Millennium Challenge Corporation (MCC) has formally terminated Malawi’s $350 million (K612.8 billion) Transport and Land Compact that the US Government agency earlier committed to finance road construction for key corridors to boost land productivity.
In a notice issued yesterday, Millennium Challenge Account (MCA)-Malawi II chief executive officer Dye Mawindo said the compact will stand terminated 30 days after November 19 2025.
Reads the notice in part: “In January 2025, the Government of the United States of America directed that all US Government funding for foreign projects be suspended pending review. At the end of the review period, MCC advised that the Compact for Malawi would be terminated 30 days from 19th November 2025.
“MCA Malawi II, through this public announcement, communicates to all contractors, suppliers and consultants that MCA Malawi II will not receive deliverables derived from contracts financed by MCC after 18th December 2025, being the Compact End Date, unless the specific contract stipulates a subsequent date. Any deliverable received after this date will be declared ineligible for the corresponding payment.”
Malawi and MCC signed the MCA–Malawi II Compact on September 28 2022 and it was scheduled to run for five years, investing in interventions that were expected to significantly improve transport networks, reduce business costs, strengthen land administration and enhance Malawi’s investment climate.
The first phase targeted upgrades to the Chileka-Likuni Road in Lilongwe and Chantulo- Mkutumula Roads in Mangochi and part of Ntcheu to help farmers reach markets.
The compact also planned to modernise revenue systems in the country’s four cities and upgrade over 280 kilometres (km) of roads by May 2029.
The targeted four roads have a combined length of 287km. They are Chileka through Malingunde to Likuni in Lilongwe covering 53km, Chamtulo-Mkutumula Road covering 79km, Euthini in Mzimba to Chikwawa in Rumphi covering 67km and Mkanda in Mchinji to Linga in Kasungu covering 88km.
In an interview yesterday, Minister of Transport and Public Works Feston Kaupa said government could have loved to see the projects continue.
However, he referred The Nation to the Ministry of Finance, Economic Planning and Decentralisation for a detailed response, but his Cabinet colleague Joseph Mwanamvekha was not available for comment.
Commenting on the matter, governance scholar at Malawi University of Business and Applied Sciences, Andrew Kaponya, said countries such as Malawi knew the US policy direction as President Donald Trump indicated during his campaign that there was donor fatigue on the US.
He said this should have served as a wakeup call for African countries including Malawi to stop relying much on donor funding.
In April this year, international news outlets such as Reuters, The New York Times and CNN reported that the MCC was on the verge of closure due to budget cuts.
Malawi qualified for the second compact towards the end of 2018 and MCC formalised the award with a signing ceremony in September 2022 that former president Lazarus Chakwera attended in Washington DC, USA.
