June 14, 2021

Madagascar to receive US$86 Million disbursement from the IMF

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After completing the first review of Madagascar’s economic performance under a program supported by an Extended Credit Facility (ECF) arrangement, the IMF approved the authorities’ request to augment access under the program for US$42.39 million.


  • The program’s success hinges on building investment management capacity while safeguarding macroeconomic stability and debt sustainability.
  • Reforms underway to promote the development and soundness of the financial sector, based on the 2016 Financial Sector Assessment Program, will contribute to a
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    David Lipton

    more inclusive and robust financial system that is responsive to Madagascar’s development needs.

  • The authorities’ strategy to promote more inclusive and sustained economic growth by increasing investment in infrastructure and human capital, raising social spending, and advancing structural reforms is appropriate.

Mr. David Lipton, First Deputy Managing Director and Acting Chair said Madagascar’s performance under its economic program supported by the Extended Credit Facility (ECF) has been strong.

He said the authorities’ strategy to promote more inclusive and sustained economic growth by scaling up investment in infrastructure and human capital, raising social spending, and advancing structural reforms—as outlined in the National Development Plan—is appropriate. The program’s success hinges on building investment management capacity while safeguarding macroeconomic stability and debt sustainability.

“Recent developments—particularly a drought, a severe cyclone, and financial weaknesses in state-owned enterprises—have created challenges. Additional resources are needed for relief and reconstruction work, as well as to support the public utility company JIRAMA, whose performance suffered from the drought. While Air Madagascar’s recent strategic partnership is expected to strengthen its operations, it will also require a costly recapitalization to offset past losses,” he said.

madagascar-mapLipton, however, notes that although the authorities have acted to mitigate the impact of these challenges, a temporary increase in the fiscal deficit is reasonable, provided that the deep-rooted problems of JIRAMA and Air Madagascar are addressed.

“The authorities’ efforts to strengthen governance and fight corruption are critical to their strategy. In addition to reinforcing the legal framework, it is vital to implement it effectively and to enhance judicial independence. Ongoing improvements in public financial management, particularly to improve transparency, also play a key role,” he said.

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