President Donald Trump’s administration on Wednesday ordered the closure of a US agency that invested billions in African and other developing countries’ infrastructure in return for good governance, effectively ceding ground to China.
The Millennium Challenge Corporation (MCC) will immediately exit projects around the world, from building roads to modernising electricity grids, likely leaving the works under construction unless other partners step in.
An MCC executive at a staff meeting on Wednesday told staff that “we are coming to an orderly close” with all programs to be discontinued, according to an employee who was present.
The meeting came after a staff-wide memo,
seen by AFP, informed that billionaire
Elon Musk’s Department of Government Efficiency was imposing a “significant reduction” at MCC and laid out practicalities for the majority of staff who will lose jobs.
Founded in 2004 under former president George W. Bush with bipartisan support, MCC signs contracts for US investment in developing countries that meet standards on economic transparency and good governance.
MCC has since invested $17 billion with numerous prominent projects underway.
Just in October, Zambian President Hakainde Hichilema — who has consolidated democracy at home — vowed to keep upholding “shared values” with the United States as he signed a half-billion-dollar agreement to improve roads, irrigation and electricity.
Trump has made clear he has limited interest in sub-Saharan Africa and that he opposes development aid, which he sees as not directly benefiting the United States, earlier shuttering the US Agency for International Development, a much larger government body.
The MCC employee, speaking on condition of anonymity to avoid retribution, said the organisation differed significantly from USAID.
“We’re not doing humanitarian assistance. We’re not doing social justice. We’re very much building up an environment for private-sector investment in foreign economies,” she told AFP.
“This is a very different thing, something that actually does put America first,” she said.
“It’s interesting, if we’re worried about China’s influence in the world, that we would shutter MCC, which builds large-scale infrastructure that counters China’s influence.”
Area of competition with China
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Infrastructure projects — roads,
hospitals and other buildings
— have been a signature selling point for China, which the United States sees as its primary adversary.
Chinese President Xi Jinping in September vowed another $51 billion of investment in Africa over the next three years.
The United States, under former president Joe Biden, acknowledged it cannot keep up with such high-profile, state-led spending but argued it can offer a more sustainable model.
MCC will inform countries on Friday that compacts will be terminated within 40 days, the staffer said.
After negotiations with Musk’s team, MCC was allowed extensions in four countries — Ivory Coast, Mongolia, Nepal and Senegal.
In Nepal, Mongolia and Senegal, the MCC will have up to three months, with hopes of making construction sites safe.
The goal is “so someone is not going to fall into a pit or something,” the employee said. “Whether or not we’ll be successful, I don’t know.”
MCC was granted slightly longer in Ivory Coast, where the project, which includes support for integrating major road arteries, is nearing completion.
The Nepal project was sealed
in 2022 despite street protests against it by leftists in Kathmandu.
The $500 million grant in China’s small Himalayan neighbour aims to improve roads and increase cross-border electricity trading with US-friendly India.
In Senegal, a $600 million initiative — $550 million from MCC and $50 million from the Senegalese government — has included ramping up electricity outside urban areas.
Elizabeth Hoffman, executive director for North America at ONE, the anti-poverty group co-founded by Bono, voiced alarm at the shutdown.
“MCC brings an innovative and entrepreneurial approach to development assistance that holds governments accountable and effectively counters malign foreign influences like China,” she said.
MCC and the Trump administration did not immediately comment on the cuts, which were first reported by the development specialist site Devex.
By AFP