The United States (US’) Millennium Challenge Corporation (MCC) has said the Malawi government has completed most of the requirements for commencement of projects under the second $350 million compact.
The compact will see the US government investing $350 million to reduce transport costs, and strengthen land administration in Malawi.
In a response to an emailed questionnaire, MCC Deputy Resident Country Director Khalia Mounsey said steady progress has been recorded towards commencement of the project.
She said MCC is pleased with the progress made to date with the Government of Malawi (GoM) and the Malawi Millennium Development (MMD) Trust, saying the compact is on track to enter into force as planned in January 2024.
“The Government of Malawi has completed many of the requirements for entry into force including legislative changes and project preparations and they committed to complete the rest to stay on track”, Mounsey said.
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She said consultants designing roads and planning resettlement have started work, and that stakeholders and communities are engaged, and Millennium Challenge Account (MCA) – Malawi II recruitment is underway.
Secretary to the Treasury Mcdonald Mafuta Mwale has said both the MCC and the government have been diligently working on fulfilling the Conditions Precedent (CPs) required for the compact’s implementation.
“The good news is that all the legislative CPs have been successfully achieved. This includes the enactment of vital laws, such as the Public Roads Act and the Fertiliser Act, which are essential for the proper functioning of the compact’s initiatives,” Mwale said.
The signing of the Malawi Transport and Land Compact, a $350 million infrastructure grant between the US government’s MCC and the Malawi Government, took place with the participation of US Secretary of State Antony Blinken and President of Malawi Lazarus Chakwera, along with almost 100 leaders from other nations.
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MCC Chief Executive Officer Alice Albright and Malawi Minister of Finance and Economic Affairs Sosten Gwengwe served as signatories for the compact.
MCC’s grant programmes in Malawi are expected to benefit more than half of the country’s population while focusing on key sectors such as transportation, power and agriculture.
The investments, along with key policy and institutional reforms in the land sector, aim to facilitate additional private-sector investments and directly benefit Malawi’s greatest resource—arable land.
The project was signed on September 28 2022.
Malawi completed a $350.7 million energy-focused compact in September 2018, meeting compact targets and moving the energy sector closer to long-term sustainability. In December 2018, MCC’s Board of Directors selected Malawi as eligible to develop a subsequent compact in recognition of Malawi’s strong scorecard performance, robust partnership with MCC and success in completing its first compact.
MCC and the Government of Malawi identified the country’s key constraints to economic growth, which drive the focus of the $350 million compact in addressing the high price of road freight transport service and access to land for investment.
