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IMF approves SDR 31.43 mn to Madagascar for economic stability, sustainable growth

The Executive Board of the International Monetary Fund (IMF) today completed the third review under the Extended Credit Facility (ECF) Arrangement for Madagascar.


IMF 12 Jul 2018, 03:55 AM Madagascar
IMF approves SDR 31.43 mn to Madagascar for economic stability, sustainable growth
  • This arrangement aims to support the country’s efforts to reinforce macroeconomic stability and boost sustainable and inclusive growth. (Image Credit: Reuters)

The Executive Board of the International Monetary Fund (IMF) today completed the third review under the Extended Credit Facility (ECF) Arrangement for Madagascar. The completion of this review enables the disbursement of SDR 31.43 million (about US$44.25 million), bringing total disbursements under the arrangement to SDR 156.26 million (about US$220.02 million).

Madagascar’s 40-month arrangement for SDR 220 million (about US$304.7 million, or 90 percent of Madagascar’s quota), was approved on July 27, 2016. Additional access of 12.5 percent of Madagascar’s quota was approved by the Executive Board on June 28, 2017, bringing Madagascar’s access under the ECF arrangement to SDR 250.55 million (about US$347.1 million) at that time.

This arrangement aims to support the country’s efforts to reinforce macroeconomic stability and boost sustainable and inclusive growth.

Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair said, "Madagascar’s performance under its economic program supported by the Extended Credit Facility arrangement has remained generally strong. Recent economic developments were favorable, and the structural reform agenda is advancing. The outlook also remains positive, with risks arising from higher oil prices, other terms of trade shocks and natural disasters."

He further added, “The authorities have continued to strengthen revenue mobilization and the quality of spending. A small, one-off reduction in the primary domestic fiscal surplus is appropriate for 2018, considering higher oil prices and the need to address social pressures. Further action will be needed to improve the quality of spending, including increased investment capacity, automatic fuel price adjustments, and sustained reforms of the public utility company (JIRAMA) to reduce its need for transfers. New tax incentives for investment should be carefully managed to safeguard revenue mobilization. These efforts will create fiscal space for high-priority investment and social spending which are central to the strategy for growth and poverty reduction."