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Zambia Receives Grant for its Pursuit for Critical Economic and Democratic Governance Reforms

The Joe Biden administration is rewarding Zambia’s good governance and peaceful transition of power with hundreds of millions of dollars in potential development grant money while penalising Benin and Ethiopia for their democratic backsliding. The Millennium Challenge Corporation, an independent agency that invests in low-income and lower-middle-income countries, has selected Zambia and Belize as eligible for its five-year grants in the fiscal year that started 1 October. The so-called MCC compacts are worth around $400m to $500m and must be negotiated with the US government to go into effect. Zambia completed a prior compact with MCC in 2018 and demonstrates strong performance on MCC’s scorecard. A subsequent compact will support the Government of Zambia’s efforts to address the country’s pressing development challenges and pursue critical economic and democratic governance reforms following its recent democratic transition. MCC’s Board of Directors also reselected Indonesia, Lesotho, Malawi, Mozambique, Sierra Leone, and Timor-Leste for compact development; and Kenya and Kiribati for threshold program development. The Board reaffirmed its support for continuing compact development in Kosovo. In addition, the Board reselected Burkina Faso, Côte d’Ivoire, Niger, and Benin as eligible for concurrent compact programs for regional integration. However, due to Benin’s overall multi-year decline in its commitment to MCC’s eligibility criteria and the principles of democratic governance, the Board discussed and endorsed MCC’s determination to significantly reduce the portion of the planned regional investment that would be made in Benin through a concurrent compact.