IMF Staff Country Reports

This paper discusses Republic of Madagascar’s Fourth Review under the Extended Credit Facility Arrangement and Requests for a Waiver of Nonobservance of Performance Criteria and Modification of Performance Criteria. Madagascar’s growth has decelerated, and inflation remains high. Program performance remains mixed with a breach of the 2022 deficit target but progress on the structural reform agenda. The authorities have also adopted the necessary changes to the public procurement legal framework to allow for the collection and publication of ultimate beneficiary owner information and submitted a revised mining code in line with IMF staff recommendations to Parliament. The authorities are taking measures to adjust non-priority spending in the face of lower-than-expected revenue in 2023. It is proposed to relax the 2023 domestic primary deficit target to accommodate higher transfers to the electricity state-owned enterprises that reported record losses in 2022 and accumulated large arrears. Related modifications of other quantitative performance criteria are also proposed. Improvement in budget execution, transparency, and governance are critically needed to foster stronger and sustainable growth.