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Sierra Leone’s progression to implement the Millennium Challenge Corporation (MCC) Grant is a pathway towards the achievement of sustainable development in the country.
Since 2018, Sierra Leone under His Excellency President Julius Maada Bio has made notable strides aimed at economic recovery, social development, governance reforms, environmental sustainability efforts, and international cooperation. These developmental efforts made possible for international recognition, and confidence by the country’s development partners.
In December 2023, the MCC Board of Directors reselected Sierra Leone as eligible to continue developing a compact. Similarly, on September 27, 2024, in Washington DC, the Chief Executive Officer of MCC, Alice Albright and Sierra Leone Minister of Finance Sheku Bangura signed a $480 million compact designed to help millions of people gain access to affordable and reliable electricity.
The MCC compact grant represents a significant opportunity for Sierra Leone, particularly in addressing critical challenges in its energy sector. MCC evaluates the policy performance of countries using a set of 20 third-party indicators categorized into three main areas: ruling justly, encouraging economic freedom, and investing in people
Each country is assigned with a scorecard that reflects its performance across these indicators. To pass the scorecard, a country must meet specific criteria:
A country must pass at least 10 out of the 20 indicators.
It must achieve at least one passing score in each of the three categories.
It must pass either the Political Rights or Civil Liberties indicator (known as the Democratic Rights “hard hurdle”).
It must also pass the Control of Corruption indicator (known as the Control of Corruption “hard hurdle”).
1. Economic Development and Poverty Reduction
The compact is crucial for the country’s economic development and poverty reduction efforts. The MCC compacts are designed to provide significant financial assistance to eligible countries that demonstrate a commitment to democratic governance, economic freedom, and investing in their citizens. For Sierra Leone, which has one of the lowest levels of access to electricity globally, the compact represents an opportunity to secure funding for critical infrastructure projects that can enhance energy access, improve public services, and stimulate economic growth.
2. Infrastructure Improvement
Sierra Leone’s power sector is severely constrained, with only about 30% of the population having access to electricity. The MCC compact aims to address this issue by investing in transmission and distribution infrastructure, which is essential for reliable energy delivery. Improved infrastructure will not only benefit households but also businesses that rely on stable electricity supply for operations. This investment can lead to increased productivity and attract foreign investment, further driving economic growth.
3. Strengthening Governance and Institutional Capacity
Eligibility for an MCC compact requires countries to meet specific governance criteria, including political stability and adherence to democratic principles. For Sierra Leone, the grant encourages the government to continue upholding these standards. The grant process also involves capacity-building support for key institutions within the energy sector, which helps strengthen governance structures and promotes accountability. This focus on governance can lead to more effective public service delivery and better management of resources.
4. International Reputation and Relations
Sierra Leone’s eligibility for an MCC compact also has implications for its international standing. A successful partnership with the MCC has enhanced Sierra Leone’s reputation as a country committed to reform and development, potentially attracting additional international aid or investment from other sources. Conversely, losing eligibility due to concerns over democratic backsliding could damage its relationships with international partners who prioritize good governance.
5. Leverage for Political Reforms
The $450 million compact provides leverage for encouraging political reforms in Sierra Leone aimed at improving electoral integrity and governance practices. This potential leverage underscores the importance of maintaining eligibility as a means of promoting positive change within Sierra Leone.
In summary, the MCC grant would drive economic development through infrastructure improvements, strengthen governance frameworks, enhance international relations, and serve as leverage for political reforms.
