The administration of United States President Donald Trump has ordered the closure of the Millennium Challenge Corporation (MCC), a U.S. agency that funds billions in development projects, primarily in Africa, including Lesotho, Newsday has learned.
The decision follows a directive from the State Efficiency Department (DOGE), led by Elon Musk, which announced a significant “reduction” in the number of the agency’s programme staff.
“DOGE came in and shut it down. Our colleagues found out last night. Everyone is shocked. We were not expecting this,” sources told this publication yesterday.
The closure comes less than three months after the Millennium Challenge Account (MCA)-Lesotho II instructed contractors on February 1, 2025, to halt work on the $300 million Lesotho Health and Horticulture Compact.
MCA-Lesotho II cited a U.S. government review of foreign aid programs for “programmatic efficiency and alignment with U.S. foreign policy.”
“Accordingly, effective from1 February 2025, please cease to perform any work under or related to your contract until further notice. In addition, you should take all reasonable steps to minimise incurring costs allocable to your contract,” said Limpho Maema, deputy CEO of MCA-Lesotho II.
Maema noted that an update, potentially resuming work, extending the stoppage, or canceling the project, would be provided by April 20, 2025. “We understand this work stoppage may have operational implications and we thank you for your understanding,” she said.
When contacted yesterday, Maema said MCA-Lesotho had not received formal notice of MCC’s closure. Efforts to obtain comment from Lesotho’s Finance Minister, Dr Retšelisitsoe Matlanyane, and Minister of Foreign Affairs and International Relations, Lejone Mpotjoane, were unsuccessful, as both were unreachable by phone.
MCA-Lesotho II is an independent entity established to implement the Lesotho Health and Horticulture Compact, a $322 million initiative funded by the Millennium Challenge Corporation (MCC), an independent U.S. government development agency.
MCC was founded in 2004 to reduce global poverty through economic growth by providing time-limited grants that pair infrastructure investments with policy and institutional reforms. These grants are awarded to countries that demonstrate strong governance, a commitment to fighting corruption, and respect for democratic rights.
In April last year, MCC, represented by its Deputy Chief Executive Officer Chidi Blyden, celebrated the official launch of the Compact in Lesotho. The initiative consists of a $300 million investment from MCC, complemented by an additional $22 million from the Government of Lesotho. The Compact aims to improve access to quality healthcare, create equitable opportunities for business development, and promote high-value crop production.
“Additionally, the Compact seeks to boost profits and formal employment, and provide women and youth with skills training, business development opportunities, and improved legal protections in land tenure,” MCC stated.
At the launch event, Blyden highlighted the 20-year partnership between MCC and Lesotho, commending the government’s dedication to achieving this milestone.
“Together, we will embark on the implementation phase of the Compact to achieve our shared vision of growing the Lesotho economy with a healthy workforce and sustainable jobs,” she said.
During her three-day visit, Blyden met with Prime Minister Sam Matekane, Deputy Prime Minister Nthomeng Majara, and Minister of Finance Dr. Retšelisitsoe Matlanyane to express appreciation for their support and recognise the government’s commitment to the program.
She also visited project sites and engaged with stakeholders in the health and agriculture sectors to better understand the program’s potential impact.
“We have just accomplished a major milestone that ushers in the implementation of the second compact funded by the Governments of Lesotho and the United States of America,” Prime Minister Matekane said.
“The job creation potential of the horticulture project alone is estimated at 4,000 jobs, not counting the indirect employment opportunities in packaging, logistics, cold chain operations, and processing.”
Three core projects
The Lesotho Health and Horticulture Compact comprises three major projects:
- Health Systems Strengthening Project
This project aims to improve primary healthcare services and standards of care, enhance financial and management systems in healthcare, and modernise health data systems in collaboration with the Ministry of Health.
- Market-Driven Irrigated Horticulture Project
Designed to increase rural incomes, this project will invest in climate-smart irrigation infrastructure and encourage partnerships between commercial and smallholder farmers. It also supports government reforms and capacity-building to promote inclusive, sustainable growth in the horticulture sector.
- Business Environment and Technical Assistance Project
This initiative seeks to boost profits for high-growth potential firms, especially those owned by women, youth, and entrepreneurs in rural areas. It targets key sectors such as agriculture, creative industries, manufacturing, and tourism, providing technical assistance, business development services, and access to finance. Grant funding will also support selected women- and youth-owned businesses in acquiring equipment, goods, and executing their business plans.
Building on past success
This new Compact builds on the achievements of MCC’s first $362.5 million Compact with Lesotho, which concluded in September 2013. That investment funded one of Lesotho’s largest infrastructure projects, the Metolong Dam, significantly expanding access to clean water.
It also improved healthcare access for an estimated 752,000 people by constructing and rehabilitating 138 health facilities and 14 outpatient departments, covering about 90 percent of the country’s health infrastructure.
These facilities now serve as a crucial platform for the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) to combat maternal health challenges, HIV/AIDS, tuberculosis, and other diseases, thereby mitigating their economic impacts on Lesotho.
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