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The U.S. Secretary of State Antony Blinken and the President of Malawi Lazarus Chakwera joined nearly 100 leaders from the U.S. and Malawi on Wednesday to sign the Malawi Transport and Land Compact — a $350 million infrastructure grant between the U.S. government’s Millennium Challenge Corporation (MCC) and the Government of Malawi.
MCC Chief Executive Officer Alice Albright and the Malawi Minister of Finance and Economic Affairs Sosten Alfred Gwengwe served as signatories for the compact.
“This agreement opens a new chapter in the partnership between the United States and Malawi,” said Secretary Blinken, who is the Chair of MCC’s Board of Directors. “[A partnership] that builds on our close collaboration over decades, our shared democratic values, and the joint vision for a prosperous, stable, resilient Malawi…Malawi will take the lead on putting these plans into action. Like all MCC endeavors, these projects will be transparent, they will be collaborative, and built to meet the highest standards of quality.”
The Malawi Transport and Land Compact, which includes an additional $26.5 million contribution from the Government of Malawi, is designed to reduce transport costs by upgrading more than 300 kilometers of roads to connect farmers to markets and by strengthening the country’s land administration.
“We are proud to continue our longstanding partnership with the Government of Malawi, which will have brought, in total, more than $747 million worth of transformative projects to the country once the infrastructure projects from our latest program are complete,” said Albright. “All together, MCC’s grant programs in Malawi are expected to benefit more than 12 million people, which is roughly half the total population, while cutting across key sectors such as transportation, power, and agriculture. These investments, coupled with key policy and institutional reforms in the country’s land sector, will facilitate additional private-sector investments and directly benefit Malawi’s greatest resource — arable land.”
Albright added that MCC has invested more than $9 billion with 25 African countries. These investments are expected to benefit more than 90 million people — including 5.3 million Malawians from the new Malawi Transport and Land Compact.
Malawi’s economy has been significantly impacted by the competing crises of global climate change, COVID-19, and the Ukraine/Russia conflict. While conducting a joint analysis of Malawi’s economy, MCC and the Government of Malawi identified the country’s exceptionally high transport costs as a key economic barrier between farms and markets, as well as difficulties with access to land for investment due to uncertain land rights.
The compact’s Accelerated Growth Corridors Project will invest more than $228 million in Malawi’s transportation sector, including road updates in four selected corridors located in prime agricultural areas. The project also prioritizes road safety, future maintenance, and increased competition by helping the Government of Malawi address policy, legislative, institutional, and funding challenges that limit greater road improvements.
The compact’s Increased Land Productivity Project aims to sustainably improve how land is used and managed at the national and sub-national level, including the coordination of land planning, revenue collection and land services. The project also seeks to modernize and increase the effectiveness of property tax management systems that support improved service delivery in Malawi’s four largest cities. The project’s activities will improve the function of land markets while improving overall land value and encouraging private investment.
“This is an historic occasion,” said President Chakwera during the ceremony. “This is a very important program for Malawi, and a testament, not only to the longstanding relation between Malawi and the United States, but also to the progress Malawi has made in recent months to meet the exacting standards of MCC’s scorecard, [and] the policies we have implemented for the advancement of government, economic freedom, democracy, investments, and the fight against corruption.”
“The fight against corruption ensures that investments like MCC’s compact fulfil their intended purpose and yield their intended benefits,” added President Chakwera.
MCC and the Malawi government first partnered in 2004 with a $20.9 million threshold program and again in 2011 with a $350.7 million energy-focused compact. The prior MCC-Malawi compact built the infrastructure Malawi needed to connect to the Southern African Power Pool, expanded access to reliable power through the construction and refurbishment of 22 substations and 367 km of transmission and distribution lines, delivered an additional 12 megawatts of clean energy to the country, and supported the reforms necessary to bring independently-produced power onto the Malawian grid.
“I am most grateful, once again, to the American people and the U.S. government for their partnership in developing Malawi,” said President Chakwera. “Together, we are making strides for everyone’s good.”
The Millennium Challenge Corporation is an independent U.S. government agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights.
READ FULL REMARKS BY Secretary Antony J. Blinken at the Millennium Challenge Corporation MOU Signing with Malawian President Lazarus Chakwera, Malawian Finance and Economic Affairs Minister Sosten Gwengwe, and MCC CEO Alice Albright
MS ALBRIGHT: Good morning. Thank you all so much for joining us today to celebrate a remarkable moment in the longstanding partnership between the United States and the Republic of Malawi.
My name is Alice, and I am the CEO of the Millennium Challenge Corporation. I’d like to thank you so much, Secretary Blinken, for convening us and hosting us today in the wonderful State Department. I’d also like to thank you, President Chakwera, and your finance minister, Minister Gwengwe, for being with us. It’s a great honor to have you with us. Mr. President, thank you for your leadership and your commitment to building a prosperous future for all of the people of Malawi.
It’s a great honor to lead the Millennium Challenge Corporation, an agency that has invested $15 billion in grant financing towards programs that boost economic growth and reduce poverty. In Africa alone, we’ve invested more than $9 billion across 25 countries on the continent in programs that are expected to benefit almost 90 million people.
2022, this year, has been a particularly big year for the agency. All told, we expect to sign investments worth $1.8 billion that will directly benefit more than 13 million people, 75 percent of whom live on the continent. These investments will help deliver clean water, improve sanitation to help fight disease, make transportation more efficient through the construction of roads, boost agricultural yields by bringing irrigation to farmers, and increase access to reliable – to electricity so that households and businesses can thrive.
MCC’s partnership with Malawi dates back nearly two decades. In 2004, MCC’s board of directors selected Malawi as eligible for a $21 million threshold program. That’s how we got started. And together, with that threshold program, we tackled key policy areas to help improve public financial management. Then between 2013 and 2018, MCC and the Government of Malawi partnered to undertake a $350 million compact which was designed to overhaul the country’s power sector by constructing and refurbishing 26 sub-stations and 400 kilometers of transmission and distribution lines, delivering an additional 12 megawatts of clean energy and boosting the country’s hydropower generation capability. Those transformative investments in the country’s power sector are expected to benefit over 7 million Malawians, including people like Valison Fira, who’s a butcher who lives in Lilongwe and whose business needs reliable, affordable electricity to thrive. (Applause.)
Building on this success and Malawi’s strong commitment to democratic governance, MCC’s board then selected Malawi for a second compact in 2018. And today we are signing that. So it’s a great moment.
And since then, MCC has developed this new compact, again in close partnership with your country, Excellency, and everyone on your team, and also with close consultation with the private sector and civil society.
And so today, Mr. President, Mr. Secretary of State, we are so proud to continue our longstanding partnership by investing another $350 million to reduce transport costs and strengthen land administration in the country. MCC’s $350 million grant is further complemented by a $26 million contribution in-kind from the Government of Malawi. And again, a strong signal of your government’s commitment to the success of the compact.
This compact which you will sign today is called the Malawi Transport and Land Compact, and it will reduce transportation costs and improve the ability of farmers to get their products to market by upgrading more than 300 kilometers of roads. This will be a help to farmers like Agnes Kapuka, who told my team that a new road would save her enormous amounts of time and money to help getting her products to market.
This program also prioritizes road safety and provides technical assistance to the Malawi Roads Authority to improve maintenance and planning. And further, the compact will support the Government of Malawi in addressing competition policy to help ensure that transport costs over time decrease while promoting sustainable management of the transport sector, including at the local level.
Arable land is one of Malawi’s greatest resources, and this compact will also support reforms to help expand national land-based revenues and key institutional changes needed to increase productivity.
After all the work is completed, MCC and Malawi will have worked together on more than $747 million worth of transformative projects, benefiting a total of 12 million people – more than half the country’s population.
I’d like to thank everybody involved who has worked so hard to advance these important investments. I especially want to commend the tireless work of the MCC team – many of which are there; there’s Joel. (Applause.) And when we work closely with a team, we also work very closely with people in the countries with whom we work, and I also would like to recognize Dye Mawindo, who has worked tirelessly. (Applause.)
So that’s the team over there that’s done all the hard work to make this a reality. So again, huge thank you. There’s lots to go, though, but huge thank you.
I’d also like to recognize Ambassador Young – where’s David? There’s David. Hi, Ambassador Young – for his tireless support to bring this to fruition. Thank you. We also have a lot of work ahead of us, so we’re going to call you a lot, as well as Malawi’s ambassador to the United States, Justice Esmie Chombo. Thank you so much, Madam Ambassador.
Also I know that there are two teams in Washington and Malawi that have contributed huge amounts of their technical expertise to making this compact a reality. I can’t name everybody here, but they’ve all done an excellent job, and one of the secrets to Malawi – to MCC’s success in working with countries, Malawi being a strong example, is how closely our teams work together on technical matters. So you have my huge gratitude, everybody involved to make today a reality, and we very much look forward to making – to signing and getting on with really the deep, hard work to get on with the success of the compact.
So today’s celebration is only a beginning. Much of the challenging work lies ahead. I look forward to working with all of you to ensure that the Malawi Transport and Land Compact delivers and helps give the people of Malawi the tools they need to build a more prosperous future. Thank you very much. (Applause.)
I’m now going to call a number of our distinguished guests to come and share their remarks. So with that, I would like to first introduce our next speaker, the Malawian minister of finance and economic affairs, Sosten Alfred Gwengwe. He has been absolutely instrumental in getting this compact organized. He’s also a member of parliament in Malawi and has served in cabinet in various positions, including the minister of transport and industry and trade. He was appointed by the minister of finance and economic affairs in January 2022, and we are so pleased to have you with us today, Honorable Minister. Please, Minister, the podium is yours. (Applause.)
MINISTER GWENGWE: The president of the Republic of Malawi, His Excellency Dr. Lazarus McCarthy Chakwera; Secretary of State of the United States of America, His Excellency Antony Blinken; the MCC CEO, Ms. Alice Albright; Ambassador Chombo; Ambassador David; the MCC vice president for the compact operations, Ms. Kim – think I’ve seen you right there; secretary to the president, Madam Zamba; all protocols observed. Your Excellencies, today is a very special day for Malawi, because this day marks the conclusion of several years of very hard work on the part of our two teams, the Millennium Challenge Corporation and the Malawi Millennium Development Trust.
If we’re overjoyed therefore, please do understand it is because we can now breathe a huge sigh of relief on the completion of the compact development work. My congratulations – (applause) – thank you. My congratulations go to all who have contributed in various ways in making today a reality.
Your Excellencies, I can report that throughout the multiyear compact development process, the MCC and the MMD engaged in regular and inclusive consultations with a wide range of stakeholders. These consultations sought to identify the binding constraints to our economic growth, assess underlying root causes driving these binding constraints, identify potential project opportunities, and make informed design decisions for the various interventions. These consultations included relevant government ministries and departments, local communities likely to be impacted by the program, and related local officials, representatives from the local and international civil societies, and nongovernment organizations, private sector leaders, and also development partners.
And the proposed interventions under this compact include two main projects; firstly, the construction of four corridor roads in the three regions of Malawi, and this proposed activity seeks to reduce travel time and costs for smallholder farmers throughout – through the improvement of targeted roads in selected transport sector. This will improve road conditions and thereby facilitate greater flow of agricultural products from farm gates to urban, regional, and export markets.
And secondly, the land project that will improve land administration services in our main land institutions – this is a policy and institutional reform activity that seeks to improve Malawi’s land governance institutions, especially with respect to the revenues that these organizations rely on to operate efficiently and effectively. We are convinced that increased funding at national and city levels and expenditure system improvements will translate into improved land services to our people.
Your Excellencies, I am aware that the signing of the second compact will mark the beginning of a fresh set of tasks that need to be undertaken before the compact can enter into force. And so, whereas the compact development exercise has been concluded, our two teams cannot afford to lower their guard. We have a long list of conditions that have to be fulfilled and administrative actions that are required to be undertaken. I am advised that the average lapsed time between compact signing and entry into force can range between 12 months or so. We in Malawi are determined to keep this period to the barest minimum. I can promise you, Your Excellencies, that we will leave no stone unturned to do our part. And I call upon all the stakeholders to work together to ensure that this waiting period is kept to the shortest period as – to as short a period as possible.
I end my remarks this morning by underscoring our profound gratitude to the American Government for this and other equally life-changing interventions to the people of Malawi. I am also indebted to the compact development team, the MMD, the Malawi side, led by Dye Mawindo, and Joel Wiegert, leading the MCC team on our side. They have worked very long hours. (Applause.) They have worked very long hours to develop the various activities that now comprise the interventions under the second compact.
On that note, it is now my similar honor to invite His Excellency the President of the Republic of Malawi Dr. Lazarus McCarthy Chakwera to address us. Your Excellency, sir. Thank you. (Applause.)
MS ALBRIGHT: Thank you, Honorable Minister. I look forward to working with you to make this compact a success, and you have my full assurance that I and my team will work very quickly, as much as we can, to move things along.
It is now my distinct honor to introduce our next speaker, the United States Secretary of State, Secretary of State Antony Blinken. Secretary Blinken began his career in public service at the State Department and over the subsequent three decades has served in three presidential administrations and has helped shape U.S. foreign policy to assure that it protects U.S. interests and delivers results for the American people. He’s also been kind enough to host us today. So please join me in welcoming the Secretary of State to the podium. (Applause.)
SECRETARY BLINKEN: Good morning, everyone. It is wonderful to see you here, to see you at the State Department, on a very happy and positive occasion.
Mr. President, Mr. Minister, thank you for your partnership, but thank you especially for your leadership. And I’ll have more to say about that in a few minutes, but it’s been remarkable and deeply, deeply appreciated.
Alice, thank you for your leadership of the Millennium Challenge Corporation. It is always a good day at the State Department when an Albright is here in this building. (Laughter.) And I just want to say to you and to your MCC colleagues: extraordinary work on this, but also around the world. I’m not sure if we need to think about changing what MCC stands for. Maybe “Making Change Concrete.” (Applause.) “Making Change Cool.” (Laughter.) But both of those are true, and it’s incredibly powerful, and I’m really so pleased to be able to join all of you in celebrating Malawi’s second Millennium Challenge Corporation compact.
This agreement opens a new chapter in the partnership between the United States and Malawi – one that builds on our close collaboration over decades, as we’ve heard, our shared democratic values, and a joint vision for a prosperous, stable, resilient Malawi.
As we’ve heard, this compact will contribute up to $350 million to reduce poverty and support inclusive economic growth in Malawi. And we’ll do this by strengthening two critical building blocks: roads and land administration. You heard Alice talk about this, but this really is in a sense where the rubber meets the road. It’s incredibly powerful.
First, upgrading major roads will make urban markets more accessible, so that people in rural areas can travel quickly and cheaply, and more swiftly bring their products to market. In the doing, we’ll also help combat gender-based violence along these roads and markets, so that women can safely transport and sell their goods.
Second, improving government administration will help Malawi make the most of one of its core economic resources, and that’s land. Helping strengthen record keeping, for example, will make it easier for families and marginalized people to prove that they own their land – and protect themselves from exploitation. For companies, these records will mean that they can invest with confidence, they can grow their businesses, they can create more jobs for Malawian citizens.
What’s so critical and what’s so important about the way the MCC does its work is that we’ve developed these priorities together – identifying the barriers to economic opportunity, devising ways to solve them. Malawi will take the lead in putting these plans into action.
Like all MCC endeavors, these projects will be transparent, they’ll be collaborative, and built to meet the highest standards of quality. They’ll provide grants to Malawi, not debt. (Applause.) And they’ll support Malawi’s development and its efforts to strengthen good governance, accountability, democracy – the hallmarks of the president’s administration.
With these new projects, the United States and Malawi will build upon the progress we’ve made through the MCC – and through many other partnerships that we have.
For decades, we’ve worked with Malawi’s government, with NGOs, with civil society, with the private sector on a broad range of issues, including combatting HIV/AIDS. The United States has contributed $1 billion to this effort over the last two decades, and in the last dozen years alone, we’ve reduced the number of HIV and AIDS-related deaths by 80 percent. (Applause.) These partnerships are quite literally changing lives.
During COVID, the United States has been able to donate more than 2.3 million safe, effective vaccine doses through COVAX – free of charge, with more to come as needed – to help protect Malawians from death and severe illness.
We’ve expanded access to public universities in Malawi, offering scholarships, distance learning programs that have benefitted more than 1,500 students who otherwise might not have been able to attend.
And for years, we’ve collaborated to strengthen Malawi’s food security – improving nutrition, increasing food production, connecting more farmers to markets. Now, President Putin’s war of choice on Ukraine has contributed to driving up the price of food, the price of fuel, fertilizers, as well as their availability, including in Malawi – rolling back some of the hard-earned development gains and driving more people back into poverty.
We are determined to act effectively against this, to help lift people up to help create their own capacity to produce in a sustainable way the food that not only Malawi needs, but that other countries in Africa and even beyond need. I’m convinced that there is a remarkably positive opportunity to build durable agricultural capacity and production in Malawi so even as we respond to the immediate, we will work together on the long term. (Applause.)
And Mr. President, I want to acknowledge again your leadership, your deep commitment to democratic and economic reform. And to you, to the finance minister, you’ve been stalwart partners, and I know that this is an incredibly challenging time. Malawi’s been on the receiving end of an – almost a perfect storm of challenges. We’ve had climate change, we’ve had COVID, we’ve had conflict – that are all having consequences for the Malawian people. And I can just tell you that the United States is committed to working with you, not only to get through the stormy period, but to get to a brighter, enduring day, and this day is one of them. (Applause.)
One critical component to this is the extended credit facility with the IMF, something the United States strongly supports. We are stepping up to try to help those who are in greatest immediate need. One way we’re doing that is through the President’s decision to significantly expand the Feed the Future program. This is the flagship program that the United States has to end global hunger, to combat malnutrition. We’ve extended it to eight new countries, including Malawi.
So what does that mean? Over the next five years, we are working with Congress to invest over $11 billion around the world toward, again, not only responding to the immediate crisis, but – critically – building resilience that will better prepare communities worldwide not only to withstand future shocks, but again, to have enduring agricultural productive capacity.
A few months ago, I was at the United Nations. We convened countries around the food and security crisis that we’re facing. And one of the things that was most striking to me was – even as we met with a large group of foreign ministers, we seized the Security Council – I spent some time with 10 colleagues from Africa, and the thing that resonated loudly and clearly with me was the desire and need not only for emergency assistance to combat the current crisis, but even more for helping together, as partners, build sustainable, durable production in Africa by Africans. And that’s what we’re working on. (Applause.)
In these areas and more, the United States is dedicated to finding solutions to the biggest challenges of our time with Malawi and its people, not for Malawi. That’s the guiding principle. That’s the guiding principle of this administration’s partnership with Malawi; it’s the guiding principle of our strategy for sub-Saharan Africa, which I had a chance to lay out recently in South Africa.
And fundamentally, it’s the only way that any of us can achieve our shared goals, whether it’s creating economic opportunity, ending public health crises, fighting hunger, building a better future of opportunity for all our people.
We know that when we work together, we can accomplish real change for our people. That’s what today is about. It is accomplishing real change for the people of Malawi.
And again, we don’t have to look any further than the MCC and the impact that it’s already had.
We’ve mentioned a couple of real people, individuals, who will benefit. I want to mention another one, a woman by the name of Judith, who participated in Malawi’s first MCC compact. She used to do small-scale farming, selling peanuts and selling peas. Through the MCC, she learned how to raise and sell tree seedlings – with her profits, she was able to cover school tuition for her child. One of her business partners was able to build a better house. Their new venture also slowed soil erosion – which helped protect a nearby river and decrease interruptions to the hydropower it generated.
So we can see an incredibly virtuous cycle that this produces, and it starts with a compact and it ripples outward in incredibly powerful ways.
So I look forward to continuing this work together and to seeing the new opportunities, the concrete opportunities, the concrete change that this compact will bring. It will open – help open an even brighter future for the people of Malawi and for the partnership between our countries. So to all of you, Mr. President, Alice, thank you so much for today, and we’re looking forward to many days ahead. Thank you.
MS ALBRIGHT: Thank you so much, Secretary Blinken, for those remarks. We thank you, again, for your leadership as our relationship with Malawi continues to thrive and advance.
I’m now pleased to introduce our final speaker for today, the President of the Republic of Malawi President Chakwera. It’s wonderful to have you with us. President Chakwera has also served as a member of parliament in Malawi, served as the chairman of the South African Development Community between August 2021 and August 2022. We are so, so excited to have you here today. President Chakwera, let me respectfully ask you to come join us at the podium.
PRESIDENT CHAKWERA: Thank you. Good morning.
AUDIENCE: Good morning.
PRESIDENT CHAKWERA: Honorable Mr. Secretary, Ms. Albright, ambassadors, excellencies, ladies and gentlemen, this is an historic occasion. The signing of this second MCC Compact for Malawi is no ordinary event. This is very, very important program for Malawi and a test, not only to the longstanding cordial relations between Malawi and the United States, but also to the progress that Malawi has made in recent months to meet the exacting standards of MCC’s scorecard, the policies we have implemented for the advancement of governance, economic freedom, democracy, people-centered investments, and the fight against corruption. (Applause.)
I’m aware that after Malawi’s selection for its first MCC compact in the energy sector before I came into office, progress had stalled for years in securing this second compact for the transport sector because of issues of corruption. But in the past two years, my administration has taken a zero-tolerance stance against corruption, shielding no one from investigation and prosecution, as well as removing and suspending from office those with a case to answer before our independence and credible courts of justice.
Our desire in doing so is to ensure that everyone understands that on our list of obstacles of Malawi’s development, corruption ranks number one. And so we consider it our biggest enemy. We will therefore continue to fight it and stand against it no matter how long it takes until it is defeated. The fight against corruption ensures that investments like the MCC compact fulfill their intended purpose and yield their intended benefits.
From the first MCC compact, we saw the construction of over 400 kilometers of transmission and distribution lines. We saw the refurbishment of 26 substations, resulting in both extended access to reliable power throughout the country. We saw the upgrading of Nkhula A Hydroelectric power plant through which its generation capacity was increased by 33 percent. We saw progress towards the trading the of power with Mozambique and the SADC region through the Southern African Power Pool. We saw creation of an enabling environment for independent private sector power producers to enter the market. And with this second compact, we will see the construction of roads across the country.
The MCC second compact for Malawi comes at a very opportune time, as it will augment my government’s effort to create a conducive environment for private sector growth, especially to benefit smallholder farmers in rural areas in Mzimba, Lilongwe, Mangochi.
And so I thank MCC for their unwavering support given to my government to secure this compact development process. May I also take this opportunity to thank all those who participated in constraints analysis process from MCC, government, local government authorities, private sector, and nonstate actors who provided information and technical advice to the compact development team.
Many names have been mentioned already, and on this note, allow me to refer to an earlier conversation that I had with MCC’s CEO when I was last here in March. I would like to reiterate the point that I made then. During that conversation, I had asked MCC to consider complementing the investment that is to be made through this second compact with one in the three countries of Malawi, Mozambique, and Zambia by way of a regional compact. (Applause.)
As the immediate past chair of SADC, I believe that enhancing regional integration with our neighbors through foundational infrastructure, such as rail and roads, will have phenomenal economic benefits as safe and reliable rail and road transport investments will certainly help reduce barriers to growth and create opportunities for all of our people. In our case, as a land-linked country, securing a reliable and inexpensive link to the sea would de-risk our economy. This is as request that I’d like to leave with MCC to continue to mull over – (laughter) – as we think ahead.
But I am most grateful once again to the American people and the U.S. Government for their partnership in developing Malawi. Together, we’re making strides for everyone’s good. Thank you. (Applause.)
MS ALBRIGHT: Your Excellency, thank you. Wonderful remarks. Thank you, sir. Your leadership will be absolutely essential to ensuring this compact is a success.
I’d like to now invite the Secretary of State as well as the minister of finance up to the podium and we will actually sign. Thank you.
(The memorandum was signed.)