After nearly a decade on the margins of Millennium Challenge Corporation (MCC) compact eligibility, Liberia is once again positioning itself for a major development breakthrough. A high-level MCC delegation arrived in Monrovia on Thursday to advance discussions on Liberia's second compact, marking a critical step in a process that has been years in the making and fraught with setbacks, reforms, and renewed diplomatic engagement.
The visit follows the MCC Board's December 2025 decision to reaffirm Liberia's eligibility for a second compact--an outcome Finance and Development Planning Minister Augustine Kpehe Ngafuan described as "a truly good Christmas for our people," reflecting both the political significance and public expectations surrounding the process.
"This reaffirmation did not come easily," Ngafuan said while welcoming the delegation. "It was the product of sustained engagement, tough reforms, and a clear demonstration that Liberia is once again committed to the core principles that underpin MCC partnerships."
Liberia's path to a second compact has been unusually long. It has been a decade-long detour from compact eligibility. The country successfully completed its first MCC compact in 2021 but hopes of swiftly transitioning to a second agreement were derailed by governance and policy challenges that affected performance on key MCC scorecard indicators. These included concerns around control of corruption, fiscal management, public sector effectiveness, and broader institutional capacity--areas that MCC places at the center of its eligibility criteria.
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Unlike many development programs, MCC compacts are highly selective and performance based. Countries must pass a majority of indicators measuring democratic governance, economic freedom, and investment in people. Liberia's struggles in these areas in the years following its first compact meant that, for nearly ten years, it remained unable to secure a follow-on agreement despite repeated expressions of interest.
Compounding these challenges were economic shocks, including the Ebola crisis, the COVID-19 pandemic, and persistent infrastructure deficits, which strained public institutions and limited reform momentum. Political transitions and policy inconsistencies also weakened Liberia's standing on critical indicators, making compact eligibility elusive.
Making the Case for a Second Compact
Momentum began to shift over the past two years as the government intensified engagement with MCC and recommitted to reform. Minister Ngafuan recalled a series of technical missions and high-level consultations that helped rebuild confidence.
"Earlier missions, including the growth analysis in September and subsequent follow-ups in Washington, D.C., were instrumental," he said. "They helped to re-establish trust and demonstrate Liberia's seriousness, ultimately leading to the Board's reaffirmation."
With eligibility now reaffirmed, Ngafuan cautioned that the most demanding phase lies ahead. "This is not the end; it's the start of a process that will require effort, hard work, and a whole-of-government approach to achieving outcomes," he said.
As part of that effort, the government plans to fast-track the recruitment of leadership and technical staff for a new MCC office in Liberia, ensuring that institutional arrangements are in place ahead of a critical "root cause analysis" workshop scheduled for February.
The visiting delegation is led by Ms. Carrie Monahan, Managing Director for Africa at MCC, who underscored that Liberia's first compact performance played a decisive role in the Board's decision.
"We are extremely proud of the success of the first compact and the deep U.S.-Liberia partnership," Monahan said. "That track record mattered."
She noted that MCC's compact development process is deliberately rigorous. "Our work is grounded in data and broad consultations with government, civil society, and the private sector to identify the binding constraints to economic growth," she explained. The February root cause analysis workshop, she said, will be a pivotal moment in determining which sectors offer the greatest potential for transformative investment.
Liberia's first MCC compact, valued at approximately US$257 million, focused heavily on energy and infrastructure--particularly the rehabilitation of the Mount Coffee Hydropower Plant. Completed in 2018, the project restored more than 80 megawatts of generation capacity, significantly reducing electricity costs, improving reliability, and laying a foundation for private sector growth.
The compact also supported road maintenance and institutional reforms, delivering tangible benefits that remain visible today. Access to cheaper and more reliable power has been widely credited with strengthening business confidence and easing a long-standing constraint on growth.
That legacy now serves as both an asset and a benchmark. "The success of the first compact raised expectations," a senior government official noted. "It also set a high bar for what Liberia must demonstrate in governance and implementation capacity."
Why the Current Visit Matters
The MCC team's presence in Monrovia signals that Liberia has moved beyond the eligibility debate into the substantive design phase. Stakeholder engagements during the visit are expected to shape priorities and influence how the compact is structured, including sector focus and reform commitments.
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U.S. Embassy Chargé d'Affaires Joseph E. Zadrozny emphasized the broader significance of the engagement. "This partnership is about long-term growth, job creation, and strong institutions," he said, extending New Year greetings and reaffirming Washington's commitment to Liberia's development trajectory.
Despite renewed optimism, challenges remain. Liberia must sustain reform momentum, protect gains in governance indicators, and demonstrate the political will needed to implement complex, multi-year projects. MCC's model leaves little room for slippage.
Still, the current moment marks a turning point. After years in the wilderness of compact ineligibility, Liberia is once again at the table--armed with lessons from the past and the prospect of a second transformative investment.
If successful, the second compact could play a defining role in addressing long-standing growth constraints and accelerating Liberia's economic recovery. As Minister Ngafuan put it, "The opportunity is before us. What matters now is how we seize it."
