The United States government’s Millennium Challenge Corporation (MCC) has shifted the official launch of Malawi’s second compact by three months, to April.
Initially the $350 million compact, which is focusing on transport and land infrastructure, was scheduled to be launched this month.
But a statement from the US Embassy on Friday said after careful consideration, MCC recommended a three-month shift of the official launch of the second compact to April 2024.
According to the statement, shifting the start of the five-year term will not interrupt project work on the ground, and all activities will proceed as planned.
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“Moving the official launch date will simply start the official five-year compact timeline three months later than initially planned to provide sufficient time in the project timeline for our anticipated activities.
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“We commend the Government of Malawi for its diligent work preparing for the official compact launch and meeting all mandatory requirements. MCC is excited to continue the work to implement the compact and ensure it benefits the people of Malawi,” the statement says.
Malawi and the US signed the contract in Washington DC on September 28 2022.
The signing of the compact by former Finance minister Sosten Gwengwe and MCC Chief Executive Officer Alice Albright in the presence of US Secretary of State Anthony Blinken and Malawi President Lazarus Chakwera came four years after Malawi qualified for assistance in 2018.
The compact seeks to address the high price of road freight transport service and barriers to linking farms to markets in rural areas.
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The compact is also designed to address difficulties in access to land for investment due to mismanagement of the estate sector and ambiguity on property and land rights, particularly for women smallholder farmers.
The compact will include three key projects namely the Accelerated Growth Corridors Project; the Increased Land Productivity Project; and the American Catalyst Facility for Development Project.
The Accelerated Growth Corridors Project is designed to address the root causes of the binding constraint of high price of road freight transport service and barriers to linking farms to markets in rural areas—specifically, poor rural infrastructure and policy, institutional, and regulatory issues affecting the transport sector.
Reductions in travel time and vehicle operating costs due to improved road conditions and more efficient routes that feed into a broader transport network in Malawi are expected to reduce costs and spur additional (generated) traffic along the investment corridors.
In addition, ensuring women’s safety in transport and agricultural marketing are assumed to complement and sustain the benefits of the physical road works.
Speaking during the signing ceremony, Blinken said upgrading major roads will make urban markets more accessible to rural people and allow them travel more quickly and cheaply and allow them to bring their produce more swiftly to the market.
“Secondly, improving government administration will help Malawi make the most of one of its core resources and that’s land. Helping strengthen record keeping, for example, will make it easier for families and marginalised people to prove that they own the land and help protect themselves from exploitation.
“For companies, these records will mean that they can invest with confidence. They can grow their businesses. They can create more jobs for Malawian citizens,” he said.
Blinken said what is critical is the way the MCC identifies the areas of support in compacts, noting that it does that in consultation with countries.
He said like all MCC endeavours, the projects under the second compact will be transparent, collaborative and built to meet the highest standards of quality.
“They provide grants to Malawi not debt,” Blinken said.
