Press Release: Statement by IMF Staff Mission to Madagascar

March 2, 2006

Press Release No. 06/42

Mr. Brian Ames, the International Monetary Fund's (IMF) mission chief for Madagascar, issued the following statement at the conclusion of discussions with Minister of Economy, Finance and Budget Benjamin Radavidson and Central Bank of Madagascar Governor Gaston Ravelojaona:

"Over the past two weeks, a visiting IMF mission held very constructive discussions with Minister Radavidson, Governor Ravelojaona, and other senior officials of the Government of the Republic of Madagascar. It also met with President Ravalomanana, Prime Minister Sylla, President of the Senate Rajemison Rakotomaharo, as well as representatives from the private sector, non-governmental organizations, and donor community. The mission found that good progress had been made in the areas of revenue collection, preparation of an action plan for the public utility JIRAMA, and implementation of the 2006 Finance Law consistent with the authorities' macroeconomic objectives. However, the significant spending overruns that occurred in 2005 underscored the deficiencies in public financial management with regard to controlling public expenditure, something that the authorities agreed needed to be addressed with urgency. The mission discussed a set of policies and conditions that could underpin a new arrangement under the Poverty Reduction and Growth Facility (PRGF)1 and reached understandings on the modalities for financing additional poverty-reducing spending with resources provided under the IMF's Multilateral Debt Relief Initiative (see Press Release No. 05/296). The mission has returned to Washington for further consultations.

"I would also like to announce that Samir Jahjah, the IMF Resident Representative to the Republic of Madagascar, has completed his tour of duty here. The new Resident Representative is Pierre van den Boogaerde, who has taken up his post in late February."

1 The PRGF is the IMF's concessional lending facility for low-income countries. PRGF loans carry an annual interest rate of 0.5 percent, and are repayable over 10 years with a 5½ -year grace period on principal payments.


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