Millennium Challenge Corporation: Progress and Challenges with Compacts in Africa

In January 2004, Congress established the Millennium Challenge Corporation (MCC) to administer the Millennium Challenge Account for foreign assistance. MCC's mission is to reduce poverty by supporting sustainable, transformative economic growth in partnership with developing countries that create and maintain sound policy environments. MCC signs compacts obligating funds for such projects with countries it selects as eligible for this assistance, according to criteria outlined in MCC's authorizing legislation. Each compact has a maximum duration of 5 years. After signed compacts enter into force, MCC begins to disburse funds. For fiscal years 2004 to 2007, MCC received appropriations of almost $6 billion. MCC has obligated almost $3 billion for 11 compacts; $1.5 billion of this amount is for 5 compacts in sub-Saharan Africa (Africa). This testimony examines (1) the pace of MCC's initiation of compacts in Africa, (2) MCC projects and management structures in African countries with signed compacts, and (3) MCC's progress in disbursing compact funds. In preparing this testimony, GAO drew from, and updated, previous reports on MCC's compact development, obligations, implementation, management, and disbursements.