The International Monetary Fund (IMF) has urged the government in Madagascar to prioritise specific projects if the country is to achieve medium-term growth objectives.
According to George Tsibouris who led an IMF mission for Article IV consultation in Madagascar, although the country’s development program, the National Development Plan (NDP), sets a framework for robust growth and poverty reduction, it important to translate this framework into specific priorities and actions to enable the achievement of medium-term objectives.
“In the medium term, the key challenge for Madagascar is to secure strong, sustainable, pro-poor growth to help reverse the deterioration in development indicators. The government has an important role to play in this process through the scaling up of essential infrastructure, reforms to improve the business climate including governance and enhanced social development policies,” said Tsibouris.
He added that to meet Madagascar’s development needs and to preserve macroeconomic stability, the government must broaden the tax base, improve the quality and composition of public spending and reinforce anti-corruption institutions.
According to the mission, Madagascar is showing signs of economic recovery, with growth at three per cent and inflation at under seven per cent in 2014.
However, weak tax revenue collections, spending on high-priority areas such as education and health continues to be constrained.
“Monetary and financial sector reforms should include strengthening the capital base of the central bank and enhancing its oversight and independence. It will be important to ensure that the foreign exchange market is sufficiently liquid and reflects market conditions. In that context, the central bank should rebuild its international reserves,” noted Tsibouris.
International Monetary Fund (IMF)