians will also require improving the financial, operational, and customer service procedures of LEC and investing in capacity building that will put LEC on a path for sustainable growth.

“Completing this phase is a massive, historic undertaking, which the Liberian Government decided to implement with the support of an experienced Management Services Contractor, a firm which holds temporary leadership responsibility for operation of the utility, improvements to the system, and building the capacity of future LEC leaders,” she noted.

The US envoy disclosed that the Management Services Contractor engagement was awarded by the LEC after a transparent and open international competitive bidding process, managed with rigorous oversight by the U.S. government.

According to her, both the U.S. Government (through MCC) and the LEC Board of Directors approved the selected firm and retain oversight by approving training and management plans along with other strategic reports.

She clarified that the series of checks and balances ensures that the contributions of American taxpayers are being used with the greatest efficiency, and that Liberians benefit from the program within the agreed time frame.

Ambassador Elder pointed out that the Liberia Compact has many features to ensure accountability, including internationally accepted guidelines for procurement, financial management, and public disclosures.

It also works under additional safeguards, including two international teams, a fiscal agent and a procurement agent, as well as implementation support and oversight from MCC in these areas.

The MCC is a U.S. foreign aid agency that has been helping partner governments fight global poverty since its creation by the U.S. Congress in 2004.

It provides time-limited grants called “compacts” to reduce poverty through private sector investment driving economic growth.

The Liberian Government during the Ebola crisis in 2014 appealed to the US Government for US$257 million Liberia Compact which was signed in January 2016.

The Liberia MCC model is different from other forms of U.S. assistance because is being implemented by the Liberian government through an entity called the Millennium Challenge Account – Liberia.