MCA Cannot Be Used to Produce Cotton And Rice

The chips on the MCA are down, and it is now time to face the realities of implementing the programme. And one of the realities is that the money cannot be used to produce any goods that would compete with American goods or cause job losses to American citizens.

Section 2.3 of the MCA agreement titled "Limitations on the use of Mellennium Challenge Coperation (MCC) Funding" categorically states that, "The Government shall ensure that MCC Funding shall not be used to undertake, fund or otherwise support any activity that is likely to cause a substantial loss of United States jobs or a substantial displacement of United States production.

What readily comes to mind are cotton and rice, two of America's biggest commodities on which it subsidizes its farmers to the tune of $300 billion per annum. America's unwillingness to reduce subsidies to its farmers is largely to blame for the recent failure of the WTO to reach a consensus.

America's insistence that the funds cannot be used to produce goods that would create job losses in America and compete with its own products perhaps, explains why the Upper East and West and some parts of the Northern Region have been excluded from the MCA.

The reason is that, the main cash crop for the upper regions is cotton, while rice is cultivated in some parts of the Northern Region. These commodities are the only economic link between the north and south. So developing them would have further integrated the north and south economically.

Curiously, the government has been ordered to ensure that the "any Program Assets, MCC Funding and Accrued Interest shall be free from any taxes imposed under the laws currently or hereafter in effect in Ghana during the Compact Term."

This exemption shall apply to any use of any Program Asset, MCC Funding and Accrued Interest, including any Exempt Uses, and to any work performed under or activities undertaken in furtherance of this Compact by any person or entity (including contractors and grantees) funded by MCC Funding, and shall apply to all taxes, tariffs, duties, and other levies (each a "Tax" and collectively, "Taxes").

In addition, American citizens or other foreigners working on the programme who are paid directly from the MCC Funds are not to be charged income taxes and other taxes on profit or businesses imposed on organizations or entities, other than nationals of Ghana, receiving MCC Funding, including taxes on the acquisition, ownership, rental, disposition or other use of real or personal property, taxes on investment or deposit requirements and currency controls in Ghana, or any other tax, duty, charge or fee of whatever nature, except fees for specific services rendered; for purposes of this Section 2.3(e), the term "national" refers to organizations established under the laws currently or hereafter in effect in Ghana, other than MiDA or any other entity established solely for purposes of managing or overseeing the implementation of the Program.

Customs duties, tariffs, import and export taxes, or other levies on the importation, use and re-exportation of goods, services, or the personal belongings and effects, including personally-owned automobiles, for Program use or the personal use of individuals who are neither citizens nor permanent residents of Ghana are not to attract taxes.

In addition, taxes on the income or personal property of all individuals who are neither citizens nor permanent residents of Ghana, including income and social security taxes of all types and all taxes on the personal property owned by such individuals, to the extent such income or property are attributable to MCC Funding are exempt from tax.

The agreement also emphasizes that, the MCC cannot be used in;

(i) Providing financial incentives to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;

(ii) Supporting investment promotion missions or other travel to the United States with the intention of inducing United States firms to relocate a substantial number of United States jobs or a substantial amount of production outside the United States;

(iii) Conducting feasibility studies, research services, studies, travel to or from the United States, or providing insurance or technical and management assistance, with the intention of inducing United States firms to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;

(iv) Advertising in the United States to encourage United States firms to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;

(v) Training workers for firms that intend to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States;

(vi) Supporting a United States office of an organization that offers incentives for United States firms to relocate a substantial number of United States jobs or cause a substantial displacement of production outside the United States; or

(vii) Providing general budget support for an organization that engages in any activity prohibited above.

Besides, the funds cannot be used for Military Assistance and Training. The Government shall ensure that MCC Funding shall not be used to undertake, fund or otherwise support the purchase or use of goods or services for military purposes, including military training, or to provide any assistance to the military, police, militia, National Guard or other quasi-military organization or unit.