## IMF Executive Board Approves an Additional US$171.9 Million Disbursement Under the RCF to Madagascar to Address the COVID-19 Pandemic _IMF News, July 30, 2020_ ## Source details **Canonical URL:** [IMF Executive Board Approves an Additional US$171.9 Million Disbursement Under the RCF to Madagascar to Address the COVID-19 Pandemic](https://www.imf.org/en/news/articles/2020/07/30/pr20275-madagascar-imf-execboard-approves-us-171-9m-disburse-under-rcf-address-covid19) ## Other formats - [Markdown version](/en/news/articles/2020/07/30/pr20275-madagascar-imf-execboard-approves-us-171-9m-disburse-under-rcf-address-covid19/index.md) - [Structured JSON version](/en/news/articles/2020/07/30/pr20275-madagascar-imf-execboard-approves-us-171-9m-disburse-under-rcf-address-covid19/index.json) - [Bundle manifest](/en/news/articles/2020/07/30/pr20275-madagascar-imf-execboard-approves-us-171-9m-disburse-under-rcf-address-covid19/bundle-manifest.json) ## Bibliographic details - Published: July 30, 2020 --- ### Disbursement details - Disbursement amount approved: US$171.9 million (SDR122.2 million, 50 percent of quota). - This is the second emergency disbursement under the Rapid Credit Facility (RCF). - First disbursement: US$ 165.99 million approved on April 3, 2020. - Total IMF COVID-19 emergency support to the Republic of Madagascar after this disbursement: US$337.9 million. - The second disbursement was enabled by: - IMF Executive Board decision to double the annual access limit under the RCF to 100 percent of quota. - IMF Executive Board decision on a temporary modification to the Fund’s annual PRGT access limits. ### Macroeconomic outlook and financing needs - GDP projection for 2020: contract by 1 percent. - Estimated financing gap arising from the pandemic: about US$580 million. - Drivers of the weakened outlook: weaker external demand, increased spread of the pandemic, significant losses of revenue, and deepening impact of the COVID-19 pandemic. - Fiscal effects: additional revenue losses and redirecting budget resources to address critical spending, including increased social assistance to the most vulnerable. ### Use of funds and conditional commitments - Purpose of RCF resources: - Finance urgent balance of payments and fiscal needs. - Finance health and economic relief spending under the government’s national contingency plan to fight the pandemic. - Support spending on health and social protection, and to support the most vulnerable. - Catalyze additional donor resources. - Authorities’ commitments: - Transparency and accountability to ensure RCF resources are used appropriately and for their intended purpose. - Publication of procurement contracts related to the response to the pandemic. - Post-crisis audits. ### Executive Board statement (Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair) - Key points from the statement: - The COVID-19 pandemic continues to severely affect key sectors of Madagascar’s economy, including tourism and export-oriented manufacturing, further weakening the macroeconomic outlook. - Growth is projected to be negative in 2020 and urgent balance of payments needs arising from the pandemic have increased. - Additional emergency support under the RCF is expected to help finance health and economic relief spending, and continue to catalyze donor support. - In the context of a high degree of uncertainty, more support may be needed to ease the adjustment burden. - The authorities’ decision to apply for the Debt Service Suspension Initiative supported by the G-20 and Paris Club, and use of the released resources to finance spending on COVID-19 related health and economic relief, is welcome. - The authorities are implementing measures to address the humanitarian and economic impact of the pandemic while preserving macroeconomic stability. Measures include: - Strengthening the health system and social protection. - Supporting the private sector. - Preserving the stability of the financial sector. - Maintaining the flexible exchange rate regime. - Madagascar’s risk of public debt distress remains moderate, but risks to the outlook are substantial, underscoring the importance of preserving fiscal sustainability once the crisis abates. - The authorities remain committed, beyond their immediate response to the crisis, to continue reforms needed toward higher, more inclusive, and sustainable growth. ### Practical/contact information (from release header) - Press Release No.: 20/275 - Date: July 30, 2020 - IMF Communications Department — Media Relations - Press officer: Lucie Mboto Fouda - Phone: +1 202 623-7100 - Email: MEDIA@IMF.org - Twitter: @IMFSpokesperson *Press Release No. 20/275, July 30, 2020 — IMF Communications Department.* --- ## References - [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg) - [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx) - [Republic of Madagascar and the IMF](http://www.imf.org/external/country/MDG/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [IMF Press Release No. 20/133](https://www.imf.org/en/News/Articles/2020/04/03/pr20133-madagascar-imf-executive-board-approves-disbursement-to-address-the-covid-19-pandemic) - [IMF Press Release No. 20/267](https://www.imf.org/en/News/Articles/2020/07/21/pr20267-imf-executive-board-approves-temporary-increase-annual-access-limits-financial-support) - [https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker) - [https://www.imf.org/external/NP/SEC/bc/eng/index.aspx](https://www.imf.org/external/NP/SEC/bc/eng/index.aspx) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2020/07/30/pr20275-madagascar-imf-execboard-approves-us-171-9m-disburse-under-rcf-address-covid19_