Malawi chances for MCC compact rise

 

Malawi’s chances of qualifying for the next compact of the United States of America’s Millennium Challenge Corporation (MCC) have gone up following improved scores on a scorecard, including controlling corruption.

The controlling corruption indicator is one of the critical assessment tools for sustenance of the project and examines whether the country is making efforts to fight corruption, levels of prosecution and investigations.

Malawi is currently benefitting from a five-year $350.7 million compact with MCC to increase access to electricity and improve transmission infrastructure which will be completed in 2018.

One of the projects under MCC is on increased access to electricity

The MCC scorecard is a benchmark comprising 20 indicators which the board uses as one consideration for selecting new beneficiaries of compacts.

Out of 20 indicators, Malawi has failed in five, four of which are on them fiscal policy, inflation, regulatory quality, gender in the economy and business start-up under the category of economic freedom.

A statement from the US Embassy in Malawi released yesterday states that Malawi continued to pass MCC’s scorecard by meeting the requirement of passing at least half of the 20 indicators overall, including the hard hurdles of control of corruption and democratic rights.

Last year, Malawi scored was in danger of going below the 50 percent mark on control of corruption which would make it ineligible for another compact.

In the 2017 scorecard, Malawi has scored 57 percent, seven percentage points below 2015 score under the ruling justly indicator, where controlling corruption falls under.

The 2018 scorecard indicates a score of 59 percent, perhaps owing to increased prosecution of Cashgate cases by the Director of Public Prosecutions and Anti-Corruption Bureau.

However, the US government has cautioned that sustainability of the MCC investments would require government commitment to achieving power sector reform goals, including on electricity tariff and environment that allows independent power producers to enter the market.

“While Malawi’s MCC compact remains largely on track to complete all major works prior to compact completion in September 2018, the sustainability of MCC investments will require the continued commitment of the Government of Malawi and project partners,” the statement reads.

On business start-up, Malawi has gone down on how many days it takes to register a business, access to land for investment as well as provision of tax breaks, from 27 percent in 2017 to 26 percent in 2018.

Malawi has also maintained the low score of 50 percent on removing barriers to equitable participation of women in the economy and has scored 45 percent on the quality of regulation that promotes private sector development.

But the scores remain high on trade policy, land rights and access to credit under the category of economic freedom.

In the area of investing in people, Malawi has scored high on health expenditures, primary education expenditures, child health and girls primary education completion rate.

However, a low score of 49 percent on immunisation rates has been registered in the 2018 scorecard. n

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