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IMF announces immediate disbursement of 43.5 mln USD for Madagascar

Xinhua, July 30, 2016 Adjust font size:

The executive board of the International Monetary Fund (IMF) announced the immediate disbursement of 43.5 million U.S. dollar for Madagascar in the framework of Extended Credit Facility (ECF) arrangement, a statement received Friday from IMF office here said.

"The IMF executive board approved 304.7 million U.S. dollar under a 40-month ECF arrangement for Madagascar, to help reinforce macroeconomic stability and boost sustainable and inclusive growth", the statement said following the decision taken in IMF headquarter in Washington on Wednesday.

"Following the Board's decision, 43.5 million U.S. dollar is available for immediate disbursement; the remaining amount will be available in phases over the duration of the program, subject to semi-annual reviews," the statement said.

The ECF is aimed at reinforcing macroeconomic stability and promoting sustainable and inclusive growth in beneficiary countries.

Through the ECF, IMF plans to boost prospects for inclusive growth through improved access to education, health care, and social protection combined with enhanced infrastructure and private sector development in Madagascar.

IMF wants with its ECF to create also fiscal space through improved revenue generation and spending prioritization. It plans to reinforce economic governance in Madagascar by strengthening public financial management and intensifying anti-corruption measures.

It also wants to strengthen macroeconomic stability by bolstering central bank operations and financial supervision in Madagascar.

However, IMF asks some reform from Madagascar to unlock the remaining of the fund.

"The central bank has been strengthened by increased legal independence and growing international reserves. The authorities should remain vigilant about maintaining price stability, and continue to improve the operational framework for monetary policy implementation, including by establishing a well-functioning money market," IMF ordered Madagascar to do so if it wants the continuation of the program.

IMF also asked Madagascar to invest more in infrastructure, facilitate access to education and health care, increase tax revenue, reduce lower-priority spending, and stop the subvention to the state-owned enterprises, such as Madagascar electricity and water state-owned company JIRAMA.

Madagascar became a member of the IMF on Sept. 25, 1963, and has an IMF quota of 122.2 million special drawing right (SDR).

The country's GDP growth is now estimated at 3.1 percent in 2015, which is slightly lower than that in 2014.

It remains among the poorest countries in the world, with a gross national income per capita of 440 dollar and 92 percent of people live with less than 2 dollar per day. Enditem