US engages Malawi on new MCC compact


By Chimwemwe Mangazi:

A delegation from the Millennium Challenge Corporation (MCC), a United States (US) government agency, is in the country to hold talks with Capital Hill on a new compact for Malawi.

This follows expiry of the first five-year $350 million (about K257 billion) energy sector compact on September 20 2018.


In December last year, MCC approved that Malawi negotiates for a second compact after the successful completion of the $350.7 million energy project.

Malawi remains eligible for the second compact because it has the lowest per capita income as per the assessment of the World Bank.

An MCC team, led by vice president, Jeanne Hauch, arrived in the country on Wednesday for a three-day mission to deliberate Malawi government’s options for the next compact.


Hauch told journalists in Lilongwe yesterday that the new compact would take at least two to three years to develop before the US government channel is the first chunk of the grant funds to the country.

“I will begin discussions on the next phase of our work together, which is to develop a new compact to reduce poverty, spur economic growth, and invest in the potential of Malawi’s people, businesses and economy.

“The government together with our economists will conduct an economic analysis which will determine the most significant factors constraining growth in Malawi,” Hauch said.

At the conclusion of the compact development process, Malawi will estimate the cost of project interventions and the team will propose an overall compact.

Hauch said MCC was impressed with the Malawi government’s continued commitment to strengthening democratic institutions, maintaining sound economic policies and investing in people.

The maiden $350 million compact focused on infrastructure development in the energy sector, which saw upgrades in hydro power stations, substation and establishment of modern power lines.

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