The Trump administration on Wednesday announced the abrupt closure of the Millennium Challenge Corporation (MCC), a prominent US foreign aid agency that has invested billions in infrastructure projects across Africa and other developing regions in exchange for commitments to good governance.
The decision, revealed in an internal staff meeting and confirmed in a memo obtained by AFP, signals a major policy shift with global implications.
MCC, established in 2004 under former President George W. Bush with bipartisan support, has invested $17 billion in projects ranging from road to electricity grid upgrades, and has been widely regarded as a strategic counterbalance to China’s growing influence in the developing world.
An MCC employee present at the meeting confirmed that staffs were informed of “orderly closure” of the agency’s global operations. The decision follows budget cuts mandated by the newly formed Department of Government Efficiency, led by billionaire Elon Musk, which has initiated a sweeping reorganisation of several federal agencies.
The majority of MCC staff will be laid off, and ongoing international projects are set to wind down, barring intervention from partner governments or other development institutions. The agency is expected to formally notify recipient countries on Friday, with all existing compacts scheduled to terminate within 40 days.
Exceptions have reportedly been made for four countries — Ivory Coast, Mongolia, Nepal, and Senegal — where limited extensions have been granted.
In these nations, MCC will have between one to three months to secure construction sites and ensure safety for local communities. A longer timeline has been allowed for Ivory Coast, where infrastructure development is near completion.
One staffer, speaking anonymously to AFP, stressed the agency’s distinct role compared to other aid programmes such as USAID, which was also shuttered under Trump’s presidency. “We’re not about humanitarian aid or social justice. MCC fosters environments for private-sector investment. It’s infrastructure with accountability,” she said.
Observers have expressed concern that the closure will create a vacuum in key regions already grappling with instability, especially as China deepens its financial footprint. In September, Chinese President Xi Jinping pledged an additional $51 billion in African investments over three years.
Just months ago, the United States signed a $500 million compact with Zambia to modernise transport, irrigation, and energy systems. Senegal and Nepalwere also beneficiaries of major MCC grants, with projects aimed at expanding electricity access and improving cross-border infrastructure.
Critics argue that dismantling MCC runs counter to US strategic interests. “If the US is serious about competing with China, shuttering the MCC sends the opposite message,” said Elizabeth Hoffman, Executive Director for North America at ONE, the anti-poverty organisation co-founded by Bono.
The Trump administration and MCC leadership have yet to publicly comment on the closure, first reported by development news site Devex.
