10 January 2018

Malawi: U.S. Rebuffs Malawi On Second Compact of Millennium Challenge Corporation

The United State's Millennium Challenge Corporation (MCC) has decided to not re-select Malawi for another compact program support despite with following some poor scores on a scorecard, including controlling corruption.

The controlling corruption indicator is one of the critical assessment tools for sustenance of the project and examines whether the country is making efforts to fight corruption, levels of prosecution and investigations.

The Millennium Challenge Corporation is a bilateral United States foreign aid agency established by the U.S. Congress in 2004, applying a new philosophy toward foreign aid.

And currently Malawi is implementing a $350.7 million compact which it signed in 2011 to revitalize the country's power sector. This compact will end in September 2018.

Malawi is missing on the list of countries that have been reselected for support, thus according to published online statement from the MCC office in Washington following a board meeting which its directors held in December, 2017.

The MCC had a pool of about 74 countries which are lower to middle income which it enlisted for candidacy in the 2018 financial year.

Malawi which is completing its energy pact from 2012, this year was among the candidates for reselection.

However according to a results report from the MCC Board they reselected Burkina Faso, Mongolia, Senegal, Sri Lanka, and Tunisia, enabling the development of compacts in those countries to continue.

Two new countries have been selected for the first time namely the Gambia and Timor Leste.

This means that Malawi will now have to work on campaigning to get a new compact to develop another sector other than energy.

In the 2016, Malawi score was in danger of going below the 50 percent mark on control of corruption.

In the 2017 scorecard, Malawi scored 57 percent, seven percentage points below 2015 score under the ruling justly indicator, where controlling corruption falls under.

The 2018 scorecard indicates a score of 59 percent, perhaps owing to increased prosecution of Cashgate cases by the Director of Public Prosecutions and Anti-Corruption Bureau.

However, the US government cautioned that sustainability of the MCC investments would require government commitment to achieving power sector reform goals, including on electricity tariff and environment that allows independent power producers to enter the market.

Meanwhile, the Malawi Government and the MCC office in the country are yet to comment on the matter.

It is an independent agency separate from the State Department and USAID.


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