Trump withdraws financial support for America-backed African infrastructure projects
The Millennium Challenge Corporation (MCC) is abruptly shutting down its global projects, including infrastructure development and modernization of electricity grids, leaving constructions unfinished unless other partners take the mantle.
During a staff meeting on Wednesday, an MCC executive announced that "we're winding down" and all programs would be terminated, according to an insider present. This decision came after a memo, obtained by AFP, revealed a "significant reduction" at MCC under Elon Musk's Department of Government Efficiency, resulting in job losses for the majority.
Established in 2004 under George W. Bush with bipartisan support, MCC invests US funds in developing countries that adhere to economic transparency and good governance standards. Since its inception, MCC has invested approximately $17 billion in various projects.
Recently, Zambian President Hakainde Hichilema signed a half-billion-dollar agreement with the US in October to improve roads, irrigation, and electricity, expressing his commitment to upholding shared values with the US.
The Trump administration's disinterest in sub-Saharan Africa and opposition to development aid, perceived as non-beneficial to the US, may have played a role in MCC's shutdown, along with the closure of the US Agency for International Development (USAID), a larger government body.
The MCC employee, requesting anonymity to avoid repercussions, emphasized the differences between MCC and USAID, stating, "We're not doing charity. We're not doing social justice. We're creating a conducive environment for private-sector investments in foreign economies. This is something that benefits America."
Some critics argue that closing MCC could undermine efforts to counter China's global influence, as infrastructure projects have become a signature selling point for China. Chinese President Xi Jinping pledged another $51 billion of investment in Africa over the next three years in September.
Despite this, MCC will inform countries about compact terminations in the coming days—within 40 days according to the insider. After negotiations with Musk's team, MCC was granted extensions in four countries—Ivory Coast, Mongolia, Nepal, and Senegal—allowing them an additional three months to wrap up construction sites safely.
Critics, such as Elizabeth Hoffman, executive director for North America at ONE, an anti-poverty group co-founded by Bono, have voiced concerns about MCC's shutdown. Hoffman contends that MCC represents an innovative approach to development assistance, holding governments accountable and effectively countering malign foreign influences like China.
- The abrupt shutdown of the Millennium Challenge Corporation (MCC) will affect international projects, such as infrastructure development and electricity grid modernization in various countries, as constructions may be left unfinished unless other partners take over.
- The closure of MCC, which invests US funds in developing countries adhering to economic transparency and good governance standards, could leave a significant impact on foreign economies and their private-sector investments.
- The decision to wind down MCC's programs was revealed in a staff meeting on Wednesday and attributed to a "significant reduction" under Elon Musk's Department of Government Efficiency, resulting in job losses for the majority.
- The recent announcement of MCC's shutdown follows concerns about the Trump administration's disinterest in sub-Saharan Africa and the closure of the US Agency for International Development (USAID), a larger government body.
- One of MCC's employees attributed the differences between MCC and USAID to the former not focusing on charity, social justice, or general-news issues but instead on creating a conducive environment for private-sector investments in foreign economies.
- Critics, such as Elizabeth Hoffman, executive director for North America at ONE, have expressed concern that the MCC shutdown could undermine efforts to counter China's global influence, as China has been investing heavily in Africa, particularly in infrastructure projects, such as those made by its president, Xi Jinping.
