World Bank approves $65m contribution for Madagascar

Antananarivo. The World Bank’s Board of executive directors Tuesday approved a $65 million grant for the public finance sustainability and investment development policy financing (DPF) operation that will support a series of reforms the Madagascar’s government is undertaking to strengthen its fiscal framework and the investment climate.

This operation supports the objectives of the country’s National Development Plan which aims at promoting development through inclusive and sustainable growth.

The Plan recognises the need to achieve short-term priority actions and structural reforms in response to the country’s fragility and persistent poverty.

This funding is meant to help create the fiscal space needed for some of the reforms being pursued by the government particularly in implementing its social sector development programs such as health, nutrition and education.

Service delivery and private investment will also receive much needed boost through programs targeted at enhancing the environment for investment and growth.

Reforms in public financial management, the electricity sub-sector, internal revenue structures including customs, the commercial justice system and banking will also be supported.

Even though Madagascar’s tax revenue collection is improving gradually, but at 10 percent of gross domestic product (GDP) in 2015, it remains one of the lowest in the world, according to Ms Coralie Gevers, the Bank’s country manager for Madagascar and Comoros.

She also said the DPF is the first of a two-year programmatic operation. The second year will aim to strengthen and deepen reforms in fiscal management and the investment climate, as part of continued efforts to support the government’s efforts to accelerate Madagascar’s recovery from the aftermaths of the long-running 2009-2014 crisis. (NMG)