The Millennium Challenge Corporation (MCC), a United States based independent foreign aid agency with over US$5.4 billion in active grants across 20 developing countries including Liberia, is on the verge of being shut down — maybe permanently.
The U.S. Department of Government Efficiency (DOGE) says it has begun the process of shutting the agency down.
The decision, which comes amid internal restructuring and political shifts in Washington, has sent shockwaves through partner nations — including Liberia — where MCC support has underpinned transformative infrastructure, energy, and governance reforms.
An internal MCC email obtained by POLITICO, a media outlet, confirmed that the agency is offering voluntary early retirement and deferred resignation programs to its 320 employees. Staff were instructed to express interest by April 29, with administrative leave for some employees expected as early as May 5. Leadership also revealed in a subsequent all-staff meeting that DOGE will present a resolution to MCC’s board to terminate all ongoing grants within the next several months.
“We understand from the DOGE team there will soon be a significant reduction in the number of MCC’s programs and relatedly the agency’s staff,” MCC’s acting CEO wrote in the email.
Founded in 2004 under President George W. Bush, the MCC was created as a results-driven alternative to traditional foreign aid, rewarding countries with good governance, sound economic policies, and a commitment to democratic values. It has consistently earned praise for transparency and effectiveness, topping global rankings by Publish What You Fund as the most transparent bilateral donor.
However, the agency’s closure — reportedly part of a wider DOGE effort to reduce the size and scope of U.S. foreign aid — marks a sharp departure from America’s long-standing bipartisan commitment to international development. DOGE, currently led by Elon Musk, has declined comment, but sources suggest the shutdown is not related to MCC’s performance, which has been described as “efficient, effective, and transparent.”
“Our agency has for the past 10 plus years had clean audits, and the reason we’re being closed, even according to the people from DOGE, has nothing to do with our agency being wasteful or corrupt,” one MCC employee told POLITICO, under condition of anonymity.
Among the countries most vulnerable to the fallout is Liberia, a nation that has worked closely with MCC for nearly a decade. In 2015, Liberia signed a $257 million Compact with MCC that focused on reforming the country’s electricity and road sectors — both critical to post-war recovery and economic revitalization.
That partnership led to the rehabilitation of the Mount Coffee Hydropower Plant, which effectively doubled Liberia’s power generation capacity and became a cornerstone of the country’s energy supply. The MCC Compact also provided crucial support for the Liberia Electricity Corporation to reduce losses and improve service delivery.
In addition, MCC funding helped Liberia establish a Road Asset Management System, which allowed the government to make more data-driven decisions regarding road construction and maintenance. It also strengthened key institutions such as the General Auditing Commission and the Public Procurement and Concessions Commission, both of which were vital in enhancing transparency and accountability in public financial management.
Though the Compact ended in 2021, Liberia remained eligible to apply for a second Compact and was engaged in discussions with MCC about renewed collaboration to address persistent challenges in infrastructure, governance, and energy access.
“Liberia’s Compact with MCC was a game-changer. It helped us lay the foundation for reliable power and better oversight,” said a former government official who worked with MCC. “Losing this partnership is like removing the scaffolding during a storm.”
The timing of the MCC shutdown could not be worse for Liberia. The country is struggling with economic instability, high youth unemployment, and rising public expectations under the newly elected administration. The absence of MCC’s evidence-based and results-driven model will leave a gap in both funding and accountability mechanisms that few donors can match.
“MCC’s closure is not just a loss of funding — it’s a loss of accountability,” an official of the government said. “It enforced standards. It ensured that projects had measurable impacts. That type of aid is rare.”
In addition to Liberia, several countries including Côte d’Ivoire, Senegal, Nepal, and Mongolia — all of which have ongoing MCC-funded programs — are now scrambling to secure temporary extensions to wind down their projects. Côte d’Ivoire has reportedly requested a four-month extension, while Senegal, Nepal, and Mongolia have asked for three-month wind-down periods.
Despite the global implications of the closure, the MCC board — which includes Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and four private-sector members — has yet to make any public comments. Congressional allies of MCC, including Sen. Jim Risch of Idaho, who recently introduced a bill to expand the agency’s mandate, have also remained silent on the sudden move.
Meanwhile, DOGE’s future remains uncertain following Elon Musk’s announcement that he plans to step back from his government role in light of Tesla’s poor first-quarter earnings. However, insiders suggest that DOGE’s deregulatory agenda will continue even in Musk’s absence.
In Liberia, officials and civil society leaders are now urging swift diplomatic engagement with the United States to salvage some form of transitional support. Without a second Compact or technical assistance, Liberia risks falling back into donor dependence or seeking assistance from less transparent partners, increasing the risk of mismanagement and poor governance.
“This shutdown cuts deep,” said a senior official at Liberia’s Ministry of Finance and Development Planning. “We need to engage our U.S. counterparts to protect the gains we’ve made. We simply can’t afford to lose MCC.”
In November, Liberia passed 11 out of 20 indicators in the MCC scorecard for 2025 Financial Year, marking a slight decline from the previous year’s 14.
Liberia’s MCC 2025 Scorecard reveals a mixed performance. While Liberia showcased successes in Land Rights, Employment Opportunities, Political Rights, Civil Liberties, Control of Corruption, Rule of Law, and Freedom of Information, these accomplishments were counterbalanced by shortcomings in Fiscal Policy, Inflation, Trade Policy, Government Effectiveness, Health Expenditures, and Natural Resource Protection, Girls’ Pri Edu Completion Rate, and Rule of Law.
Notably, the control of corruption indicator witnessed a 2% decline, meeting MCC’s standards but falling from last year’s score. The overall score dropped to 76%, compared to 79% in the previous year.
As the agency prepares for full closure within the next 90 days, Liberia and other MCC partner countries are left grappling with the uncertainty of losing one of the most respected and effective development partners in modern U.S. foreign aid history.
