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Madagascar Discloses COVID-19 Related Spending: Over $600 Million Committed to Mitigate Pandemic Impact

Antananarivo, Madagascar - The Ministry of Economy and Finance has released information on external grants and loans received in 2020 to mitigate the impact of the COVID-19 pandemic. According to the ministry’s website, commitments total over $600 million, with approximately $450 million already disbursed.

Use of Funds

The funds were used for various purposes, including:

  • Social safety net programs
  • Support for the recovery of tourism and agribusiness sectors
  • Additional financing for the Basic Education Support Project

The ministry’s website provides detailed information on spending by ministries, categories, and subcategories, including:

  • Hospitalization
  • Treatment
  • Care

Procurement Contracts

Notably, the ministry has also disclosed procurement contracts related to COVID-19 spending, providing information on:

  • Purpose
  • Amount
  • Awardees

As of March 8, 109 out of 127 listed contracts are available for download, with ex-post delivery reports for executed contracts being published.

Economic Impact of COVID-19

The pandemic has had a significant impact on Madagascar’s economy. The number of visitors collapsed with the halting of international commercial passenger flights since March 2020. Inflation remains below 5 percent after reaching its lowest level in eight years in February 2020. Tax revenue, especially from customs, has been hard hit, but available government deposits remain comfortable due to budget under-execution and important budget support received.

IMF’s New Extended Credit Facility

The International Monetary Fund (IMF) has launched a new Extended Credit Facility (ECF) program for Madagascar, aimed at supporting the country’s recovery from the pandemic. The ECF will focus on:

  • Rebuilding fiscal space
  • Resuming structural reforms
  • Addressing long-term fragilities

In a statement, the IMF emphasized that its engagement remains crucial to help address Madagascar’s fragilities and challenges, including widespread poverty, high income inequality, low human capital indicators, gaps in basic infrastructure, and corruption issues. The pandemic has exacerbated these crises and delayed measures to support the country’s unfinished structural reform agenda.

Priority Areas

The ECF program will focus on three key areas:

  • Rebuilding fiscal space to allow for much-needed capital investment and social spending
  • Resuming and advancing the authorities’ structural reform agenda
  • Creating fiscal space for investment in physical and human capital