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US cautions Malawi on economic reforms despite reinstatement of $350 million grant

13 July 2012 Malawi Today/Zodiak Radio

Visiting Millennium Challenge Corporation (MCC) Chief Executive Officer Daniel Yohannes has cautioned Malawi that the US will continue to closely monitor Malawi’s economic and political governance.

In June 2012, MCC reinstated the Malawi Compact, a $350.7 million grant designed to revitalize Malawi’s power sector. The compact was placed on operational hold in July 2011 and formally suspended in March 2012 due to a pattern of actions by the Government of Malawi that conflicted with the democratic governance criteria that MCC uses to select its compact partners.

“MCC will continue to closely follow the changing democratic and economic land scape in Malawi,” said Yohannes during a news conference in Lilongwe Thursday.

Daniel W. Yohannes, arrived in Lilongwe, Malawi on Tuesday for a series of meetings with President Joyce Banda, government officials and members of Malawi’s civil society and private sector.

MCC’s Malawi Compact will reduce poverty by improving the availability, reliability and quality of Malawi’s power supply. The compact will fund rehabilitation, upgrades and modernisation of power systems, and will support the Government of Malawi’s policy reform agenda in building capacity and providing technical assistance in critical sector institutions.

Following the CEO’s visit, an MCC technical mission will travel to Lilongwe to prepare for compact implementation, including carrying out a reassessment of project activities after nearly one year of inactivity