WASHINGTON, D.C., Deception and a total lack of understanding by the Liberian Delegation to Washington, D.C. show why the Government of President Weah failed the MCC Government Effectiveness measures.
On September 15, 2021, the Government of Liberia put out a Press Release in Front Page Africa stating, “Influential U.S. Senator Lindsay Graham has committed to rallying his congressional colleagues of the Republic Party to sign a “Letter of Support” for Liberia’s second bid of the coveted Compact Program under the MCC.”
The press release suggests that a Republican Senator, particularly one who sided with Donald Trump by refusing to acknowledge President Biden’s victory, will influence an objective MCC process reveals why optimism surrounding President Weah’s ability to govern and develop Liberia has faded.
Countries do not and should not lobby for the MCC Compact because eligibility for assistance is based on per capita income and U.S. Law. Specifically, 22 U.S.C. subsection 7701, 7707(a); U.S. Public Law 108-199, SEC 607-608 of the Millennium Challenge Act of 2003.
Why Countries Do Not Lobby the MCC
MCC’s mission is to reduce poverty through economic growth, so the correlation between growth and poverty reduction is essential to its model and winning the Compact – not lobbying.
According to the International Monetary Fund (I.M.F.) and the African Development Bank Group, Liberia’s G.D.P. growth rate declined by 1.25% in 2018, -3.5% in 2019, and -2.87% in 2020.
Under President Sirleaf, foreign direct investment to Liberia significantly increased in mining, palm oil, rubber, and timber. As a result, annual G.D.P. growth averaged 7.6% for ten years leading to a successful win of the MCC Compact.
Today, the hopefulness surrounding the inauguration of President George Weah has disappeared as Weah’s administration has been caught in a series of corruption scandals. Leading these scandals is an alleged missing 15 billion in banknotes followed by a 25 million mop up by the Minister of Finance using what audit reports deemed nonexistent money transfer agents and “mismanagement by the Minister of Finance” that turned out to be harmful to the economy.
Since the missing banknotes fiasco, the Liberian dollar has depreciated by 26%, and inflation rose as high as 30% – undermining local purchasing power and reducing living standards. In 2018, the World Bank reported household poverty is expected to grow from 42% to 44% by 2021, with the rural poverty rate estimated at 72%.
The IMF. predicts that in 2021, after three consecutive years of decline, the Liberian economy is expected to grow between 3.0% to 3.6%, a rate that is highly unlikely to improve living standards adequately for a population growing at 2.6% per year. Notably, following nearly 8% in total decline from preceding years.
Winning the MCC Compact
The MCC Board of Directors determines a country’s eligibility for assistance while the respective countries are responsible for meeting specific benchmarks to win the Compact. Governments need to demonstrate a commitment to honest and democratic governance, economic empowerment, investments in their people and show a commitment to reduce poverty while growing their economy.
The MCC Board of Directors is comprised of Secretary Antony Blinken, U.S. Secretary of State; Secretary Janet Yellen, U.S. Secretary of the Treasury; Katherine Tai, U.S. Trade Representative; Samantha Power, Administrator for USAID and several private sector members appointed by the U.S. President with the advice and consent of the U.S. Senate. It is indeterminable how Senator Lindsay Graham or Bakari Sellers will lobby this group to ignore U.S. Laws.
To ensure countries are evaluated equally, the MCC Board of Directors “relies to the maximum extent possible upon the best available objective and quantifiable indicators of policy performance.” There are 20 third-party indicators, and each country must perform above the median among each income group.
Liberia has done well in areas of Gender in the economy, access to credit, business start-up, and civil liberties.
But, on the other hand, Liberia has done poorly on 11 out of the 20 indicators, specifically on critical indicators like managing rising prices, Fiscal Policy, Land Rights and Access, Regulatory Quality, and Government Effectiveness.
Considering Liberia is a Candidate for the MCC eligibility for Fiscal Year 2022, there is a likelihood that the country could win the Compact. But, first, President Weah needs to make several structural improvements to reduce poverty.
It appears that Liberia’s Ministers of State and Finance continue to show the government’s ineffectiveness and wasteful spending by believing that Republic Senator Lindsay Graham and lobbyists Bakari Sellers will magically improve the Liberian economy without the Liberian government doing its job.