WASHINGTON, D.C. – The Trump administration has ordered the closure of the Millennium Challenge Corporation (MCC), a U.S. government agency that has invested billions in infrastructure projects across Africa and other developing regions in exchange for good governance.
The decision marks a significant retreat from the U.S.’s role in promoting development in sub-Saharan Africa and has left major ongoing projects in limbo.
The closure of the MCC comes as part of broader efforts to reduce U.S. government spending on international development aid, which Trump has previously criticized for not directly benefiting the U.S.
The MCC, founded in 2004 under President George W. Bush, had bipartisan support and was designed to encourage economic transparency and good governance in developing countries.
Since its inception, the MCC has invested approximately $17 billion in projects ranging from road construction to modernizing electricity grids.
An MCC executive informed staff on Wednesday that the agency would “come to an orderly close,” with all programs worldwide to be discontinued.
A staff memo, confirmed that Elon Musk’s Department of Government Efficiency imposed a significant reduction at the MCC, which will result in widespread layoffs.
The shutdown was part of broader efforts by the Trump administration to curtail U.S. involvement in international development, following the earlier closure of the U.S. Agency for International Development (USAID).
The MCC’s focus differed from that of traditional humanitarian aid agencies like USAID, with a primary emphasis on building infrastructure that creates a favorable environment for private-sector investment in developing economies.
According to an MCC employee, this approach “puts America first” by fostering economic growth that benefits both the U.S. and the recipient countries.
However, critics argue that the closure of MCC undercuts U.S. influence in Africa, especially in light of China’s growing dominance in the region.
Chinese President Xi Jinping recently pledged an additional $51 billion for infrastructure investments in Africa over the next three years as part of China’s Belt and Road Initiative (BRI), which the U.S. sees as a direct challenge to its geopolitical interests.
The U.S. under President Joe Biden has acknowledged it cannot match China’s large-scale infrastructure investments but has argued that it can offer a more sustainable model.
The MCC’s shutdown further cedes ground to China, which has been heavily involved in infrastructure development in African countries, from building roads to constructing hospitals and power grids.
One of the most high-profile MCC projects, a $500 million initiative in Nepal, aims to improve roads and increase cross-border electricity trading with India.
Similarly, the $600 million initiative in Senegal has focused on ramping up electricity access in rural areas.
Despite these significant ongoing projects, the MCC will begin notifying recipient countries on Friday that their agreements will be terminated within 40 days.
Extensions have been granted for projects in Ivory Coast, Mongolia, Nepal, and Senegal, but these are temporary, and the agency is still working to ensure construction sites are safe before its final departure.
Elizabeth Hoffman, Executive Director for North America at the anti-poverty group ONE, voiced concern about the decision, calling MCC’s approach to development innovative and effective.
“MCC brings an entrepreneurial approach to development assistance that holds governments accountable and effectively counters malign foreign influences like China,” she said.
The full impact of the MCC’s closure on ongoing projects and its long-term effects on U.S. influence in global development remain unclear.
The Trump administration did not immediately comment on the shutdown.
