US agency outlines conditions for Malawi over new MCC compact

The chief executive officer of Millennium Challenge Corporation (MCC), a United States of America government agency,  Sean Cairncross, has  said Malawi was selected for the second compact after the successful completion of the $350.7 million energy project as a result of governments continued commitment to strengthening democratic institutions, maintaining sound economic policies and investing in its people.

But the MCC boss  said there are conditions for Malawi to boost chances to qualify for the award of a second compact  grant prominent amomg them the continued commitment to strengthen democratic institutions, good governance and sustating investment in the first MCC compact.

“For Malawi to be selected, it has showb tremendous progress on our indicators which measure governance, economic stability and investment in the government for its people. So, we expect those indicators to continue,” he said.

Cairncross said the selection demonstrates the faith that our Board of Directors and USA has on Malawi “and the hard work the country is doing and we expect that progress to continue for the second compact to be a success.”

He added: “We want to develop a compact that addresses the needs of Malawi’s people and seizes the opportunities to spur private sector led economic growth.”

In his remarks during the meeting with MCC delegation at Sanjika Palace in Blantyre, President Peter Mutharika said his administration will do its best to qulify for the new compact.

“We are aware that there is a demanding process that we need to go through and we will go all the way.

“We will work with MCC in the process of developing constraints analysis report so that we determine the actual factors that remain to constrain our economic growth,” said Mutharika.

Mutharika added that he is aware that the country needs more work on improving the country’s macroeconomic environment with a strong imprint of private sector participation and difficulties with access to land for investments that affect participation of rural smallholder citizens particularly women.

“Further, we are aware that we have to work on reducing the cost of production such as high prices that result from the cost of poor rural roads and road freight transport services.

“Let me emphasize that we will improve lives of many Malawians the moment we bring down the cost of production in the country.

“Our goal is not just economic growth but inclusive economic growth where rural people participate and benefit in our economic growth,” he added.

The Malawi leader further said that the reduction of production cost will boost production, allow rural Malawians to participate more in the production, create more jobs and more products.

“This is the turning point for Malawi to stop being a consuming and importing nation to becoming a producing and exporting nation. This is Malawi:’s vision,” said Mutharika.

Malawi signed the first compact with MCC in 2011 before it was suspended due to poor governance in 2012. It was resuscitated later in 2013.

In the 2019 scorecard, Malawi scored 65 percent on controlling corruption from 59 percent last year in 2018, owing to increased prosecution of Cashgate cases and commitment by the government on legal reforms in the Anti-Corruption Bureau.

Unlike 2018 when Malawi failed five out of 20 indicators, in the 2019 scorecard was an improvement but it fared badly on the indicator on encouraging economic freedom in the areas of business start-up, fiscal policy.

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