About Mcc Agreement

Even after the signing of the agreement, Sri Lanka still has the option of amending the agreement, provided that these amendments do not exceed the funding allowance allocated or extend the grant period by five years. The agreement has been at the centre of heated debates and political conflicts in recent months: the president has refused to approve the agreement before the end of his term, a petition of fundamental rights (FR) against the signing of the agreement, which will be filed before the Supreme Court, and even an almost orchestrated protest earlier this week. The GCC pact does not say it must be ratified by Nepal`s parliament. However, the text of the agreement stipulates that in the event of a conflict requiring parliamentary ratification, the provisions of the pact will prevail over the laws of Nepal under the Treaty Act of Nepal. The GCC is the first grant agreement that requires Parliament`s approval. However, it is also the largest grant agreement ever signed by Nepal. The Indo-Pacific Strategic Report, released in June last year, indicates that the strategy provides for the overall links between security, governance and the economy. While not the MCC is, another report, released two months ago, makes it clear that aid under the pact is part of the IPS. According to an expert who worked for the Millennium Challenge Account, the Nepalese office of the MCC, Nepal should consider the MCC as an economic part of the IPS. Ratification of the MCC does not necessarily mean being part of a “military alliance.” Economists suggest that Nepal accept all economic support and that there be no damage to the country if it supports the MCC. Even China`s ambassador to Nepal, Hou Yanqi, said Beijing welcomed any international assistance to Nepal in terms of economic cooperation.

In April 2018, the agoa and MCA modernization laws gave MCC the power to enter into parallel pacts to promote cross-border economic integration, trade and cooperation. In December 2018, the MCC`s Board of Directors selected five West African countries for parallel pacts: Benin, Burkina Faso, Côte d`Ivoire, Ghana and Niger. In response to the Ghanaian government`s decision to terminate the concession agreement between Electric Company of Ghana Ltd (ECG) to private operator Power Distribution Services Ghana Ltd (PDS), the MCC Board of Directors did not select Ghana for regional investments in 2019. But since then, the agreement has been frozen. Since the organization traditionally only funds low- and low-middle-income countries, Sri Lanka`s recent middle-income status has jeopardized the eligibility of the MCC grant, unless the agreement is signed before 2020, as the country is not on the organization`s 2020 scorecard. Late last month, Sri Lanka`s Cabinet of Ministers approved, in a major step forward, the implementation of the $480 million Millennium Challenge Corporation (MCC) grant and published the final draft grant agreement to the public for review. The document makes it clear that the Sri Lankan government is “the primary responsibility for monitoring and managing implementation” of projects, and legal advice signed by the Sri Lankan GA must be sought before the agreement enters into force.