International Monetary Fund (IMF) has approved the disbursement of $67.5m credit facility to aid Madagascar’s fight against poverty.
The credit facility according to the IMF is expected to help raise revenue and manage the country’s fiscal space to create investment opportunities.
It also called for the transparency of the country’s budgets, and accountability of its spending on COVID-19.
“The 40-month ECF arrangement was approved by the IMF Executive Board on March 29, 2021, with a total access of SDR 219.96 million (about US$312.4 at the time, or 90 percent of quota).
“The arrangement aims to support Madagascar’s recovery from the pandemic and revive the authorities’ reform momentum to raise and sustain growth and reduce poverty.
“Since the onset of the COVID-19 pandemic, Madagascar benefitted from two IMF Rapid Credit Facility (RCF) disbursements of SDR 122.2 million (about US$ 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, and received an SDR allocation of SDR 234.2 million (about US$ 322 million) in August 2021,” a statement on the IMF’s website said.
“Madagascar continues to be affected by the COVID-19 pandemic and is going through a severe cyclone season. After a contraction of GDP estimated at 7.1 percent in 2020, the recovery has been sluggish with growth estimated at 3.5 percent in 2021, in part reflecting a delayed reopening of the economy. Growth is projected to rebound more vigorously to 5.4 percent in 2022. Downside risks are high, as COVID-19 vaccination rates remain low, and Madagascar remains vulnerable to severe natural disasters.”
Madagascar was commended for its management of the funds gotten in 2021 as the IMF said its performance was satisfactory despite having to deal with COVID-19.
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