Madagascar has been urged to accelerate economic and structural reforms to unleash the country’s significant potentials at a time when the economy is on a recovery path.
The International Monetary Fund (IMF) said the country should give priority to areas with potential to drive an economic renaissance after a period of political turmoil nearly grinded growth to a halt.
Following the conclusion of Article IV consultation, the Britton Woods institution note that Madagascar’s forthcoming National Development Plan should give priority to reforms that would raise the level and efficiency of pro-poor/pro-growth government spending, improve governance and strengthen institutions, increase high-return infrastructure investment, and improve the business climate.
“Steadfast implementation of these reforms will promote employment and private sector growth and reduce poverty,” said the IMF Executive Board in a statement.
Madagascar is one of the poorest countries in the world and a fragile environment coupled by uncertainties linked to political instability, weak institutions and weak governance have been eroding economic growth.
The IMF noted that since the political crisis in 2009, economic growth has been slow and social services, including basic health care and primary education, have deteriorated.
With the government that assumed power in early 2014 showing commitment to addressing the country’s challenges, the IMF projects economic growth to stand at three per cent in 2014.
Nevertheless, the country is facing complex challenges stemming from weak institutions and governance, binding resource constraints, vulnerability to shocks and the urgent need to reverse the deterioration of development indicators.
International Monetary Fund (IMF)