IMF staff review progress of Madagascar’s economic programme

Antananarivo, Madagascar (PANA) – Despite the effects of a major cyclone early this year and drought on agriculture and hydro power, as well as an outbreak of the plague on tourism in Madagascar, the country’s economic conditions remain favourable, with sustained growth and macroeconomic stability, according to a team of the International Monetary Fund (IMF) that visited Antananarivo from 14 -28 March 2018.

“Growing export revenues from vanilla—boosted by high prices—and light manufactured goods led to a strong currency and created room for a substantial accumulation of foreign exchange reserves, which exceeded four months of imports at end-2017,” said the team after discussions with authorities in the country on the third review of Madagascar’s economic reform programme supported by the IMF’s three-year Extended Credit Facility (ECF).

The IMF Executive Board is expected to consider the third ECF review in June 2018. The Fund’s team said good progress was made during the discussions, and they will continue in the coming weeks.

“Staff urged the authorities to maintain the momentum of the programme to date. In particular, shifting from less productive public spending to investment and social spending is a core programme objective,” said Marshall Mills, IMF Mission Chief for Madagascar.

In a statement at the end of the mission, Mills said that Madagascar’s performance under the ECF-supported programme remains broadly satisfactory while growing export revenues from vanilla—boosted by high prices—and light manufactured goods led to a strong currency and created room for a substantial accumulation of foreign exchange reserves.

“Staff urged the authorities to maintain the momentum of the programme to date. In particular, shifting from less productive public spending to investment and social spending is a core program objective.

“In the context of discussions between the authorities and the fuel distributors on a new price structure, there were delays in adjusting pump prices to rising world prices, which led to the authorities accumulating liabilities to fuel distributors. Staff recommended that the authorities adjust pump prices gradually to align them with world market prices and to eliminate the liabilities by year end,” said the statement.

“On governance, IMF staff stressed the vital importance of enacting the asset recovery and Anti-Money Laundering laws submitted to parliament, to fight corruption and maintain good banking relationships internationally. It also remains important to follow through with implementation of the strengthened anti-corruption legislation, asset declaration framework, and improvements to public financial management,” it added.

The IMF  mission met with President Hery Rajaonarimampianina, Minister of Finance and Budget Vonintsalama Andriambololona, Minister of Economy and Plan Herilanto Raveloharison, Central Bank of Madagascar Governor Alain Rasolofondraibe, senior officials, as well as private sector representatives, and development partners.
-0- PANA AR 28March2018

28 Março 2018 20:43:52




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