On July 26, the Executive Board of the International Monetary Fund (IMF)
completed the fifth review under the Extended Credit Facility (ECF)
Arrangement for Madagascar. The completion of this review enables the
disbursement of SDR 31.428 million (about US$43.7 million), bringing total
disbursements under the arrangement to SDR 219.12 million (about US$304.5
million).
Madagascar’s 40-month arrangement for SDR 220 million (about US$305
million, or 90 percent of Madagascar’s quota) was approved on July 27, 2016
(see
Press Release No.16/370
). Additional access of 12.5 percent of Madagascar’s quota was approved by
the Executive Board in June 28, 2017, bringing Madagascar’s access to SDR
250.55 million (about US$347 million) at that time. This arrangement aims
to support the country’s efforts to reinforce macroeconomic stability and
boost sustained and inclusive growth.
Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy
Managing Director and Acting Chair, made the following statement:
“Madagascar’s performance under its economic program supported by the
Extended Credit Facility (ECF) arrangement has remained generally strong.
Growth has been solid, inflation has been moderate, and the external
position has remained robust. Going forward, the authorities’ continued
commitment to strong policies and an ambitious structural reform agenda
will be key to mitigating internal and external risks, strengthening
macroeconomic stability, and achieving higher, sustainable, and inclusive
growth.
“The authorities’ economic reform agenda requires continued efforts to
enhance investment capacity, essential for scaling up priority investment
spending. Increasing social spending, as planned in the revised budget law,
and developing social safety nets is also crucial. Further enhancing
revenue mobilization through tax collection is central to this strategy and
warrants renewed efforts to avoid eroding the tax base.
“Resolute actions are needed to contain risks to macroeconomic stability
and debt sustainability, including fiscal risks from the financial
situation of JIRAMA, the sustainability of the civil servant pension fund,
and liabilities to the fuel distributors. On the latter, the recent
progress towards the implementation of an automatic fuel pricing mechanism
while limiting its impact on the poorest is encouraging.
“The recent adoption of the law on illicit asset recovery brings the
anti-corruption legal framework into closer alignment with international
standards. The authorities should continue to build on these efforts.
Making further progress on modernizing public financial management and
improving the business climate will be essential to promote good
governance. Allocating sufficient human and financial resources will allow
for effective enforcement of this framework.
“The ongoing reform agenda should continue to benefit from IMF technical
assistance in various areas, such as fiscal policy, governance, and the
monetary and financial sectors.”
