The Millennium Challenge Corporation (MCC) has deferred its decision on whether Liberia will secure a second Compact grant until December 2025, following its regular Board meeting. The decision, though not a denial, places Liberia in a crucial waiting period as the government intensifies efforts to demonstrate its commitment to reforms and economic priorities that align with U.S. development objectives.
The MCC Board of Directors reached the decision during its August 21 meeting, where it considered the findings of the U.S. State Department’s Foreign Assistance Review. On Friday, August 22, MCC Acting Vice President for the Department of Compact Operations, Mr. Jason Small, communicated the outcome in a formal letter to Liberia’s Minister of Finance and Development Planning, Augustine Kpehe Ngafuan.
In his letter, Small reassured the Liberian government that the door remains open for a second Compact.
“MCC’s continuing engagement on development of a Compact with Liberia will focus on areas that can inform the Board’s December deliberations,” Small wrote. “As a next step, MCC will work with you to identify sectors that a Compact could focus on to support economic growth in Liberia while offering opportunities for U.S. business engagements and other mutual benefits.”
He further disclosed that an MCC delegation will visit Monrovia in the coming weeks to advance these discussions. “Our team will be in touch with further details,” Small added, emphasizing MCC’s commitment to continuing dialogue.
The Acting Vice President also used the letter to highlight MCC’s pride in what was achieved through Liberia’s first Compact, which ran from 2016 to 2021. “MCC is proud of the work we accomplished together with the Liberian people,” Small said, recalling how the U.S.-funded program helped to modernize Liberia’s energy infrastructure and improve road maintenance practices.
Minister Ngafuan, who has been at the center of Liberia’s engagements with the MCC, warmly welcomed the update and responded with appreciation.
On behalf of President Joseph Nyuma Boakai, the Minister extended “deep appreciation to MCC management and the U.S. government for the strong support to Liberia’s development.” He emphasized that Liberia “avidly anticipates” the visit of the MCC team, expressing readiness to identify priority sectors that could potentially benefit from a new Compact.
“The Liberian government heartily welcomes the MCC’s decision to send a team to Liberia and looks forward to working together in identifying priority sectors that could benefit from a possible second Compact,” Ngafuan stated.
For Liberia, the stakes are high. The country’s first Compact, worth $257 million, closed in 2021 and focused primarily on addressing critical bottlenecks in the electricity and road sectors. The grant helped rehabilitate the Mount Coffee Hydropower Plant, support the Liberia Electricity Corporation (LEC), and improve road maintenance through the establishment of the Road Fund.
Analysts say a second Compact could inject hundreds of millions of dollars into the struggling Liberian economy, providing much-needed investment in areas such as agriculture, digital economy, and industrial growth. More importantly, it would also reinforce U.S.-Liberia relations at a time when Liberia is seeking broader international support for its development agenda under the Boakai administration.
One of the core principles of MCC is its “scorecard” system, which evaluates countries on indicators such as control of corruption, economic freedom, and investment in people. Liberia has historically struggled in some of these areas, particularly corruption and rule of law, though recent reforms have shown progress.
“The MCC Compact is never automatic,” noted civil society activist Fatu Kamara. “Liberia has to earn it. December’s decision will reflect whether the U.S. believes the government is moving in the right direction. It is not just about projects, it is about governance.”
President Boakai’s administration has made anti-corruption a central theme of its governance agenda, establishing stronger institutions for accountability and transparency. Many see this as a critical factor in the ongoing MCC deliberations.
The MCC decision comes at a time when U.S.-Liberia relations are under renewed attention. In July 2025, Minister Ngafuan visited MCC Headquarters in Washington, D.C., where he held talks aimed at strengthening Liberia’s case for a second Compact.
Mr. Small, in his August 22 letter, thanked Ngafuan for that visit and reaffirmed MCC’s appreciation for Liberia’s partnership. Analysts say the visit and the continuing dialogue reflect a recognition in Washington that Liberia remains an important partner in West Africa, particularly in promoting democracy and stability.
The MCC team’s planned visit to Liberia will be crucial. According to sources close to the Finance Ministry, discussions will likely center on potential focus sectors, including agriculture, energy, digital connectivity, and youth employment.
A senior official at the Ministry of Finance, speaking on condition of anonymity, said: “The government wants to ensure that whatever comes out of the second Compact directly impacts ordinary Liberians. We are looking at sectors that will create jobs, boost productivity, and improve service delivery.”
If approved in December, Liberia could begin negotiations on a second Compact in early 2026, with funding potentially available the following year.
As the December Board meeting approaches, Liberia’s focus will be on strengthening governance reforms, demonstrating economic management capacity, and maintaining close engagement with MCC officials.
For many Liberians, the hope is that a second Compact will not only deliver infrastructure but also help lay the foundation for long-term economic transformation.
“We need this Compact,” said Monrovia-based entrepreneur James Kollie. “The first one helped with electricity, but we still have challenges. A new Compact should focus on supporting businesses, creating jobs, and making the economy stronger.”
As Liberia awaits the MCC Board’s decision in December, the government’s actions in the coming months—and the impression they leave on Washington—will be critical in shaping the outcome.
