World Bank to give Madagascar $400 mln over next three years

by Reuters
Monday, 19 May 2014 10:18 GMT

By Lovasoa Rabary

ANTANANARIVO, May 19 (Reuters) - The World Bank will give Madagascar $400 million in financial support over the next three years, a senior bank official said, after the Washington-based lender recently restored ties with the Indian Ocean island following a peaceful election late last year.

The World Bank said in March it was resuming normal relations with the country after having suspended budgetary support during a five-year political crisis triggered by a 2009 coup.

Other donors have also moved to restore ties following the smooth election of President Hery Rajaonarimampianina in December.

Makhtar Diop, World Bank Vice President for Africa, said the bank was ready to unlock funding after being reassured by Rajaonarimampianina that the new government was committed to taking steps to improve "economic governance".

"These improvements will allow us to direct our budgetary and financial support in three different areas: nutrition, social protection and infrastructure," Diop told a news conference in Madagascar's capital Antananarivo.

"(The funding cycle) begins on July 1 and will make $400 million available to Madagascar over three years," Diop said, adding that there would be no conditions on the funding.

External financing made up 40 percent of Madagascar's budget until donors withdrew aid after rebel troops in March 2009 stormed the presidential palace and former disc jockey Andry Rajoelina seized power.

The World Bank forecasts that the island's economy will expand 3.7 percent this year and 4 percent in 2015, below earlier projections and insufficient, it said, to significantly alleviate poverty levels that deepened during the crisis.

Madagascar, famed for its wildlife and eyed by foreign companies for its minerals, has struggled to lure back tourists and court oil and mining giants since the coup. The economy has since slumped and poverty deepened. (Writing by George Obulutsa; Editing by James Macharia and Susan Fenton)

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