Africa Business Forum: U.S., Benin, Niger sign $504 million Regional Investment
MCC | 14th December 2022
By MCC
WASHINGTON (Dec. 14, 2022) — The Millennium Challenge Corporation (MCC) took center stage at today’s U.S.-Africa Business Forum as the United States, Benin, and Niger governments signed the first-ever MCC regional program — the $504 million Benin-Niger Regional Transport Compact.
Benin’s President Patrice Talon, Niger’s President Mohamed Bazoum, and MCC’s Chief Executive Officer Alice Albright were joined by U.S. Secretary of State Antony Blinken to sign the compact and celebrate taking a significant step in advancing two-way trade between the United States and West Africa.
“President Talon and President Bazoum, we are thrilled to launch these new partnerships with you today,” said Secretary Blinken. “The corridors that allow products to move between Niger and Benin, these form a critical foundation for business and also for livelihoods. The [Regional Compact] projects will bare the hallmarks of America’s partnerships. They will be transparent; they will be high-quality; they’ll be accountable to the people that they mean to serve; and they will also support good governance. When completed, these projects will make it faster and safer to transport goods along roads and across borders and they’ll connect Benin and Niger to bigger markets and grater opportunities…At this week’s U.S.-Africa Leaders Summit, we have made it a priory to mobilize these kind of investments, because we know this is how you create real, tangible benefits for people on both sides of the Atlantic.”
The Benin-Niger border crossing is one of the busiest crossings between coastal and land-locked countries in the region, with an average of approximately 1,000 vehicles per day. By pairing enhanced regional integration and policy reforms with the agency’s proven, data-driven development grants regional compacts can connect countries through foundational infrastructure — such as power, water, and roads — and catalyze economic growth.
“Connecting vibrant African regional markets is a critical piece of a broader and inclusive strategy to create sustainable economic growth,” said Albright. “Countries can grow faster, create more jobs, and attract additional private-sector investments when they are a part of dynamic regional markets. Nowhere is this more applicable than in West Africa. I am honored to be part of this historic partnership with Benin and Niger.”
Along with MCC’s bilateral and regional investments, Benin and Niger will also participate in the African Continental Free Trade Area (AfCFTA). Established in 2018, the AfCFTA is the world’s largest free-trade area with a market of more than 1.3 billion people; however, it is smaller, regional economic communities that may ultimately impact each country’s economic growth and influence the effectiveness of the AfCFTA.
“This compact is a major innovation in international corporation, and in cooperation between the United States, Benin and our brother country Niger,” said President Talon during his translated remarks. “It will help to bring together two neighboring countries to make the space more attractive to business investors…Development cannot only be from investments in infrastructure and investments in other basic needs, but it for the growth to be real we need private sector investment.”
“I would like to say how happy I am to participate in this [compact signing], which launches this Regional Compact between Niger and Benin,”said President Bazoum during his translated remarks. “Benin is a strategic partner for the development of Niger, because the Port of Cotonou is the closet port from Niamey…Our U.S. partners understood this, and have made sure that we have quality infrastructure between our two countries.”
Building Interconnected Economies of Scale
The Benin-Niger Regional Transport Compact is designed to reduce transportation costs along the corridor between the Port of Cotonou in Benin and Niger’s capital city of Niamey. MCC will invest $202 million in Benin and $302 million in Niger. These investments will each be further supported by $15 million contributions from the governments of Benin and Niger. The regional investment is expected to benefit an estimated 1.2 million people.
The compact is comprised of two primary projects: the Corridor Infrastructure Project and the Efficient Corridor Operations Project. The Corridor Infrastructure Project aims to reduce vehicle operating costs and increase travel speeds by improving 210 kilometers of roads, leading to faster and more efficient transit for goods between markets and along the transport corridor.
This includes the rehabilitation and upgrade of approximately 83 kilometers of road between the cities of Bohicon and Dassa in Benin, and the rehabilitation and upgrade of approximately 127 kilometers of road between the cities of Niamey and Dosso in Niger. The project also includes implementing the policy and institutional reforms necessary to help each government better undertake periodic road maintenance.
The Efficient Corridor Operations Project aims to reduce transportation costs along the transport corridor from Niamey to Cotonou by implementing reforms intended to impact and improve the efficiency of truck freight sector operations by addressing axle load management, regulatory review and capacity building, freight vehicle regulation, and the organization and establishment of a corridor authority.
The Benin-Niger Regional Transport Compact builds on the success of MCC’s current and prior investments programs in Benin and Niger, totaling $1.1 billion in grant funding. MCC’s programs in Benin include investments in the country’s power sector and the Port of Cotonou while the agency’s investment programs in Niger have focused on the country’s education, agriculture and road sectors.
The Millennium Challenge Corporation is an independent U.S. government agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights.