Mada­gas­car presents en­cour­ag­ing eco­nomic po­ten­tial: IMF

The Pak Banker - - FRONT PAGE -

MADA­GAS­CAR: Ms. An­toinette Sayeh, Di­rec­tor of the African Depart­ment of the In­ter­na­tional Mon­e­tary Fund (IMF), vis­ited Mada­gas­car dur­ing March 18-20 2016 to hold dis­cus­sions with the au­thor­i­ties on the op­por­tu­ni­ties and chal­lenges fac­ing Mada­gas­car, how to gen­er­ate stronger eco­nomic growth, and how to trans­late it into bet­ter liv­ing stan­dards for its cit­i­zens.

At the con­clu­sion of the visit, Ms. Sayeh said, on this first visit to Mada­gas­car in my ca­pac­ity as Di­rec­tor of the IMF African Depart­ment, I had the op­por­tu­nity to meet many tal­ented and com­mit­ted peo­ple in the govern­ment, pri­vate sec­tor and civil so­ci­ety, and this al­lowed me to have a bet­ter un­der­stand­ing of the eco­nomic op­por­tu­ni­ties and chal­lenges of the coun­try.

Mada­gas­car cur­rently presents en­cour­ag­ing eco­nomic po­ten­tial. De­spite the head­winds from low com­mod­ity prices and drought, the IMF projects stronger GDP growth in 2016 than 2015, thanks to higher pub­lic in­vest­ment and a re­cov­ery in tourism, tex­tiles and agri­cul­ture. . In­fla­tion will re­main con­tained. Re­forms are be­ing im­ple­mented, lead­ing to in­creased do­mes­tic rev­enue col­lec­tion and en­hanced spend­ing qual­ity. New mea­sures to im­prove tax ad­min­is­tra­tion have fo­cused on in­creas­ing com­pli­ance, de­ter­ring fraud, and tack­ling the large in­for­mal sec­tor. Con­cern­ing spend­ing, the au­thor­i­ties have al­ready dis­con­tin­ued fuel sub­si­dies, in­tro­duced an au­to­matic pric­ing mech­a­nism for fuel, and cleaned up the govern­ment's pay­rolls. With sup­port from the World Bank, they will con­tinue to tackle the prob­lems en­coun­tered by JIRAMA and Air Mada­gas­car in or­der to con­trol trans­fers to state-owned en­ter­prises. The new draft Cen­tral Bank law, which is un­der con­sid­er­a­tion by the cab­i­net, will help en­hance the in­de­pen­dence and ca­pac­ity of the cen­tral bank to pur­sue price sta­bil­ity.

"Other ma­jor re­forms must be pur­sued to strengthen the econ­omy and con­sol­i­date growth at a higher level, such as strength­en­ing the fi­nan­cial sys­tem. Con­tin­u­ing with a pru­dent fis­cal stance that avoids ar­rears and en­sures man­age­able pub­lic debt also re­mains very im­por­tant. Most im­por­tantly, im­prove­ments in gov­er­nance and the fight against cor­rup­tion must be stepped up, to en­sure that re­forms are im­ple­mented and bear fruits.

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