By Judith Ugwumadu | 7 May 2014

Madagascar would be able to access up to $47.4m of loans from the International Monetary Fund under a programme intended to tackle the economic crisis in the country, it has been announced.

The loan agreement is expected to be approved next month under the IMF’s Rapid Credit Facility that provides quick help for poor countries recovering from economic shocks or natural disasters. 

Madagascar’s economy has struggled since a political crisis began in 2009, after street protests led to a government coup. This led to a fall in financial support to the country, which resulted in cuts in public infrastructure and social spending. 

The IMF restored its links with the country in March following peaceful elections last year.

George Tsibbouris, head of the IMF staff mission said the government’s immediate objective must now be to create a solid foundation for faster growth and poverty reduction. Around 90% of the population now lives below $2 a day, making poverty a critical issue, he said. 

‘It will be crucial to pursue policies that address pressing social and development needs while maintaining macroeconomic and financial stability.

‘Madagascar has urgent balance of payments and budgetary needs that, if not addressed, could result in further economy disruption.’

The IMF has agreed on a combination of measures to improve tax and customs revenue collection as well as increase funding of priority public investment programmes and social spending.