Developments in the United States of America (USA) point to a shutdown of the Millennium Challenge Corporation (MCC), a situation that threatens the $350 million (K612.8 billion) Transport and Land Compact in Malawi.
Malawi’s second five-year compact, which started on May 6 2024, aims to boost farming productivity, fix roads to cut transport costs for farmers and attract private investments in agriculture.
International news outlets such as Reuters, The New York Times and CNN yesterday reported that the MCC, a US Government agency funding development projects in poorer nations, may close due to budget cuts.
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Reuters, citing a staff meeting and an e-mail communication, reported that MCC staff were told in a meeting on Wednesday that all of the agency’s programmes would be closed and that staff numbers would be minimised.
“Foreign aid is not a priority for the administration and so MCC’s work needs to wind down,” Reuters quoted MCC senior official Kyeh Kim as having told staff.
Reuters further reported that
Kim told the staff that officials from Department of Government Efficiency headed by multi-billionaire Elon Musk visited MCC early last week and entered in talks with the leadership, who were attempting to save the agency.
When asked if MCC-funded projects in Malawi would face immediate termination if the shutdown proceeds, US Embassy strategic communications specialist Marcus Muhariwa said he would respond when the response is ready.
However, he had not replied by the time we went to press at 9pm.
On the other hand, Ministry of Finance and Economic Affairs spokesperson Williams Banda said in a brief WhatsApp response that he needed more time to review the matter.
In a separate interview yesterday, Millennium Challenge Account (MCA) Malawi II communications director Madalitso Mbendera said the office was still waiting for the official direction from MCC on what the development means for Malawi.
“Once we have more clarity, we will share updates. For now, our 2024 Annual Recap on the official website shows progress since May 6,” she said.
The recap shows that MCA Malawi II began road construction under the Accelerated Growth Corridors Project in September 2024.
The first phase targets 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 plans to modernise revenue systems in the country’s four cities and upgrade over 280 kilometres of roads by May 2029.
The targeted four roads have a combined length of 287 kilometres (km). 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 the 88km Mchinji to Linga in Kasungu.
At least $244 million is budgeted for the roads while $44 million is for the land project and another $8.5 million will go towards a project called American Catalyst Facility for Development
In an earlier interview, MCA-Malawi II chief executive officer Dye Mawindo said he was confident that they will complete the construction of four roads at a combined length of 280km in three years, which will be way ahead of the five-year compact period.
Reacting to news of the potential shutdown of MCC, Farmers Union of Malawi president Mannes Nkhata said it would be a blow to the country’s agriculture sector and development of transport infrastructure in general.
She said: “If the project rea l ly get s terminated, ultimate losers will be rural poor farmers, including women and those living with various disabilities who had all their hopes on this project as a gateway to access reliable input markets and profitable output markets.”
Malawi qualified for the second compact towards the end of 2018 and MCC formalised the award with a signing ceremony in September 2022 that President Lazarus Chakwera attended in Washington DC, United States of America
