MCC names countries hit by sequester

Daniel Yohannes, CEO of the Millennium Challenge Corp. Photo by: MCC

At the Millennium Challenge Corp., the first casualties of its $45 million budget cut are three countries reselected for compacts this year.

“Countries that are expected to be impacted by sequestration include Ghana, El Salvador and Benin,” an MCC spokesperson told Devex in an exclusive interview.

As the sequestration turns to objective reality, MCC is willing to tighten its belt on its operational spending to protect critical programs.

This year, MCC has allowed Benin, El Salvador and Ghana to continue developing their second compact proposals after passing a rigorous selection process. MCC has already provided $307 million to Benin, $547 million to Ghana and $461 million to El Salvador under their initial compacts.

“Specific funding amounts for compacts will be determined in accordance with MCC’s normal compact development activities, the needs of our country partners, and the reduced budget envelope for FY 2013,” MCC said.

When President Barack Obama proposed $898 million for MCC’s operation this year, about $678 million would finance compacts with Benin, El Salvador and Ghana.

The budget, though, was not passed, forcing Congress to pass continuing resolutions to keep the U.S. government running through this year.

As early as 2011, these countries have been working on their compacts, forming development teams and finishing the first round of analysis tests.

Other candidate countries eligible for MCC compacts this year are Morocco, Niger, Sierra Leone, and Tanzania. MCC has yet to approve proposals from these countries.

While the U.S. Agency for International Development has suggested terminating agreements or reducing current or future funding of agreements to mitigate the painful impact of sequestration, MCC hints of scrimping on operation expenses to ensure critical operations are funded.

The MCC spokesperson told Devex: ”MCC has instituted an even higher level of control on all operational activities, including contracting, country operations, and other expenses, with the goal of prioritizing and protecting critical agency mission operations.”

Among the options being considered are freezing salary increases and minimizing expenses on training and others. MCC would scrutinize hiring of employees this year.

“MCC has frozen its salary tables for calendar years 2011 and 2012 for all federal employees, in accordance with presidential guidance, and has no plans to make adjustments in FY 2013,” the spokesperson noted. “In addition, MCC continues to place increased scrutiny on hiring, training, conferences, and travel.”

As sequestration squeezes funding for development projects, MCC tells its implementing partners “to adhere to a high standard of operational efficiency and performance.”

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About the author

  • Alliage profile

    John Alliage Morales

    As a staff writer, John Alliage Morales covers the Americas, focusing on the world's top donor hub, Washington, and its aid community - from Capitol Hill to Dupont Circle, Foggy Bottom to the downtown headquarters of USAID, the World Bank and Millennium Challenge Corp. Prior to joining Devex, Alliage worked for a variety of news outlets including GMA, the Philippine TV network, where he conducted interviews, analyzed data and produced in-depth stories on development and other topics.