Agriculture and Rural Transport Selected as Investment Areas for Next MCC Compact

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Agriculture and Rural Transport Selected as Investment Areas for Next MCC Compact

December 22 –The Government of Mozambique formally endorsed the selection of agriculture and rural transport as the key sectors for the next “compact” of development projects financed by the U.S. Government’s Millennium Challenge Corporation (MCC).

Following more than six months of interviews with hundreds of Mozambique-based stakeholders, intense economic analysis by MCC and its Mozambican partners, and a substantive review by an expert panel appointed by the Government of Mozambique, MCC and the Government of Mozambique jointly identified these two sectors as the key constraints to more inclusive economic growth in the country.

The next step in the compact development process is to analyze and identify the causes of Mozambique’s relatively poor performance in the agriculture sector and the high cost of rural transport.  Based on these findings, the Government of Mozambique’s compact development team led by National Coordinator Higino de Marrule will develop specific proposals for consideration in this MCC compact.

U.S. Ambassador to Mozambique Dennis W. Hearne said, “This forthcoming MCC compact is an opportunity to make lasting investments in Mozambique’s agricultural sector, which plays a critical role in the development of the entire country.”  He commended the MCC team’s hard work and persistence throughout this compact development process.

According to MCC Country Director Kenneth Miller, factors such as the low use of fertilizer and substandard seeds may contribute to the poor performance of Mozambique’s agricultural sector, while gaps in the rural road network raises costs for farmers and limits opportunities for export.

Created in 2004, MCC is an innovative foreign assistance agency designed to deliver programs that reduce poverty in developing countries through economic growth.  MCC and the Government of Mozambique developed a five-year, $506.9 million compact in 2008 to invest in water and sanitation, roads, land tenure, and agriculture.  Through investments like the construction of 614 rural water points in Nampula and Cabo Delgado provinces, the number of people with access to clean water more than doubled.

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