US gives final nod on $350m compact package
Malawi’s second compact under the Millennium Challenge Corporation (MCC) is now set to roll out after fulfillment of conditions required for “Entry Into Force”, it has emerged.
In a joint statement at the official launch of the $350 million (about K612 billion) Transport and Land Compact yesterday, Ministry of Finance and Economic Affairs and the Millennium Challenge Account (MCA)-Malawi II said the new deal is poised to benefit over five million Malawians.
The announcement of the “Entry Into Force” of the compact was made during the MCC’s 20th Anniversary celebrations held at the George W. Bush Presidential Center in Dallas on May 6 2024 in the presence of President Lazarus Chakwera and MCC chief executive officer Alice Albright.
Said Albright: “We are proud of our strong, enduring partnership with the people of Malawi, and believe this compact will play a crucial role in Malawi’s economic development. This compact is about more than multi-million US dollar grant funding for infrastructure, or land policy reforms—it is a testament to our joint investment in the people of Malawi.”
In his remarks, President Chakwera—who is also in Texas for the US-Africa Business Summit—underscored the significance of the compact in advancing Malawi’s economic prosperity and fostering accountable governance for all citizens.
“This compact exemplifies Malawi’s steadfast commitment to building a more resilient and self-reliant nation,” he said.
Malawi formalised the signing of the second compact in 2022, but there were still benchmarks it had to meet to operationalise the deal.
Yesterday, Minister of Finance and Economic Affairs Simplex Chithyola Banda said the new MCC Malawi Transport and Land Compact comprises three projects.
The first is the road infrastructure to the tune of $244 million to help reduce travel time and costs for smallholder farmers through the improvement of targeted roads in selected transport “corridors.”
The plan, said Chithyola Banda, is to construct four corridor roads linked to agriculture hubs.
The second is the land project with a $44 million injection to improve land administration services in Malawi while the third is the American Catalyst Facility for Development Project that will invest $8.5 million to support the private sector in undertaking feasibility and other studies prior to the grant recipient organisations investing in their chosen projects.
To commemorate the official launch of the second compact, MCA Malawi II will host a symbolic launch and celebration on May 30 2024, in Lilongwe, which Chakwera and Albright are expected to attend.
MCC is a US government agency created by the US Congress in January 2004 to partner with the world’s poorest countries that are committed to just and democratic governance, economic freedom and investing in their populations.
It is delivered through compacts—large, five-year grants for selected countries that meet MCC’s eligibility criteria.
Malawi was one of the first beneficiaries with a Threshold Country Programme, which helped the country to beef up its oversight institutions, leading to Malawi qualifying for its first compact which was implemented from 2013 to 2018 to upgrade the nation’s power infrastructure and bring in reforms that would help bring efficiency into the sector. The completion of Malawi’s first MCC compact in the energy sector supported the expansion of the national power grid.
Building upon this infrastructure, Lilongwe has embarked on an Interconnector Project with Mozambique, which could allow Malawi to buy and sell electricity with its southern African neighbours.
