African Development Bank Approves $67.3 Million Loan to Boost Madagascar's Economy
The approval of this loan marks a significant step towards strengthening Madagascar's economy and fostering inclusive development.
ABIDJAN, Ivory Coast— The African Development Bank Group (AfDB) has approved a $67.3 million loan to Madagascar to support the implementation of the first phase of the country’s Financial Management and Resilience Support Programme for 2024-2025, writes Winston Mwale.
The loan, which includes funding from the Transition Support Facility, was approved on Sept. 20, 2024, by the AfDB’s Board of Directors. The African Development Fund, the Bank Group’s concessional financing window, provided the funding.
The program aims to strengthen economic and financial governance and improve economic resilience, contributing to the creation of conditions for strong and inclusive economic growth in Madagascar.
“The programme aims to contribute to the creation of favourable conditions for strong and inclusive economic growth by strengthening economic and financial governance, and improving economic resilience,” said Adam Amoumoun, manager of the African Development Bank’s Country Office in Madagascar.
The initiative supports the Malagasy authorities in implementing key reforms outlined in Madagascar’s General State Policy (PGE) 2024-2028 and New Energy Policy for 2015-2030.
It will address the investment deficit by increasing the budget, releasing additional resources for economic recovery, while improving governance in the energy sector.
The program plans to modernize tax management by supporting the rollout of the Integrated Tax Administration System (SAFI). SAFI aims to computerize tax operations, facilitate local revenue collection and taxpayer management, and combat tax fraud.
The program will also support the creation of a national register of beneficial owners of legal entities and legal structures to identify individuals controlling businesses and facilitate investigations in cases of corruption.
To improve governance in the energy sector, the program plans to support the action plan established by the JIRAMA (Madagascar’s public corporation for electricity and water services). The goal is to improve JIRAMA's short-term technical and financial performance to reduce its dependence on state support.
The program prioritizes the well-being of the Malagasy people. It will create a better regulatory framework to promote investments, develop public-private partnership (PPP) projects, and enhance sectoral governance, particularly in the energy sector.
These measures will help to improve the business environment and attract investments in job-creating sectors.
The approval of this loan marks a significant step towards strengthening Madagascar's economy and fostering inclusive development.