Malawi’s highly-anticipated $350 million Millennium Challenge Corporation (MCC) second compact has encountered a setback, with the project timeline pushed from early 2022 to early 2024.
Malawi News has learned that the project’s rollout, initially expected last year, has been hindered by the non-fulfillment of various Conditions Precedent (CPs) required for the compact’s implementation.
Secretary to the Treasury, Mafuta Mwale, said both the MCC and the Government of Malawi have been “diligently working” on fulfilling the conditions to pave the way for the compact’s execution.
“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 activities,” Mwale said.
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He further highlighted the establishment of the Millennium Challenge Account (MCA) Malawi II as another critical aspect of the project’s implementation.
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However, challenges in procuring a firm for handling recruitments delayed progress.
Nonetheless, Mwale assured that the government, in collaboration with the Treasury, has procured a Human Resources firm to take charge of the recruitment process.
Despite the delay, Malawi has taken steps to expedite certain aspects of the project.
The Ministry of Transport and Public Works has partnered with consulting engineering firms to prepare detailed road designs, crucial for the tendering of road construction works, scheduled to begin around November 2023.
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The goal is to evaluate bids and procure works contractors immediately after the formal entry into force in January 2024.
Contractors are expected to mobilise and commence work around June 2024.
To streamline the process, the construction of the four corridors will be divided into seven lots, enabling multiple contractors to work simultaneously on different fronts.
Millennium Development Trust (MMD) Chief Executive Officer, Dye Mawindo, told Malawi News that he would comment on the matter at “an appropriate time”.
The signing of the Malawi Transport and Land Compact, a $350 million infrastructure grant between the US government’s MCC and the Government of Malawi, took place with the participation of US Secretary of State Antony Blinken and President Lazarus Chakwera.
MCC Chief Executive Officer, Alice Albright, and Malawi Minister of Finance and Economic Affairs, Sosten Gwengwe, are signatories for the compact.
MCC’s grant programs in Malawi are expected to benefit more than 12 million people, with a focus on key sectors such as transportation, power and agriculture.
These 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.
Malawi’s economy has faced significant challenges due to global climate change, Covid-19, and the Ukraine- Russia conflict.
However, through a joint analysis of the economy, MCC and the government identified high transport costs as a key economic barrier between farms and markets as well as difficulties with access to land for investment due to uncertain land rights.
In the first compact, MCC supported Malawi in improving the energy sector which saw rehabilitation of Nkula Power Station, among other activities.
