Following the review of external assistance by the U.S. administration, the Millennium Challenge Corporation (MCC) recommended moving forward with Mozambique’s Connectivity and Coastal Resilience Compact, valued at $500 million.
Despite the uncertainty surrounding the positions of the Trump administration, the United States Embassy in Mozambique announced that the investments planned for Zambézia Province under the Millennium Challenge Corporation (MCC)—an agency funded by the U.S. government—are expected to remain in place.
In April, MCC staff members began being asked to leave by the current Trump administration, in what was reported as the dismantling of the agency. However, it now appears that a different outcome is taking shape. The MCC Board met in August to review the dossiers under its consideration and recommended continuing with the program already signed with Mozambique, worth $500 million, to finance connectivity and coastal resilience projects.
“This recommendation reflects continued confidence in cooperation between the United States and Mozambique, highlighting the commitment to deliver tangible results for both peoples,” the Embassy said in a statement, adding that the program “is fully aligned with U.S. foreign policy priorities” and “aims to produce concrete benefits” for both countries.
What Is Planned?
The financing agreement was signed on September 20, 2023, at the U.S. Capitol in Washington, in the presence of Mozambique’s then President, Filipe Nyusi, during the administration led by Joe Biden. The investment package has been in preparation for several years to leverage the agricultural potential of Zambézia Province and includes a new bridge over the Licungo River, as well as 16 kilometers of road to connect to the country’s main highway, the N1. One of the objectives is to provide the region with greater resilience to extreme weather events during the annual cyclone season, which typically runs from December to April.
The investment package has been prepared over several years to harness the agricultural potential of Zambézia Province, in the central part of the country.
If implemented, this will be the second “compact” (the term used for the financing package) awarded by the MCC to Mozambique since 2007. The focus is on improving transport networks in rural areas, promoting commercial agriculture through policy and tax reforms, and strengthening coastal livelihoods through climate resilience initiatives.
Budget Details
The MCC plans to allocate $310.5 million to “Connectivity and Rural Transport” projects, including the bridge over the Licungo River and the construction of the Mocuba bypass, a project valued at $201 million. Nearly $83.5 million is earmarked for the construction of rural roads, and $11 million for road maintenance.
The “Agricultural Project Reforms and Investment” component includes $30 million to reform agricultural investment taxation and to build the Commercial Aggregation Platform, a facility designed to create new distribution routes for production from Zambézia.
There is also a $100 million allocation for “Coastal Livelihoods and Climate Resilience,” aimed at boosting productivity “through sustainable increases in fish and seafood harvesting and through non-extractive activities.”
The MCC is one of the instruments of U.S. foreign policy, providing grants for a fixed period to developing countries that, according to its promoters, meet “rigorous standards of good governance, from combating corruption to respecting human rights.”
The Board of Directors of the Millennium Challenge Corporation (MCC) met in August and recommended advancing Mozambique’s Connectivity and Coastal Resilience Compact. This recommendation reflects continued confidence in cooperation between the United States and Mozambique, underscoring the commitment to generate tangible results for both peoples.
Text: Editorial Staff • Photo: D.R.
