Malawi Compact - Constraints Analysis

MCC’s evidence-based approach to its investments begins with a mutual understanding of a country’s main growth challenges. During the first phase of the compact or threshold program development process, MCC and the selected partner country, jointly conduct a constraints-to-growth analysis (CA). This analysis identifies the constraints to private investment and entrepreneurship that are most binding to economic growth in the country. The results of this analysis enable the country, together with MCC, to select activities most likely to contribute to sustainable, poverty-reducing growth.

The Constraints Analysis Report for the Malawi Compact highlights the following binding constraints to economic growth: power, international corridors, human capital, water and irrigation, and finance. The study further identifies other equally binding constraints, namely: an overvalued exchange rate, administrative barriers to trade and regular changes to trade rules.