Fact Sheet

July 23, 2009 | www.mcc.gov

Millennium Challenge Corporation’s 

Contribution to Aid for Trade

Trade is one of the greatest drivers of development. 

Developing countries that expand their trade at 

a faster rate tend to have the largest declines in 

poverty, according to the World Bank’s 2008 Global 

Monitoring Report. 1 President Barack Obama 

stated, “I think it is very important for all countries 

to recognize that trade is an important engine for 

economic growth.” 2

MCC partner countries share this view and request 

“Aid for Trade” in their proposals for poverty 

reduction assistance through the U.S. Government’s 

Millennium Challenge Corporation (MCC). As a 

result, 61 percent or $3.4 billion of MCC assistance to 

its partner countries can be considered Aid for Trade, 

making MCC the largest source of these pro-growth 

development funds within the U.S. Government’s 

foreign assistance portfolio over the past three years.

Aid for Trade strives to help developing countries, particularly least-developed countries, create the capacity to 

trade by removing internal barriers to trade, building institutional capacity in areas such as customs and national 

standards, developing trade-related skills, and building the infrastructure needed to enable trade and propel the 

country forward.

Aid for Trade Defined*

Aid for Trade is a broad concept and includes:

 Technical assistance — helping countries develop trade strategies, negotiate more effectively, 

and implement outcomes. 

 Infrastructure — building the roads, ports, 

and telecommunications that link domestic and 

global markets. 

 Productive capacity — investing in industries 

and sectors so countries can diversify exports 

and build on comparative advantages. 

 Adjustment assistance — helping with the costs 

associated with tariff reductions, preference erosion, or declining terms of trade.

*Source: World Trade Organization
Millennium Challenge Corporation’s Contribution to Aid for Trade, July 23, 2009 2

Aid for Trade: An MCC Priority

MCC works in partnership with eligible countries that identify the greatest contraints to their own development 

and establish their own priorities to create sustainable economic growth that delivers tangible results for the 

poor. While each country’s grant is unique, each MCC partner country places a high priority on increasing 

competiveness and facilitating domestic commerce and regional and international trade. 

Compact Country*

Compact Amounts

($ millions)

Aid for Trade

($ millions)

Aid for Trade in 

Compact (%)

Armenia 236 91 39

Benin 307 189 61

Cape Verde 110 87 79

El Salvador 460 382 83

Georgia 295 179 61

Ghana 547 240 44

Honduras 215 193 90

Lesotho 363 98 28

Madagascar 110 53 48

Mali 461 136 29

Mongolia 285 188 66

Morocco 698 532 76

Mozambique 507 222 44

Nicaragua 175 123 71

Tanzania 698 579 83

Vanuatu 66 55 83

Total 5531 3348 61

Eight Threshold Programs also include aid for trade activities, totaling $36 million. These programs are designed 

to help countries improve economic, social, and political policy performance measured by third-party data in key 

areas that foster an environment for economic growth. 

of MCC’s Compacts Support Aid for Trade

61%

* Compacts with Burkina Faso and Namibia signed in FY 2008 will be reported in the fiscal year they enter into force.
Millennium Challenge Corporation’s Contribution to Aid for Trade, July 23, 2009 3

Examples of MCC Investments in Aid for Trade:

In Benin, inefficient port operations and aging infrastructure result in delays and high costs. MCC’s $169 million 

Access to Markets Project aims to improve port performance and security, expand capacity, and reduce costs. The 

expansion and modernization of the port will reduce delays and increase the volume of imports and exports. 

In Georgia, MCC has provided $49.5 million to fund critical repairs to the North-South Gas Pipeline, which provides heat to homes and businesses throughout the country and exports Russian gas to Armenia. The completed 

rehabilitation of the gas pipeline will reduce leakage, enable a safe increase in the import and export of gas, and 

provide reliable heat and electricity to over one million Georgians.

In Honduras, as part of a $70.7 million rural development project, farmers are gaining better access to credit, 

feeder roads that connect farms to markets, training in business and agricultural practices, and institutions and 

instruments to support production and marketing of high-value horticultural crops. MCC investments also support a $125.7 million major road improvement program to link the Atlantic port of Puerto Cortes to Pacific ports 

and major production centers in Honduras, El Salvador, and Nicaragua. The program has helped more than 3,600 

farmers cultivate over 4,233 hectares of high value horticulture crops and is currently constructing over 140 kilometers of highways and roadways.

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U.S. Aid for Trade Fiscal Years 1999-2008 3
Millennium Challenge Corporation’s Contribution to Aid for Trade, July 23, 2009 4

In Mali, a landlocked country that depends on air routes for trade, the $181 million Bamako-Senou Airport 

Improvement Project will remove constraints to air traffic and increase the airport’s efficiency in handling freight 

and passenger traffic. The establishment of appropriate institutional mechanisms to ensure effective management, operation, and maintenance of the airport facilities over the long term will complement the infrastructure 

improvement activities. 

In Morocco, a $300.9 million Fruit Tree Productivity Project will stimulate growth in the agriculture sector and 

encourage stakeholders to organize and link to high value domestic and international markets. The program expects to improve the livelihoods of approximately 136,000 farm households in rural areas of the northern, central, 

and southern regions of Morocco. 

In Tanzania, a $372.8 million Transport Project is addressing the inadequate transportation network. To increase 

commerce and help connect communities with markets, schools, and health clinics, the project will rehabilitate 

up to 425 kilometers of trunk roads, connecting the seaport of Tanga with Horohoro at the Kenyan border and 

improving roads along the Mtwara corridor. It will also upgrade the airport on Mafia Island and includes funds for 

road maintenance to enhance Tanzania’s capacity to maintain its road network.

Zambia’s recently completed $22.7 million Threshold Program allocated $6.2 million to remove barriers to trade 

and build capacity by upgrading and modernizing customs techniques and integrated border control management. 

It strengthened inspections at the borders through import and export quality monitoring, standardization, and 

certification. It piloted the Customs Accredited Client Program, which allows large-scale Zambian importers and 

exporters, who meet security and transparency criteria, to avoid lengthy delays. The program has had a significant 

impact on border operations, reducing the number of days required to export goods from 60 to 30 and the number 

of days to import goods from 62 to 31.

1 World Bank, Global Monitoring Report 2008, p. 13 (http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTGLOBALMONITOR/EXTGLOMONREP2008/0,

,menuPK:4738069~pagePK:64168427~piPK:64168435~theSitePK:4738057,00.html)

2 Remarks by President Obama at Press Conference with Brazilian President Lula on March 14, 2009. 

3 United States Trade Capacity Building Database (http://qesdb.usaid.gov/tcb/index.html)