LILONGWE-(MaraviPost)-Malawi has failed to qualify for a second round of funding under the US-funded Millennium Challenge Compact (MCC) which starts this year.
This follows outcomes of a December 19, 2017 meeting of the MCC Board of Directors.
Edward Monster, Public Affairs Officer in the US embassy in Lilongwe, said Malawi would have to look into a number of areas that would constitute eligibility for assistance in future.
He said there is a need for demonstration of a strong and successful close-out to the current compact, including adoption of an electricity tariff in line with the costs of maintaining and expanding the national system; conclusion of independent power purchase agreements; and sound corporate governance and financial stability of the electricity utility, ESCOM.
“Selection for a second compact is not automatic. Second compacts are very competitive and subject to higher expectations and greater scrutiny for MCC funding eligibility.
“When considering a second compact, MCC’s Board of Directors looks for successful implementation of the first compact; a commitment to sector reforms; and continued improvement on MCC’s scorecard, especially on issues of Democratic Rights and Control of Corruption,” he said.
Monster said Malawi has to show strong commitment to combating corruption, especially given the trajectory on the Control of Corruption indicator in recent years, saying corruption undermines economic growth, which is why MCC examines a country’s commitment to combating it when choosing partner countries and developing and implementing programs.
He said for Malawi’s current compact, this means that “all MCC compacts are subject to a strict five year clock, and MCC’s current partnership with the Government of Malawi will end in September 2018.
Compacts are not extended in any country, which is why it is critical that the Government of Malawi successfully complete compact projects in this final year.
“The Government of Malawi must be focused on implementation of current efforts, including completion of infrastructure investments and necessary reforms in the power sector. Implementing these investments will not only help move the Government toward its commitments to expanding economic opportunity, but successful implementation will also be important to MCC’s Board in considering future partnerships.”
He said Malawi failed the second compact because eligibility is highly competitive and subject to higher expectations and greater scrutiny.
The board, he says, examines success in implementation of the first compact; a commitment to sector reforms; and continued improvement on MCC’s scorecard, especially on issues of Democratic Rights and Control of Corruption.
US Ambassador to Malawi Viginia Palmer has lately expressed concern with how the government of Malawi is working on fighting corruption especially in project procurement.
She indicated late last year she would not be surprised if Malawi flopped on the second compact,saying her government had evidence of underhand dealing by the board of the Electricity Supply Corporation of Malawi (ESCOM) in procurement processes.