## IMF Executive Board Approves US$312.4 Million ECF Arrangement for Madagascar

_IMF News, March 29, 2021_

## Source details

**Canonical URL:** [IMF Executive Board Approves US$312.4 Million ECF Arrangement for Madagascar](https://www.imf.org/en/news/articles/2021/03/29/pr2191-madagascar-imf-executive-board-approves-ecf-arrangement)

## Other formats

- [Markdown version](/en/news/articles/2021/03/29/pr2191-madagascar-imf-executive-board-approves-ecf-arrangement/index.md)
- [Structured JSON version](/en/news/articles/2021/03/29/pr2191-madagascar-imf-executive-board-approves-ecf-arrangement/index.json)
- [Bundle manifest](/en/news/articles/2021/03/29/pr2191-madagascar-imf-executive-board-approves-ecf-arrangement/bundle-manifest.json)

## Bibliographic details
- Published: March 29, 2021

---

### Arrangement details
- The Executive Board approved a 40-month arrangement under the Extended Credit Facility (ECF) equivalent to SDR219.96 million (about US$312.4 million or 90 percent of quota) for Madagascar.
- The Board’s decision allows an immediate disbursement of SDR 48.88 million (about US$69.4 million).
- The ECF arrangement follows the Fund’s emergency support to Madagascar in April 2020 for SDR122.2 million (about US$165.99 million or 50 percent of quota), and in July 2020 for SDR122.2 million (about US$171.9 million or 50 percent of quota).
- The arrangement is expected to catalyze additional bilateral and multilateral financial support.

### Program objectives and reform focus
- Support the implementation of the authorities’ ambitious economic reform agenda to raise sustainable and inclusive growth and reduce poverty.
- Mitigate the economic impact of the COVID-19 pandemic, maintain macroeconomic stability, and revive reform momentum.
- Specific reform areas:
  - Rebuild and further strengthen fiscal space to allow for much needed investment and social spending through revenue mobilization and improving quality of spending.
  - Resume and advance structural reform and anti-corruption efforts and the governance agenda.
  - Strengthen the monetary policy framework and support financial stability while maintaining price stability with exchange rate flexibility.
  - Capacity development is highlighted as crucial for program success.
- Program design accounts for Madagascar’s fragilities, including high exposure to climate-related shocks.

### Debt management, transparency, and contingency planning (Authorities’ intentions as described)
- Madagascar remains at a moderate risk of debt distress; authorities plan a prudent debt management strategy that relies on concessional financing for scaling-up investment and improving investment management.
- Authorities envisage developing contingency plans and mitigating fiscal risks, including:
  - Addressing potential fuel pricing-related liabilities.
  - Implementing the public utility JIRAMA’s recovery plan with World Bank support.
  - Developing a disaster risk management strategy to assess and manage climate-related risks.
- Progress on COVID-19-related transparency commitments includes publishing information on pandemic mitigation spending and procurement contracts; further strengthening of budget transparency and implementation of remaining transparency commitments is ongoing.
- To improve the business environment and attract private investment, authorities are committed to fully implementing the anti-corruption legal framework.
- Plans to continue improving the monetary policy framework, developing and strengthening the financial sector, and boosting financial inclusion.

### Selected Economic Indicators, 2019–23 (Table 1) — national account, prices, money, public finance, external sector, and public debt
- National account and prices (percent change, unless otherwise indicated)
  - GDP at constant prices:
    - 2019: 4.4
    - 2020: -4.2
    - 2021 (Est.): 3.2
    - 2022 (Proj.): 5.0
    - 2023 (Proj.): 5.4
  - GDP deflator:
    - 2019: 5.6
    - 2020: 4.2
    - 2021 (Est.): 5.7
    - 2022 (Proj.): 6.0
  - Consumer prices (end of period):
    - 2019: 4.0
    - 2020: 4.6
    - 2021 (Est.): 5.8
- Money and credit
  - Broad money (M3) (Growth in percent of beginning of period money stock (M3)):
    - 2019: 7.3
    - 2020: 12.1
    - 2021 (Est.): 21.8
    - 2022 (Proj.): 10.4
    - 2023 (Proj.): 10.9
  - Net foreign assets:
    - 2019: -2.6
    - 2020: 2.1
    - 2021 (Est.): 2.2
    - 2022 (Proj.): 3.1
  - Net domestic assets:
    - 2019: 9.9
    - 2020: 10.0
    - 2021 (Est.): 19.6
    - 2022 (Proj.): 5.5
  - of which: Credit to the private sector:
    - 2019: 10.3
    - 2020: 8.0
    - 2021 (Est.): 4.5
    - 2022 (Proj.): 4.9
- Public finance (percent of GDP)
  - Total revenue (excluding grants):
    - 2019: 10.5
    - 2020: 9.2
    - 2021 (Est.): 11.4
    - 2022 (Proj.): 12.2
  - of which: Tax revenue:
    - 2019: 8.9
    - 2020: 11.1
    - 2021 (Est.): 11.9
  - Grants:
    - 2019: 3.0
    - 2020: 1.8
    - 2021 (Est.): 2.3
    - 2022 (Proj.): 1.3
  - of which: budget grants:
    - 2019: 0.7
    - 2020: 0.8
    - 2021 (Est.): 0.5
    - 2022 (Proj.): 0.3
  - Total expenditures:
    - 2019: 14.9
    - 2020: 15.1
    - 2021 (Est.): 18.3
    - 2022 (Proj.): 18.1
    - 2023 (Proj.): 17.8
  - Current expenditure:
    - 2019: 9.3
    - 2020: 9.5
    - 2021 (Est.): 10.7
  - Capital expenditure:
    - 2019: 7.6
    - 2020: 8.6
  - Overall balance (commitment basis):
    - 2019: -1.4
    - 2020: -5.8
    - 2021 (Est.): -4.8
    - 2022 (Proj.): -4.3
  - Domestic primary balance1:
    - 2019: -2.5
    - 2020: -0.4
    - 2021 (Est.): 0.2
  - Total financing:
    - 2019: 2.9
    - 2020: 6.6
    - 2021 (Est.): 4.1
    - 2022 (Proj.): 3.9
  - Foreign borrowing (net):
    - 2019: 1.2
    - 2020: 1.4
    - 2021 (Est.): 3.6
    - 2022 (Proj.): 3.5
    - 2023 (Proj.): 3.3
  - Domestic financing:
    - 2019: 0.0
    - 2020: 1.5
    - 2021 (Est.): 0.6
  - Financing gap:
    - 2019: -0.7
- Savings and investment
  - Investment:
    - 2019: 20.6
    - 2020: 18.4
    - 2021 (Est.): 22.2
  - Gross national savings:
    - 2019: 19.8
    - 2020: 8.5
    - 2021 (Est.): 13.4
    - 2022 (Proj.): 16.2
- External sector
  - Exports of goods, f.o.b.:
    - 2019: 18.0
    - 2020: 14.0
    - 2021 (Est.): 16.5
    - 2022 (Proj.): 19.1
  - Imports of goods, c.i.f.:
    - 2019: 26.2
    - 2020: 22.8
    - 2021 (Est.): 25.2
    - 2022 (Proj.): 27.7
  - Current account balance (exc. grants):
    - 2019: -5.3
    - 2020: -9.6
    - 2021 (Est.): -7.2
    - 2022 (Proj.): -6.2
    - 2023 (Proj.): -5.7
  - Current account balance (inc. grants):
    - 2019: -2.2
    - 2020: -6.5
    - 2021 (Est.): -5.0
    - 2022 (Proj.): -4.4
- Public debt (percent of GDP)
  - Public debt:
    - 2019: 37.8
    - 2020: 43.6
    - 2021 (Est.): 46.9
    - 2022 (Proj.): 47.8
    - 2023 (Proj.): 48.6
  - External Public Debt:
    - 2019: 26.6
    - 2020: 32.0
    - 2021 (Est.): 34.7
    - 2022 (Proj.): 36.1
    - 2023 (Proj.): 37.3
  - Domestic Public Debt:
    - 2019: 11.2
    - 2020: 11.6
    - 2021 (Est.): 11.7
    - 2022 (Proj.): 11.3
- Other indicators
  - Gross official reserves (millions of SDRs):
    - 2019: 1196
    - 2020: 1338
    - 2021 (Est.): 1449
    - 2022 (Proj.): 1540
    - 2023 (Proj.): 1680
  - Months of imports of goods and services:
    - 2019: 5.9
    - 2020: 5.1
  - GDP per capita (U.S. dollars):
    - 2019: 540
    - 2020: 502
    - 2021 (Est.): 521
    - 2022 (Proj.): 551
    - 2023 (Proj.): 582

### Executive Director statement highlights (Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair)
- The COVID-19 pandemic continues to take a severe human and economic toll on Madagascar, reversing recent social and economic progress, and creating fiscal and external financing needs.
- The authorities’ program will focus on supporting the economic recovery and implementing structural reforms to increase sustainable and inclusive growth that reduces poverty.
- Authorities are implementing measures to create fiscal space for much needed social spending and investment, including medium-term revenue mobilization efforts and improving the quality of public spending.
- Authorities plan to follow a prudent debt management strategy, develop contingency plans, and mitigate fiscal risks.
- Authorities have made progress on COVID-19-related transparency commitments and are working to further strengthen budget transparency and implement remaining transparency commitments.
- To improve the business environment and attract private investment, authorities are committed to fully implementing the anti-corruption legal framework and to continue improving the monetary policy framework and financial sector development.

*IMF Communications Department; Press Release No. 21/91; March 29, 2021.*

---


## 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)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/03/29/pr2191-madagascar-imf-executive-board-approves-ecf-arrangement_