{
  "title": "IMF Executive Board Completes First Review of the Extended Credit Facility Arrangement for the Republic of Madagascar, and Approves $67.5 Million Disbursement",
  "publication": "IMF News, March 7, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/03/07/pr2266-madagascar-imf-executive-board-completes-first-review-ecf-arrangement-approves-disbursement",
  "canonical": "https://www.imf.org/en/news/articles/2022/03/07/pr2266-madagascar-imf-executive-board-completes-first-review-ecf-arrangement-approves-disbursement",
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  "summary": "The Executive Board completed the first review of Madagascar’s economic program under the Extended Credit Facility (ECF) arrangement.",
  "publishDate": "2022-03-07",
  "sections": [
    {
      "heading": "Key decision and disbursement",
      "content": "- The Executive Board completed the first review of Madagascar’s economic program under the Extended Credit Facility (ECF) arrangement.\n- The completion enables the immediate disbursement of SDR 48.88 million (about US$ 67.5 million) to cover external and fiscal financing needs.\n- Total disbursements under the arrangement now amount to SDR 97.96 (about US$ 135 million)."
    },
    {
      "heading": "Program background and financing history",
      "content": "- The 40-month ECF arrangement was approved by the IMF Executive Board on March 29, 2021, with total access of SDR 219.96 million (about US$312.4 at the time, or 90 percent of quota).\n- The arrangement aims to support Madagascar’s recovery from the pandemic and revive reform momentum to raise and sustain growth and reduce poverty.\n- Since the onset of COVID-19, Madagascar received:\n  - Two IMF Rapid Credit Facility (RCF) disbursements of SDR 122.2 million (about US$ 165.99 million or 50 percent of quota) in April 2020 and SDR 122.2 million (about US$ 171.9 million or 50 percent of quota) in July 2020.\n  - An SDR allocation of SDR 234.2 million (about US$ 322 million) in August 2021."
    },
    {
      "heading": "Macroeconomic outlook and risks",
      "content": "- Recent performance and shocks:\n  - GDP contracted by 7.1 percent in 2020.\n  - Growth was estimated at 3.5 percent in 2021, reflecting a delayed reopening.\n  - Growth is projected to rebound to 5.4 percent in 2022.\n- Downside risks highlighted:\n  - COVID-19 vaccination rates remain low.\n  - Madagascar is vulnerable to severe natural disasters and is experiencing a severe cyclone season."
    },
    {
      "heading": "Executive Board and IMF recommendations / priorities",
      "content": "- Fiscal policy and revenue:\n  - Raise revenue and actively manage fiscal risks to create fiscal space for social spending and investment.\n  - The 2022 Budget includes measures to increase domestic revenue mobilization and create fiscal space for growth-enhancing spending.\n  - The authorities are implementing a gradual fiscal consolidation while boosting social and investment spending.\n- Debt management:\n  - Given Madagascar’s moderate risk of debt distress, follow a prudent debt management strategy that relies on grants and concessional financing for scaling-up investment.\n- Public financial management, transparency, and governance:\n  - Strengthen budget transparency and reporting.\n  - Address findings from four audit reports by the Cour des Comptes on the response to the COVID-19 pandemic.\n  - Prompt publication of an independent third-party audit of COVID-19-related public procurement contracts is important.\n  - Effective enforcement of the anti-corruption legal framework is necessary.\n- Social protection and fuel pricing:\n  - Prepare a timetable for the transition toward an automatic fuel pricing mechanism.\n  - Develop adequate social safety nets to protect the most vulnerable groups.\n- Public utilities and disaster risk management:\n  - Improve the financial situation of the public utility JIRAMA.\n  - Strengthen the disaster risk management system to address climate-related risks with technical assistance from the Fund.\n- Monetary and financial sector:\n  - Continue enhancing the monetary policy framework, protecting central bank autonomy, and fostering financial sector development and financial inclusion."
    },
    {
      "heading": "Selected economic indicators, 2019–24 (from Table 1)",
      "content": "- National account and prices (percent change; unless otherwise indicated)\n  - GDP at constant prices: 2019: 4.4; 2020: -7.1; 2021 Est.: 3.5; 2022 Proj.: 5.4; 2023 Proj.: 5.1; 2024 Proj.: 5.0\n  - GDP deflator: 2019: 6.5; 2020: 6.1; 2021: 6.9; 2022: 5.6\n  - Consumer prices (end of period): 2019: 4.0; 2020: 4.6; 2021: 6.2; 2022: 6.3; 2023: 5.9\n- Money and credit\n  - Broad money (M3) growth: 2019: 7.3; 2020: 12.1; 2021: 19.0; 2022: 16.5; 2023: 10.7; 2024: 13.3\n  - Net foreign assets (growth in percent of beginning-of-period money stock (M3)): 2019: -2.6; 2020: 2.1; 2021: 1.4; 2022: 7.9; 2023: -1.0; 2024: 3.8\n  - Net domestic assets: 2019: 9.9; 2020: 10.0; 2021: 17.6; 2022: 8.6; 2023: 11.7; 2024: 9.4\n  - Credit to the private sector: 2019: 10.3; 2020: 8.3; 2021: 8.1; 2022: 7.2\n- Public finance (percent of GDP)\n  - Total revenue (excluding grants): 2019: 10.8; 2020: 11.9; 2021: 12.5; 2022: 12.9\n  - Tax revenue: 2019: 10.6; 2020: 9.5; 2021: 10.4; 2022: 11.6; 2023: 12.2; 2024: 12.6\n  - Grants: 2019: 3.1; 2020: 2.5; 2021: 1.7; 2022: 2.0; 2023: 1.2\n  - Budget grants: 2019: 0.7; 2020: 0.9; 2021: 0.0; 2022: 0.3\n  - Total expenditures: 2019: 15.4; 2020: 16.3; 2021: 18.7; 2022: 19.7; 2023: 18.2; 2024: 17.9\n  - Current expenditure: 2019: 9.6; 2020: 11.4; 2021: 10.5; 2022: 10.1\n  - Capital expenditure: 2019: 5.8; 2020: 6.8; 2021: 7.4; 2022: 9.2; 2023: 8.2\n  - Overall balance (commitment basis): 2019: -1.4; 2020: -4.0; 2021: -6.3; 2022: -5.8; 2023: -3.8\n  - Domestic primary balance1: 2019: -1.9; 2020: -2.5; 2021: -0.9; 2022: 0.4\n  - Total financing: 2019: 1.3; 2020: 6.4; 2021: 4.1\n  - Foreign borrowing (net): 2019: 1.8; 2020: 3.6; 2021: 3.3; 2022: 2.6; 2023: 3.0\n  - Domestic financing: 2019: 2.9; 2020: 1.5; 2021: 1.0\n- Savings and investment\n  - Investment: 2019: 18.3; 2020: 15.0; 2021: 16.6; 2022: 19.3; 2023: 19.1; 2024: 19.4\n  - Gross national savings: 2019: 17.5; 2020: 11.2; 2021: 14.3; 2022: 14.5; 2023: 15.3\n- External sector (percent of GDP)\n  - Exports of goods, f.o.b.: 2019: 18.5; 2020: 18.9; 2021: 18.0\n  - Imports of goods, c.i.f.: 2019: 26.9; 2020: 24.3; 2021: 29.2; 2022: 27.3; 2023: 27.6\n  - Current account balance (exc. grants): 2019: -5.4; 2020: -7.9; 2021: -6.6; 2022: -5.3\n  - Current account balance (inc. grants): 2019: -2.3; 2020: -5.5; 2021: -5.0; 2022: -4.6; 2023: -4.1\n- Public debt (percent of GDP)\n  - Public debt: 2019: 38.5; 2020: 49.0; 2021: 53.1; 2022: 52.9; 2023: 52.0; 2024: 51.9\n  - External Public Debt: 2019: 27.0; 2020: 36.7; 2021: 41.4; 2022: 41.9; 2023: 41.2; 2024: 41.3\n  - Domestic Public Debt: 2019: 11.5; 2020: 12.3; 2021: 11.0\n- Reserves and welfare\n  - Gross official reserves (millions of SDRs): 2019: 1196; 2020: 1338; 2021: 1633; 2022: 1723; 2023: 1665; 2024: 1754\n  - Months of imports of goods and services: 2019: 4.2; 2020: 6.0; 2021: 5.7\n  - GDP per capita (U.S. dollars): 2019: 512; 2020: 457; 2021: 502; 2022: 525; 2023: 565; 2024: 592\n\nSource: IMF Press Release No. 22/66 (March 7, 2022).\n\n---\n\n\n References\n\n- https://www.imf.org/en/about/senior-officials/bios/antoinette-monsio-sayeh\n- PRESS CENTER\n- approved by the IMF Executive Board on March 29, 2021\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/03/07/pr2266-madagascar-imf-executive-board-completes-first-review-ecf-arrangement-approves-disbursement"
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    "Published: March 7, 2022",
    "The Executive Board completed the first review of Madagascar’s economic program under the Extended Credit Facility (ECF) arrangement.",
    "The completion enables the immediate disbursement of SDR 48.88 million (about US$ 67.5 million) to cover external and fiscal financing needs.",
    "Total disbursements under the arrangement now amount to SDR 97.96 (about US$ 135 million).",
    "The 40-month ECF arrangement was approved by the IMF Executive Board on March 29, 2021, with total access of SDR 219.96 million (about US$312.4 at the time, or 90 percent of quota).",
    "The arrangement aims to support Madagascar’s recovery from the pandemic and revive reform momentum to raise and sustain growth and reduce poverty.",
    "Since the onset of COVID-19, Madagascar received:",
    "Recent performance and shocks:",
    "Downside risks highlighted:",
    "Fiscal policy and revenue:",
    "Debt management:",
    "Public financial management, transparency, and governance:",
    "Social protection and fuel pricing:",
    "Public utilities and disaster risk management:",
    "Monetary and financial sector:",
    "National account and prices (percent change; unless otherwise indicated)",
    "Money and credit",
    "Public finance (percent of GDP)",
    "Savings and investment",
    "External sector (percent of GDP)",
    "Public debt (percent of GDP)",
    "Reserves and welfare",
    "[https://www.imf.org/en/about/senior-officials/bios/antoinette-monsio-sayeh](https://www.imf.org/en/about/senior-officials/bios/antoinette-monsio-sayeh)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[approved by the IMF Executive Board on March 29, 2021](https://www.imf.org/en/News/Articles/2021/03/29/pr2191-madagascar-imf-executive-board-approves-ecf-arrangement)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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