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Republic of Madagascar: Staff-Monitored Program and Request for Disbursement Under the Rapid Credit Facility—Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
December 2015
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Fund Relations

(As of September 30, 2015)

Membership Status: Joined: September 25, 1963;Article VIII
General Resources Account:SDR Million%Quota
Quota122.20100.00
Fund Holdings of currency122.1399.94
Reserve Tranche Position0.070.06
SDR Department:SDR Million%Allocation
Net cumulative allocation117.09100.00
Holdings59.0550.43
Outstanding Purchases and Loans:SDR Million%Quota
RCF Loans30.5525.00
ECF Arrangements24.7520.25

Latest Financial Arrangements:

Date ofExpirationAmount ApprovedAmount Drawn
TypeArrangementDate(SDR Million)(SDR Million)
ECF1Jul 21, 2006Jul 20, 200973.3253.03
ECFMar 01, 2001Mar 01, 200591.6591.65
ECFNov 27, 1996Nov 30, 200081.3678.68

Formerly PRGF.

Formerly PRGF.

Projected Payments to Fund2

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20152016201720182019
Principal10.618.255.893.06
Charges/Interest0.010.030.030.030.03
Total0.0110.648.285.923.09

When a member has overdue financial obligation outstanding for more than three months, the amount of such arrears will be shown in this section.

When a member has overdue financial obligation outstanding for more than three months, the amount of such arrears will be shown in this section.

Implementation of HIPC Initiative:

Enhanced
I. Commitment of HIPC assistanceEnhanced Framework
Decision point dateDec 2000
Assistance committed
by all creditors (US$ Million)1835.75
Of which: IMF assistance (US$ million)19.17
(SDR equivalent in millions)14.73
Completion point dateOct 2004
II. Disbursement of IMF assistance (SDR Million)
Assistance disbursed to the member14.73
Interim assistance5.62
Completion point balance9.11
Additional disbursement of interest income21.69
Total disbursements16.42

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

Under the enhance framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

Under the enhance framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Implementation of Multilateral Debt Relief Initiative (MDRI):

I. MDRI – eligible debt (SDR Million)1137.29
Financed by: MDRI Trust128.50
Remaining HIPC resources8.79
II. Debt Relief by Facility (SDR Million)
Eligible Debt
Delivery DateGRAPRGFTotal
January 2006N/A137.29137.29

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as end-2004 that remains outstanding at the time the member qualifies for such debt relief.

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as end-2004 that remains outstanding at the time the member qualifies for such debt relief.

Safeguards Assessments:

A safeguards assessment for Banque Centrale de Madagascar (BCM) was completed in January 2015. Previous assessments were completed in March 2006 and September 2008. The update assessment found that the political crisis in Madagascar during 2009-14 has affected the governance and financial autonomy of the BCM. Capacity building and the development of internal controls have also been interrupted and little progress had been made in implementing the safeguards measures recommended by the 2006 and 2008 assessments. The 2015 assessment updated the recommendations in all areas of the safeguards framework. The report noted that: (i) governance arrangements did not provide for adequate oversight and recommended the establishment of an audit committee; (ii) the BCM had significant outstanding claims on the government and was in a negative equity position, thus its financial autonomy had been compromised; and (iii) some key functions, including internal audit, should be modernized and the BCM legal framework updated to better safeguard its autonomy and strengthen governance. The BCM has since taken steps to address some of the assessment’s priority recommendations, including publishing its financial statements, and through technical assistance on its legal framework, improving its legal framework and internal audit functions, and beginning the implementation International Financial Reporting Standards (IFRS).

Exchange Rate Arrangement:

The currency of the Republic of Madagascar is the Malagasy ariary. The de jure exchange rate arrangement is free floating. The exchange rate is determined in the official interbank market. The Central Bank of Madagascar (CBM) intervenes in the interbank market to smooth large exchange rate fluctuations and meet foreign reserve targets. Information on CBM daily interventions is not publicly available. The minimum, maximum, and weighted average daily rates as well as the number and amount of transactions are made available to the public through the CBM official site. The de facto exchange rate arrangement is classified as floating.

The Republic of Madagascar accepted the obligations of Article VIII of the IMF Articles of Agreement with effect from September 18, 1996. The Republic of Madagascar maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions.

Article IV Consultation:

The most recent Article IV consultation was concluded on January 16, 2015 (Country Report No. 15/24).

Technical Assistance:

Technical assistance provided to Madagascar following the normalization of relations in March, 2014 are listed below.

Year of delivery

Fiscal Affairs Department (FAD)

Diagnostic Mission: Improving Tax and Customs Revenue Collection2014
PFM Reform Strategy2014
Medium-Term Fiscal Framework (MTFF)2014
Energy Subsidy Reform2014
Tax Policy Review2014
MTFF and Natural Resources Management2014
Tax Administration: Review of the legal framework for taxation of mining and petroleum operations2015
Revenue Mobilization: Transfer pricing2015
Budget Formulation: Strengthening medium-term macro fiscal and budget frameworks2015
Customs Administration: Risk management and post clearance audit2015
Revenue Administration: Action plan to improve tax and customs revenue collection2015
Public expenditure management: Control and audit on public expenditure2015
Management of Expenditure Arrears2015

Monetary and Capital Markets Department (MCM)

Technical Assistance Needs Assessment2014
Introduction of IFRS in Central Bank Accounting2015
Strengthening Internal Audit and Controls2015
Strengthening Monetary Policy Implementation2015

Legal Department (LEG) and Monetary and Capital Markets Department (MCM)

Central Banking Law2014

Statistics Department (STA)

National Accounts2015
Price Statistics2015
Balance of Payments Statistics2015

Resident Representative:

Mr. Patrick Imam has been the Resident Representative since September 2014.

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