US to roll out compact Sept

The United States of America says it will roll out a new Millenium Challenge Corporation (MCC) compact for Malawi in September this year focusing on improving agriculture and road infrastructure.

In an exclusive interview last week, new USA Ambassador David Young said MCC, a US Government agency, is developing a second compact with Malawi that will focus on three areas.

These areas include increasing land productivity through sector reforms, improving road infrastructure to reduce transport costs from farm to market and incentivising private investment into inclusive agriculture products.

He said: “So, really it is a comprehensive programme which focuses on roads and agriculture. We will have a full announcement about the extent on what this compact will focus on later.”

Young said the design of the new compact is also in line with the country’s long-term development strategy, the Malawi 2063 Agenda (MW2063).

According to the project’s brief The Nation has seen, the new compact seeks to promote agriculture commercialisation with a focus on rural communities, who will be linked to the commercial value chain.

Reads the report in part: “This is to be achieved through the facilitation of inclusive agribusinesses, provision of technical assistance, and establishment of a facility that will assist smallholder farmers particularly women to access to finance.

“A further activity, christened Competitive Transport Activity, aims to construct secondary and link roads to facilitate farm to market access.”

Under the project, selected roads in rural areas will be improved to bitumen standard while some will be gravelled to facilitate easy access to markets for farmers.

One of the roads earmarked for upgrading under the corridors initiative will start from Chigwirizano in Lilongwe to Mchinji Road through Malingunde.

In October, 2021 MCC engaged a consultant to undertake a detailed feasibility study of the shortlisted eight corridors to assess and rank them according to the expected economic benefits to accrue to Malawi.

The consultant, according to the projects report, has completed data collection on all the eight corridors.

The report said the main activity of land productivity is to make it more productive through better functioning land markets and increased investment.

The report reads: “The project seeks to achieve this goal by implementing three distinct activities: Land administration capacity enhancement and devolution, Leasehold estates land activity, and Land-based revenue mobilisation activity.”

On the cost of the new compact, Young said this will form part of the announcement to come later.

He said it is the US Government’s commitment to help Malawi achieve its full development potential.

Malawi qualified for the second compact towards the end of 2018 after successfully implementing the energy focused compact, which run for five years from 2013 to 2018. The last compact was worth $350.7 million (about K257 billion) .

The Malawi Government established the Malawi Millennium Development (MMD) Trust to develop the second compact.

According to a report from MMD, the second compact has five phases of development processes, namely preliminary analysis, problem diagnosis, problem definition, project development and negotiations.

The process is now on project development and in few weeks negotiations are expected to start before the signing of the new compact slated for September.

In October last year, MCC country director for Malawi Joel Wiegert, alongside MMD chief executive officer Dye Mawindo met President Lazarus Chakwera in Lilongwe to brief him on the compact.

When contacted yesterday for details on the areas of focus, Mawindo asked for more time before granting us an interview.

But in an earlier sensitisation to journalists on the new compact, he is on record as having said that under the second compact the expectation was to see Malawi getting some funding to be invested in access to land and agriculture and transport to markets.

He also hinted that in the new compact, MMD will be working in at least three districts in the country.

To be eligible, Mawindo said MMD looked at districts that are principally agricultural with good rainfall and water bodies for irrigation from which the number was reduced from 28 to 15.

He said another criteria was on roads and whether they would produce best results for the country, thus, the number was further trimmed to eight districts.

Through the MCC energy compact, capacity at Bunda sub-station was doubled, a 132 kilovolts (kV) overhead transmission line from Nkhoma to Bunda Turn-off was erected and consruction of two 400/132 kV power transmission lines has since been completed.

The compact also added 12 megawatts (MW) following the rehabilitation of Nkula A Hydro Power Station to increase from 24MW to 26MW. It also covered administrative reforms in the power sector to improved efficiency at Escom and Mera.