Faith Nyasuguta
Malawi’s $350 million Transport and Land Compact has officially collapsed following the shutdown of the Millennium Challenge Corporation (MCC), the U.S. foreign aid agency that was financing critical road projects across the country.
The MCC is currently winding down its operations globally after a federal directive from the Trump administration, aimed at reducing federal spending on foreign development programs. The directive cited concerns over the use of American taxpayer funds abroad. As a result, only a few MCC projects worldwide will continue to completion.
In Malawi’s capital Lilongwe, the U.S. Embassy confirmed the development through Public Affairs Officer Grant Phillip, who explained in an emailed statement that the shutdown stemmed from a broad federal spending cutback. Malawi’s Minister of Transport, Jacob Hara, expressed frustration, revealing that the government was blindsided by the decision.
“The shutdown has affected the current funding as the MCC has communicated to us that they have now canceled the contracts. We didn’t know about the shutdown in advance. MCA kept our hopes high that the MCC could survive the funding chop,” Hara said. He also noted that Malawi had not factored these projects into the 2025-26 National Budget, meaning the government will have to seek fresh financing to move forward.
The collapse of the compact deals a major blow to Malawi’s infrastructure ambitions, as the funding was intended to modernize key transport corridors and improve land management systems. The sudden withdrawal leaves the country scrambling for alternative investment sources.
The Millennium Challenge Corporation, established in 2004 under President George W. Bush, was designed to fight global poverty by investing in countries committed to good governance and strong economic policies. At its peak, the agency managed over $5.4 billion in active grants across 20 developing countries, funding projects in energy, education, infrastructure, and agriculture.
However, MCC’s closure now places ongoing programs in countries like Cote d’Ivoire, Mozambique, Nepal, Mongolia, Senegal, and Belize at risk, with many fearing that incomplete projects could further destabilize fragile economies.
Strategic analysts warn that the shutdown could open doors for China and other global players to expand their influence in Africa and elsewhere, potentially altering the global balance of power. With the MCC out of the picture, nations like Malawi may turn to alternative partners.
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