On June 21 2012, the U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors voted to lift suspension of the Malawi Compact during its quarterly meeting. The lifting of the suspension was made after MCC had placed a hold on compact assistance to Malawi in July 2011 and formally suspended the compact in March 2012 due to a pattern of actions by the Government of Malawi that was inconsistent with the democratic governance criteria that MCC uses to select its compact partners.
Readers may be reminded of the many draconian laws the Bingu wa Mutharika administration enacted following Bingu’s resounding victory in the 2009 presidential elections.
However, when former president Joyce Banda came to power in April 2012, she and her government “took clear steps to reverse this pattern of actions”.
A press statement by the MCC released on June 21 2012, which I will quote copiously here stated: “the steps [President Joyce Banda took] included efforts to improve the human rights environment and to ensure that laws and institutions support democratic rights and processes. The Government of Malawi has demonstrated a commitment to providing accountability for the violent police response to demonstrations in July 2011. [May the souls of the 20 innocent Malawians who died during the peaceful march on July 19 2011 continue to rest in peace].
“These steps, and the resumption of a sound economic policy, restore MCC’s confidence in Malawi as a compact partner,” said the MCC statement.
MCC chief executive officer Daniel W. Yohannes stated, “As a result, I am pleased to move forward with this critical investment in Malawi’s energy sector. MCC expects Malawi to continue to demonstrate its clear commitment to strong democratic and economic governance.”
MCC funding has been supporting three main areas of the turnaround in power supply in the country. These are finances, corporate governance and operations.
“The planned $350.7 million Malawi Compact … intends to reduce energy costs to enterprises and households and improve productivity in the agriculture, manufacturing, and service sectors,” said Yohannes.
“The compact is composed of three projects to increase the capacity and stability of the national electricity grid and the efficiency and sustainability of hydropower generation. The Government of Malawi will invest in new power generation capacity by completing the construction of the Kapichira II hydropower plant,” said the statement.
The fruits of the completion of Kapichira II hydropower plant were there for all to see when former president Joyce Banda commissioned the hydropower plant on January 19 2014. Malawi waved goodbye to the energy crisis as the hydropower plant added a whopping 64 megawatts (MW) to the national grid increasing power output to 351 MW against a national demand of 350 MW.
But bent to downplay JB’s efforts, what have the DPP blabbermouths been saying? ‘She only commissioned Kapichira which was constructed by the Mutharika government’. The bad news for Malawi now is that the country has failed to qualify for consideration for a second compact eligibility which could have come with many more benefits for Malawians.
But this should not come as a surprise because before leaving the country last year, former MCC Resident Country Director for Malawi, Oliver Pierson warned that “political will is needed for Malawi to succeed in the second Power Compact.”
That Malawi has failed to qualify for a second compact is, needless to say, a big blow to many Malawians who like to call a spade by its real name. It means that the goodwill from the U.S. government is gone. Reason being that the Malawi Government has done too little in fighting corruption, one of the criteria MCC uses to qualify as a beneficiary.
Week-in and week-out, I am one of those who have been saying that this government is romancing with corruption. Now chickens have come home to roost. Unfortunately, it is the poorest of the poor who would have benefitted from a second compact that will continue to suffer. Half of the countries that were in the first compact have qualified for a second programme, Malawi has failed because, among other things, it has been massaging corruption. This is a lost opportunity! Malawi Government’s failure to demonstrate clear commitment to strong democratic and economic governance is a huge backstab on Malawians.