Secretary Blinken at Millennium Challenge Corporation MOU Signing with Malawian President Lazarus Chakwera

Department of State

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.

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