IMF enables another disbursement of US$43.7 million for Madagascar

On July 26, the Executive Board of the International Monetary Fund (IMF) enables the disbursement of US$43.7 million, bringing total disbursements under the arrangement to US$304.5 million for Madagascar.

The Executive Board completed the fifth review under the Extended Credit Facility (ECF) Arrangement.

Following the Executive Board discussion, the Deputy Managing Director and Acting Chair, Mitsuhiro Furusawa, said Madagascar’s performance under its economic program supported by the Extended Credit Facility (ECF) arrangement has remained generally strong.

Madagascar’s 40-month arrangement for US$305 million, or 90 percent of Madagascar’s quota was approved on July 27, 2016. Additional access of 12.5 percent of Madagascar’s quota was approved by the Executive Board in June 28, 2017, bringing Madagascar’s access to SDR 250.55 million (about US$347 million) at that time. This arrangement aims to support the country’s efforts to reinforce macroeconomic stability and boost sustained and inclusive growth.

Furusawa said the country’s growth has been solid, inflation has been moderate, and the external position has remained robust. Going forward, the authorities’ continued commitment to strong policies and an ambitious structural reform agenda will be key to mitigating internal and external risks, strengthening macroeconomic stability, and achieving higher, sustainable, and inclusive growth.

He noted that the authorities’ economic reform agenda requires continued efforts to enhance investment capacity, essential for scaling up priority investment spending.

He said, “Increasing social spending, as planned in the revised budget law, and developing social safety nets is also crucial. Further enhancing revenue mobilization through tax collection is central to this strategy and warrants renewed efforts to avoid eroding the tax base.

“Resolute actions are needed to contain risks to macroeconomic stability and debt sustainability, including fiscal risks from the financial situation of JIRAMA, the sustainability of the civil servant pension fund, and liabilities to the fuel distributors. On the latter, the recent progress towards the implementation of an automatic fuel pricing mechanism while limiting its impact on the poorest is encouraging.

“The recent adoption of the law on illicit asset recovery brings the anti-corruption legal framework into closer alignment with international standards. The authorities should continue to build on these efforts. Making further progress on modernizing public financial management and improving the business climate will be essential to promote good governance. Allocating sufficient human and financial resources will allow for effective enforcement of this framework.

“The ongoing reform agenda should continue to benefit from IMF technical assistance in various areas, such as fiscal policy, governance, and the monetary and financial sectors.”

African Development Bank calls for urgent global response as second cyclone hits Southern Africa

The African Development Bank has called for urgent global action in the wake of a second cyclone to hit the southern Africa coastal region in six weeks.  According to Bank President, Akinwumi Adesina, “we must have concerted international cooperation to establish management systems and responses to combat natural disaster.”

Cyclone Kenneth is also the most extreme tropical tornado to hit Mozambique in the last 60 years, according to official records.

“Timely intervention of national, regional and international actors and stakeholders are crucial when disaster strikes. Increasingly, Africa’s ecological challenges will only be successfully tackled through the harmony of efforts and activities of continental and global institutions,” Adesina urged on Monday from the Bank’s Abidjan headquarters. 

Cyclone Kenneth ripped through Comoros and Mozambique last week and is likely to cause extreme flooding in areas where more than 70,000 people live, according to the country’s National Directorate for the Management of Water Resources.

On March 15, cyclone Idai began pounding Madagascar, Malawi, Mozambique, and Zimbabwe and impacted the livelihoods of more than 3 million people. The official death toll now stands at 1,007, with 602 killed in Mozambique, 344 in Zimbabwe, 60 in Malawi and one in Madagascar, according to relief agencies.

Infrastructural damage from Idai across Madagascar, Malawi, Mozambique, and Zimbabwe is estimated to be at least $1 billion.

“We are on the brink of an unprecedented humanitarian crisis. We need to brace up for post-cyclone flooding, landslides and disease outbreaks,” Adesina warned.

A high-level Bank delegation, led by Mateus Magala, Vice President for Corporate Services and Human Resources, has begun visiting the affected areas.

Speaking from Maputo, Mozambique’s capital, Magala said, “What we saw on the ground in Mozambique after Idai, and in camps housing internally displaced persons in the south of Malawi, shows that we need to focus on restoring the dignity of citizens and the economic stability of communities when disaster strikes.”

Other members of the Bank delegation include Patrick Zimpita, Executive Director for Malawi, Zambia, and Mauritius; Heinrich Gaomab II, Executive Director for Angola, Botswana, Mozambique, Namibia and Zimbabwe; and Kapil Kapoor, Director General, Southern Africa Regional Development and Business Delivery Office.

The Bank delegation is expected in Harare this week to meet with donor agencies and officials of the Government of Zimbabwe. They will also tour Chimanimani, Chipinge and Mutare districts in Manicaland Province which were most affected by cyclone Idai.

Statement by the President of the Commission on the electoral process in Madagascar

The Chairman of the African Union Commission, Moussa Faki Mahamat, takes note of the proclamation, December 27, 2018, by the Independent National Electoral Commission (CENI), provisional results of the second round of the presidential election in Madagascar, which took place on December 19, 2018.

Moussa Faki Mahamat, commends the Congolese Government for its swift and effective response

The President of the Commission congratulates the Acting President of the Republic of Madagascar, the Prime Minister and the Government, the High Constitutional Court (HCC), the CENI and its dismemberments, the defense and security forces, the organizations of society civil society and religious, as well as all other stakeholders, for their contribution to the success of the electoral process.He praises the maturity and civility of the Malagasy people, who once again demonstrated their deep commitment to peace, stability and democracy.

The President of the Commission calls on the two presidential candidates and their supporters to refrain from any act likely to disrupt the current process or cause unrest, pending the official announcement of the final results by the HCC. They must be fully aware of their historic responsibilities to the Malagasy people, as well as to Africa and the international community as a whole. He urges them to scrupulously respect the prerogatives of the CENI and the HCC with regard to the proclamation of the results. In case of disputes related to the conduct of the vote, they must make exclusive use of the legal channels provided for this purpose.

The President of the Commission reaffirms the commitment of the African Union to continue its action of accompaniment of the actors and the Malagasy people, with a view to the completion of the electoral process, as well as to support them in the domains of the governance and the socio-economic development. To this end, the African Union will continue to work in close coordination with the Southern African Development Community, the United Nations, the International Organization of La Francophonie, the Indian Ocean Commission and the European Union, as well as with other bilateral and multilateral partners in Madagascar. The President of the Commission welcomes the remarkable work done by the International Support Group in Madagascar (GIS-M) to facilitate the harmonization of the efforts of the various international actors,

The President of the Commission reiterates the importance attached to the success of this presidential election as a decisive qualitative step for the consolidation of democracy in Madagascar. It calls on the Malagasy people and all the institutions of the country to spare no effort to protect this new achievement in national unity, stability, security and peace.

Madagascar: GIS-M urges candidates to respect scrupulously the prerogatives of the CENI and HCC

Members of the International Support Group Madagascar (GIS-M) has urged both candidates to respect scrupulously the prerogatives of the CENI and HCC for announcing the results of the election and to stick exclusively to legal channels for the resolution of any litigation or dispute.

Political candidates urged to respect electoral bodies .Photo credit: The Economist

Presidential elections were held in Madagascar on 7 November. A second round involving Andry Rajoelina and Marc Ravalomanana was held on 19 December, both candidates declared themselves winners in the run-off which analysts warned was likely to draw claims of fraud.

The Group warned that the international community may have to take action as developments make necessary, reaffirmed the international community’s commitment to continue supporting the efforts of the Malagasy State, including on socioeconomic issues and governance in all its aspects, and based on the needs he has expressed and priorities it shall determine.

At the initiative of the African Union (AU), the GIS-M, as representatives of the international community as a whole, held a meeting in Antananarivo on 20 December 2018 to take stock of the developments in Madagascar following the 2nd round of the presidential election, and to agree on the modalities of the continued support of the international community.

The members noted with satisfaction the holding of the 2nd round of the presidential election, as scheduled, in conditions of transparency and regularity in the calm and peaceful manner throughout the territory and commended the Malagasy people for participating in the election and for the new democratic progress of the country.

Candidates and their supporters were also called upon to demonstrate a spirit of responsibility and commitment to the general interests of Madagascar and its people and to respect in all circumstances the laws and regulations and s’ refrain from any act that is likely to disrupt the current process or to cause disorders, and emphasized the special responsibility of the two candidates and their respective surroundings compared to the possible reaction of the population segments that support each of them and warn against any incitement, by commission or omission, has acts capable of undermining the security of persons and property.

The GIS-M agreed to continue to follow closely the developments of the situation and to undertake, towards the Malagasy parties of efforts to enforce them by the results of the presidential election as they have been established and set by the CENI and HCC and, in this context, agreed to continue to consult on the measures that may be needed to strengthen the authority of popular will as expressed December 19, 2018.

IMF Staff Reviews Progress of Madagascar’s Economic Program

A team from the International Monetary Fund (IMF) led by Marshall Mills, Mission Chief for Madagascar, visited Antananarivo and Toamasina on September 12-26, 2018.

The team held discussions with the authorities on the fourth review of Madagascar’s economic reform program supported by the IMF’s three-year Extended Credit Facility (ECF).

  • Economic growth is expected to exceed 5 percent this year, the highest in 10 years.
  • Containing lower priority spending and further boosting revenue remain essential to continue scaling up public investment and social spending.
  • Combating corruption remains critical to improving governance and avoiding a substantial economic impact.

At the end of the mission, Mr. Mills issued the following statement:

Madag flag“Economic conditions have continued to improve. Growth is expected to exceed 5 percent this year, the highest level in 10 years. This outcome is driven by a rebound in agricultural production, especially for rice, as well as growing public investment. Despite rising international oil prices, external developments have remained favorable, with a strong export performance underpinned by high prices and production for vanilla and mining. After peaking in late 2017, inflation has been falling steadily toward 7 percent by year-end. Raising living standards for the population will nevertheless require sustained and inclusive growth.

“The implementation of the ECF-supported program remains broadly satisfactory. All program targets for the first half of the year were met, except for a temporary shortfall in social spending. In particular, the Central Bank continued building up foreign exchange reserve buffers, which reached an all-time high. The budget was executed largely as planned. Progress also continues on the structural reform agenda, as exemplified by the opening of the first anti-corruption center.

Implementation of the ECF-supported program remains generally strong – IMF’s Mills

“Continuing the shift from less productive public spending to investment and social spending remains a core program objective. Delays in adjusting fuel pump price – in a context of rising world oil prices, social difficulties, and continuing discussions on the price structure – are leading to a significant, unfunded liability to distributors. Staff urged the authorities to minimize the impact on the budget and priority spending by progressively aligning pump prices with cost recovery and eliminating the liabilities as expeditiously as conditions permit. The authorities are considering measures to alleviate the impact of price adjustments on the most vulnerable. While the public utility, JIRAMA, has made progress in reducing its needs for government transfers, staff stressed the importance of intensifying efforts to limit transfers for next year, in line with the authorities’ plans.

“In addition, the mission and the authorities conferred on the important reforms underway in monetary policy, the financial sector and public financial management, with the support of IMF technical assistance. The Central Bank is steadily strengthening its operational frameworks to better manage bank liquidity and to limit volatility in the foreign exchange market while building reserves.

“The authorities and staff agreed on the continuing priority of strengthening governance and the fight against corruption. Staff stressed the vital importance of adopting before the end of the year the two laws that the government submitted to parliament on illicit asset recovery and anti-money laundering. Failure to adopt these laws would expose Madagascar to potentially far-reaching economic consequences, particularly on the cost of cross-border transactions.”

The mission met with Acting President Rivo Rakotovao, Prime Minister Christian Ntsay, Minister of Finance and Budget Vonintsalama Andriambololona, Central Bank of Madagascar Governor Alain Rasolofondraibe, other senior officials, as well as private sector representatives, civil society, and development partners.


The Government of Madagascar announces the opening of the Madagascar bidding round at Africa Oil Week

The bidding round continues to highlight the importance of the Oil Week and the fact that it continues to drive new business opportunities for exploration companies in Africa

OMNIS, in partnership with Africa Oil Week (, TGS and BGP, announce a licensing round in Madagascar, to be launched at Africa Oil Week, 5-9th November 2018.


The Government of Madagascar announces the opening of the Madagascar bidding round at Africa Oil Week

The bidding round continues to highlight the importance of the Oil Week and the fact that it continues to drive new business opportunities for exploration companies in Africa. Paul Sinclair, Conference Director added “The Madagascar bidding round offers a level of excitement that we have never experienced before at the Oil Week. On top of the 15 confirmed ministers who will lead delegations to Africa Oil Week, we now have a partnership with the Government of Madagascar, TGS and BGP to host what is clearly one of the most exciting round on the continent since the Cote d`Ivoire bidding round in 2017.”

Exploration in Madagascar began in the early 20th century with the discovery of heavy oil-rich sedimentary basins in the west, however this frontier region remains relatively under-explored. The Island shares a maritime boundary with Mozambique, which is in the same oil province where large quantities of natural gas have been discovered. Studies conducted in collaboration with TGS and BGP have resulted in new data that suggest there is significant potential for future discoveries both on and offshore.

“With the aim of intensifying offshore exploration activities, we are delighted to announce that OMNIS will be inviting investment from interested parties, during a licensing round to start in November 2018. We are working together with TGS and BGP to create an attractive environment for exploration in the offshore, and we are confident that this will signal the start of renewed investment for the upstream oil sector in Madagascar,” Voahangy Nirina Radarson, General Manager of OMNIS, commented.

The Madagascar Bidding round will ensure the 2018 Africa Oil Week will be the most exciting Oil Week to date. Alongside the Republic of Uganda Roadshow and the Republic of Congo Bidding Round, Africa Oil Week 2018 is set to be the biggest platform for new ventures in the African Oil and Gas sector.

IMF Team admonishes Madagascar that ‘passing laws to strengthen governance are key to advance program priorities’


President Hery Rajaonarimampianina

A team from the International Monetary Fund (IMF) led by Marshall Mills, Mission Chief for Madagascar, says passing laws to strengthen governance are key to advance program priorities.

The team visited Antananarivo from March14–28, 2018 to hold discussions on the third review of Madagascar’s economic reform program supported by the IMF’s three-year Extended Credit Facility (ECF).

  • Performance under the ECF-supported program is positive overall.
  • Economic growth is projected at 5.0 percent in 2018, and prudent monetary policy is helping to contain inflation.
  • Scaling-up public investment, accelerating reforms at JIRAMA, and passing laws to strengthen governance are key to advance program priorities.

Good progress was made during the discussions, and they will continue in the coming weeks. Following conclusion of ongoing discussions, the IMF Executive Board could consider the third ECF review in June 2018.

At the end of the mission, Mr. Mills issued the following statement:

Madagascar-map2-300dpi“Madagascar’s economic conditions remain favorable, with sustained growth and macroeconomic stability in spite of some shocks. Economic growth was estimated at 4.2 percent in 2017, despite the effects of a major cyclone and drought on agriculture and hydropower, as well as an outbreak of the plague on tourism. 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 4 months of imports at end-2017. The central bank has appropriately managed an associated increase in bank liquidity. Growth is projected to accelerate to 5.0 percent in 2018, led by rising public investment, continued growth in manufacturing, a rebound in agriculture and a recovery in the mining sector. Inflation is expected to decline gradually to below 8 percent by end-2018, after it rose slightly to 9 percent in 2017 due to weather-related shocks.

“Performance under the ECF-supported program remains broadly satisfactory. Based on current data, all quantitative performance targets for end-December were met and for most with a large margin. In particular, reserve accumulation and the fiscal balance continued to exceed program targets. Implementation of structural reforms in the program generally advanced as planned, except for fuel pricing and a minor delay in the new statistics law.

“Staff urged the authorities to maintain the momentum of the program 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.

“Financial difficulties at the state-owned public utility JIRAMA continue to weigh heavily on public finances despite the launch of an ambitious plan to restructure the company. Large losses last year exacerbated by the drought exceeded budgeted transfers, putting additional pressure on public resources. Under the authorities’ current plans, JIRAMA’s transfer needs are also expected to exceed budgeted transfers this year, as higher world fuel prices and service on the debt accumulated in recent years offset the impact of favorable rainfall on hydropower production. Staff urged the authorities to implement measures to limit these operational losses and JIRAMA’s need for government transfers. In addition, higher than expected needs for the government’s wage bill and pensions will also require increased public resources.

“Discussions also addressed priority medium-term structural reforms in monetary policy, financial sector development, and public investment. The BFM continues to develop its operational framework for monetary operations, through a better focus on managing excess bank liquidity and strengthening the legislative framework. The central bank and the ministry of finance and budget also plan to update the legal and regulatory framework for the operation of the foreign exchange market. Building on the Financial System Stability Assessment (FSSA), the authorities will update the legal and regulatory supervisory framework, move towards risk-based prudential supervision, and submit a revised banking law by year end. They are also working to speed up the execution of investment spending that is central to the program’s growth strategy. The recently adopted investment management strategy should improve implementation monitoring and ensure the consistency of new investment projects with the national development strategy.

On governance, 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.

“The 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.

“The mission thanks the Malagasy authorities for their strong cooperation and the constructive discussions.”

The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems. The arrangement for Madagascar in the amount of SDR 220 million (about US$304.7 million or 180 percent of quota) was approved by the IMF Executive Board on July 28, 2016 (see Press Release No. 16/ 370 ). Augmentation of access was granted under the program for SDR 30.55 million (about US$42.39 million or 12.5 percent of the country’s quota) following the IMF Executive Board meeting on June 28, 2017 (see Country Report No. 17/223 ).