Sierra Leone’s ambitious plan to transform its electricity sector is now in jeopardy following the U.S. government’s decision to dismantle the Millennium Challenge Corporation (MCC), a key development agency that recently committed $480 million to the country.
In September 2024, Sierra Leone and the MCC signed a five-year compact aimed at expanding access to affordable and reliable electricity for 4.6 million people. The agreement focused on three major projects: upgrading the national transmission network, improving electricity distribution and access, and reforming the power sector to enhance financial stability and attract private investment.
However, the Trump administration’s recent move to shut down the MCC has cast serious doubt on the future of this compact.
Employees of MCC were informed via email that they were being offered early retirement or deferred resignation, following a review by the Department of Government Efficiency (DOGE), led by Elon Musk. The review signaled steep staff reductions and a significant scaling back of MCC’s global operations.
This development is particularly concerning for Sierra Leone, which has been one of the key beneficiaries of MCC aid. The country has worked closely with the agency in recent years to implement reforms and qualify for infrastructure and energy investments through the MCC Compact program. As one of the few African nations selected based on performance in good governance, economic freedom, and investment in people, Sierra Leone’s inclusion was a milestone in its post-war recovery and economic development strategy.
The potential loss of this funding threatens to derail Sierra Leone’s efforts to address its chronic electricity shortages, which have long hindered economic growth and development. Currently, only about 30% of the population has access to electricity, with rural access dropping below 5%.
The MCC’s compact was not just a financial investment but also a vote of confidence in Sierra Leone’s commitment to reform and good governance. The agreement followed a previous $44.4 million threshold program that supported policy and institutional reforms in the water and electricity sectors.
Established in 2004 by President George W. Bush, the MCC has operated with bipartisan support and a $1 billion annual budget. Unlike traditional aid models, it provides grants directly to national governments for carefully vetted projects. MCC’s model had gained global respect for avoiding the pitfalls of debt-driven development, particularly as a counterweight to China’s growing influence in Africa.
The Trump administration’s recent 90-day freeze on foreign aid had already slowed progress on 20 active MCC projects. While five major infrastructure initiatives — including a controversial road and power transmission project in Nepal — were granted waivers to continue, Sierra Leone’s anticipated Compact agreement was left in limbo.
Critics have slammed the administration’s move to dismantle the agency. Nancy Lee, a former deputy CEO of MCC, said the corporation is “the only aid agency in the world that targets poor countries with good policies… Why destroy a model that has a 20-year track record of success?”
For Sierra Leone, the consequences are more than symbolic. The loss of MCC support could stall vital reforms, limit infrastructure development, and increase vulnerability to competing global interests, just as the country works to deepen democracy and fight poverty.
The dismantling of the MCC could have far-reaching implications for Sierra Leone’s development trajectory, undermining years of progress and potentially leaving millions without the promise of improved energy access.
