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Ghana could mark turning point in foreign aid program

ACCRA, Ghana—Last summer, when two American foreign aid experts visited this bustling capital for meetings about a new U.S. government aid grant, they were surprised to be invited to speak on a popular drive-time radio show.

"Who would want to listen to us?" they remembered thinking.

More than a few people, it turned out. Callers inundated the station, wanting to know exactly how the five-year, $547 million grant for agricultural development, part of a Bush administration foreign aid initiative, would be spent and who would spend it. People sent long, multipart text messages to comment on everything from Ghana's struggling farm sector to the spotted history of foreign aid in Africa.

That sort of vibrant public debate is part of what makes Ghana, with its change-minded government and robust economy, a haven of stability in turbulent West Africa. But its people are still very poor, and its lush landscape is dotted with aging roads and derelict power plants.

In short, it's the kind of place that President Bush had in mind in 2002 when he created the "Millennium Challenge Account," which is aimed at poor countries whose governments nonetheless are trying to do the right things.

To qualify for funds, countries must demonstrate a commitment to promoting human rights, fighting corruption, investing in health and education, and implementing free-market changes. The theory behind the initiative is that U.S. taxpayer money is best spent in places that are well-governed.

"We created the Millennium Challenge Account to support nations that govern justly," Bush said recently. "It doesn't make any sense for us to send taxpayers' monies to countries that steal the money."

For now the 11 Millennium Challenge grants, worth $3 billion, form just a sliver of total U.S. assistance to developing countries, which reached $27.6 billion in 2005. Much of that money goes to humanitarian emergencies or to places that are key to U.S. foreign policy, such as Iraq and Afghanistan.

But the Ghana grant, announced in August, is the program's largest, and it could represent a turning point. With Bush pledging to raise the program's budget from $2 billion to $5 billion, even larger grants are in the works, leading some experts to worry that it will suck money away from longstanding aid programs in countries that are less politically stable, but no less needy.

"If fully implemented, the initiative would represent ... a fundamental change in the way the United States invests and delivers economic assistance," Curt Tarnoff, an analyst with the nonpartisan Congressional Research Service, wrote in an August report.

John Danilovich, the head of the Millennium Challenge Corp., the government body Bush created to run the program, said the good-behavior grants won't replace U.S. aid for crises. He said he's looking "for results and returns," with the projected economic impact of each proposal determining the size of the grant.

But critics question how such a bottom-line-driven approach will work in places where data are scarce and economic projections unreliable. Last year, the Government Accountability Office, the congressional oversight agency, examined grants in Madagascar, Cape Verde and Honduras—the first three recipient countries—and found shortcomings in the way officials were measuring results.

"Congress remains skeptical," said Princeton Lyman, an Africa expert at the Council on Foreign Relations. "But I think the Ghana grant ... will be watched very closely."

The program is the product of increasing frustration in Washington—echoed in parts of Africa—that huge sums in development aid over the years have been for naught, stolen by corrupt officials or wasted on a mishmash of uncoordinated projects.

Fifty years after Kwame Nkrumah led Ghana to independence—inspiring a surge of African nations to break the shackles of colonial rule—foreign aid still accounts for half the national budget. The average Ghanaian's yearly income of about $400 is, adjusted for inflation, less than half what it was in 1947.

Still, generally Ghana is a country that works. It escaped the violent post-independence upheavals of many of its neighbors. There are regular, free and peaceful elections. Unemployment is low by African standards.

Two-thirds of Ghana's jobs are in farming, but farming here is far from easy. Take pineapple, which accounts for 20 percent of the country's farm income and, industry experts believe, could lift thousands out of poverty. The southeastern highlands north of Accra, blessed with abundant sunshine and perched close to the Atlantic Ocean, are ideal for growing the exotic fruit for export to the lucrative markets of Europe and to neighboring countries.

But as Anthony Botchway surveyed his 1,000-acre plantation one sweltering morning recently, the veteran farm executive rattled off a list of problems hindering the industry.

There's little automated irrigation, so smaller farms' success is tethered to rainfall. And even in big operations like Botchway's Bomarts Farms, harvesting and packing are still done by hand.

Once loaded into trucks, the fruit jostles and tumbles over bad roads, reaching the port behind schedule and often bruised. The port lacks adequate cool-storage facilities, leaving fruit to wither in the heat as it awaits shipment by sea.

Ideally, pineapple is shipped within 48 hours of being picked, Botchway said. It takes several times longer in Ghana, which is losing European market share to better funded farms in Latin America.

"But if you look at the way we go about our business now and the success we have had," Botchway said, "it tells you that with the right equipment and the right funding we should be able to compete with the best."

In their Millennium Challenge proposal, Ghanaian officials suggested wide-ranging improvements to help farmers in pineapple and other cash crops. They identified more than 700 miles of roads to be fixed to cut transport costs and time. They proposed training small farmers in business practices and making it easier for them to access credit.

And they came up with $101 million in projects to improve rural life: automating far-flung banks, fixing power lines and building schools and health facilities in underserved areas.

After five years, U.S. officials will measure the success of the project by its impact on farm income, crop prices, crop production and the state of the roads.

Ghanaians also will be watching to see whether this is indeed a different kind of foreign aid. Some financial journalists in Accra have formed a group called MCA Watch to report on how the money is spent.

Officials know they'll face heavy scrutiny both at home and in Washington.

"Whatever we proposed has to be completely done in five years," said Matthew Armah, who helped write the proposal. "We don't have room for failing."

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On the Web:

The Millennium Challenge Corp.: www.mcc.gov

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(c) 2007, McClatchy-Tribune Information Services.

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