In a large bowl, add warm water, yeast, evaporated milk, salt, and sugar. Set aside for 5 minutes, then add the egg.
Then add 3½ cups flour, butter, cardamom, nutmeg, and grated coconut. Mix by hand or in a stand mixer.
Turn dough on a lightly floured surface. Knead until all the ingredients have been fully incorporated and the dough is no longer sticky when touched. Gradually add the remaining flour if needed (it's better to use less flour than more). Mix dough until smooth, 1-2 minutes.
Place the dough in a greased bowl, turning once to coat. Cover loosely with a clean cloth and let rise in a warm, draft-free place for an hour or two or until doubled in size.
Roll the dough out to 1-inch thick. Cut into bite-size squares or desired shapes.
Preheat the oven to 375°F (190℃). Line baking sheets with foil and coat with cooking spray or oil. Place the mandazi on the baking sheet and bake for 10-12 minutes or until a beautiful golden brown.
Remove from the oven and let them rest. If desired, sprinkle them with powdered sugar to make them sweeter.