BLANTYRE--The U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors has lifted its suspension of the Malawi Compact, an MCC statement said Friday.
MCC placed a hold on compact assistance to Malawi in July 2011 and formally suspended it in March 2012 due to a pattern of actions by the Government of Malawi inconsistent with the democratic governance criteria that MCC uses to select its compact partners. But the statement said since Pres Joyce Banda’s inauguration in April, Malawi has taken clear steps to reverse this pattern of actions.
"These steps have included efforts to improve the human rights environment and to ensure that laws and institutions support democratic rights and processes," reads the statement, adding: "The Government of Malawi has also demonstrated a commitment to providing accountability for the violent police response to demonstrations in July 2011. These steps, and the resumption of sound economic policy, restore MCC’s confidence in Malawi as a compact partner."
MCC Chief Executive Officer Daniel Yohannes said by lifting the compact suspension, the MCC Board recognises that Malawi has taken decisive action to restore democratic accountability, to demonstrate respect for the rights of individuals, and to implement sound economic management.
"As a result, I am pleased to move forward with this critical investment in Malawi’s energy sector," he said, adding: "MCC expects Malawi to continue to demonstrate its clear commitment to strong democratic and economic governance."
The statement said the $350.7m Malawi Compact is expected to provide approximately $2 billion in benefits to an estimated five million Malawians.
"By reducing power outages and technical losses, enhancing the sustainability and efficiency of hydropower generation, and improving service to electricity consumers, the compact intends to reduce energy costs to enterprises and households and improve productivity in the agriculture, manufacturing, and service sectors," the statement concluded.
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