Innovation and Results: An interview with MCC’s Daniel Yohannes

CEO in Lesotho: CEO Daniel W. Yohannes talks with workers at a dam in Lesotho during a visit in 2013.

What does it take to run the Millennium Challenge Corporation (MCC), one of the most effective global poverty-fighting organizations in the world?

I had a chance to sit down with MCC CEO Daniel Yohannes earlier this month, just on the heels of their 10-year anniversary, to find the answer to this question. True to their No. 1 ranking in Publish What You Fund’s 2013 Aid Transparency Index, it’s not exactly a secret. The US agency that treats foreign assistance like a business is fueled by data-driven results, giving countries ownership over their own solutions and implementation. It’s exactly why ONE has been supporting MCC since we started.

What is lesser known is the incredible discipline that Mr. Yohannes, a banker by training, brings to the MCC. Mr. Yohannes’ vision of success is just straight-up good business practice: to get the most global poverty-fighting bang for our US taxpayer buck. The proof is in the results and the number of lives transformed: 2,677 miles of electricity lines competed, 247,683 farmers trained, 715 schools built or rehabilitated.

Read on to find out Mr. Yohannes’ thoughts on President Obama’s Power Africa Initiative, MCC’s unique model, and his most memorable moments during his time at the MCC.

Burkina Bright Students: Yanta Fatimata (2nd from right) studies with friends in the courtyard of College Saint Marie de Tounouma, the secondary school where they attend in Bobo-Dioulasso, Burkina Faso. Fatimata, a BRIGHT School graduate, was the first girl from her family to attend school.  Credit: Jake Lyell for MCC.

Malaka Gharib: How has MCC helped redefine the US’ relationship with other countries, particularly in Africa?

Daniel Yohannes: I think that the model which was created 10 years ago is not about patronage, but partnership. It’s not telling our partners in Africa what’s good for them, but them using the evidence in the decision-making process and creating the right environment for monetary evaluations. It’s about holding them accountable for results.

The creation of MCC and the work we do has really changed the conversations around the world and in Africa about development. It’s not a donor telling the recipient what to do, it’s about our partners making the decisions for themselves and running their own operation.  

MG: What are the results you’ve seen during your time at the MCC?

DY: Every country has a different result. The fact of the matter is that in the last four years, we were able to have 14 countries complete their investment projects, and in having spent 30 years in the banking industry, having financed many infrastructure projects, I can tell you that some of these projects were not simple – they were very complex.

Many of these countries got them done and they got them done by themselves, and we only had two people on the ground, mostly everything is done by locals. This is done to build capacity – so whether it’s the Port Expansion Project which was completed in Benin, to major projects in Tanzania, Honduras—national authorities taking ownership was key. That’s why they’re called country ownership models.

You really learn that the system is working when you go overseas and speak to people who have benefited from our investments. For example when I went to Ghana, I remember speaking to this woman from Accra. She told me that from 2 to 3 acres, she used to get 10 bags of rice. And after she received training, she was able to increase to about 50 bags from the same. She came to see me and said ‘I just want to make sure I shake your hand and tell you what we’ve done.’

Or the female farmers that I met in Honduras. I met 15 to 20 women farmers, and many of these women had never plowed a field in their life until they received this training. But now they are growing herbs, vegetables and selling to Wal-mart and other American companies. Now, each of them gets anywhere from $2,000 to $5,000 per year by selling vegetables and herbs. To me that is a success story.

The results have been phenomenal. The model works; we’re getting the best results from American taxpayers who have entrusted us with their tax dollars. We are making a difference. We are creating  a business friendly environment for the private sector, which is so important in the long run. 

Connecting Africa to Power: Worker Yahaya Juma helps to construct a new electrical sub-station in Zanzibar, Tanzania.  The Millennium Challenge Corporation is increasing electrical infrastructure on the Zanzibar Archipelago by bringing a new submarine cable from mainland Tanzania, constructing new electrical sub-stations, and installing new power lines. Credit: Jake Lyell for MCC.

MG: Power Africa is huge for ONE members right now. Can you tell us about some of the African energy projects from MCC?

DY: The beauty is Africa is blessed with water, sun and wind. But if Africa is going to compete globally, they need to have power. Without power it will extremely difficult. There are a number of companies that want to open up plants, but it’s simply too expensive when they have to rely on diesel and oil for production.

MCC has invested close to $600 million so far. In fact, I was in Tanzania to celebrate the installation of the cable that we financed that went from mainland Tanzania to Zanzibar. I was both in Zanzibar both before and after and I’ve seen what happened before. A lot of small businesses were not able run their businesses for lack of electricity. In fact, there was a period of about 90 days where everything was shut down. Hotels were not able to compete because they had no electricity and or had to use generators, which is extremely expensive.

We were greeted by 15,000 people in Zanzibar when we went to dedicate the new installation. Those people I’ve talked to, they have access to electricity. More companies are building hotels in that island. The people are making more money because they don’t have to worry about not having electricity. It’s been a great transformation.

MG: What message do you have for ONE members?

DY: Development, if done correctly, works. Development is in the US interest, it is about our prosperity, it’s about our security and it’s about creating the next frontier markets.

We’re so grateful to Mr. Yohannes for speaking to us before he starts his new role as US Ambassador to the OECD. Big thank you to Mr. Yohannes and his staff at the MCC for coordinating this interview.