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The Millennium Challenge Corporation (MCC) Board of Directors has approved Zambia’s compact amounting to US$458 million, designed to spur inclusive economic growth in the agriculture and agro-processing sectors.
Approval of the Zambia Farm-to-Market Compact would enable MCC to partner with the government to address key constraints in the sector.
According to a statement issued in Lusaka on Friday, the compact would “lower the cost of transporting goods to markets, increase the availability of equipment for small and medium farmers and processors, and increase financing for infrastructure projects that support agriculture.”
The statement further highlighted that the compact would “catalyze reforms in the agriculture sector to attract greater private investment.”
The total budget includes $458 million from MCC and a $33.75 million contribution from the government of the Republic of Zambia.
In addition to the Zambia compact, the MCC Board unanimously endorsed the Fiscal Year (FY) 2025 Selection Criteria and Methodology Report (SCMR), which outlined the framework used to evaluate candidate countries’ policy performance.
“The FY 2025 SCMR was the product of consultations with the Board and engagements with a wide range of stakeholders over the past twenty years. The rigorous and transparent nature of MCC’s approach enjoys strong bi-partisan support,” the MCC said in its statement.
The Board also received an update on the agency’s portfolio and discussed the proposed Mauritania Threshold Programme, with MCC actively working with the Government of Mauritania on its design.
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The Zambia Farm-to-Market Compact aimed to resolve agricultural sector constraints through “a combination of investments in rural road infrastructure and maintenance; by increasing access to finance for irrigation, electricity, storage facilities, logistics and processing equipment and infrastructure for agriculture; and agricultural policy reform initiatives,” the MCC stated.
These investments, MCC added, would help Zambia “substantially diversify and grow its economy through greater private investment while reducing poverty.”
The compact includes four key projects: the Roads and Access Project, the Asset Finance Project, the Agriculture Policy Reform and Institutional Strengthening Project, and the American Catalyst Facility for Development Project.
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