Republic of Madagascar: Request for an Arrangement Under the Extended Credit Facility and Cancellation of the Current Arrangement Under the Extended Credit Facility and Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Republic of Madagascar

This paper presents Republic of Madagascar’s Request for an Arrangement under the Extended Credit Facility (ECF) and Cancellation of the Current Arrangement under the ECF and Request for an Arrangement under the Resilience and Sustainability Facility (RSF). The RSF arrangement will underpin reforms to strengthen adaptation to climate change and resilience against natural disasters, support climate change mitigation efforts, enhance the protection of ecosystems, and create conditions for green private sector investment. Madagascar continues to face challenges, with economic growth easing in a context of weak fiscal performance and gradual reform progress. Going forward, climate change poses significant risks to Madagascar’s economy. The authorities are implementing measures to create fiscal space for much needed social spending and investment. These include medium-term revenue mobilization efforts through tax policy and revenue administration measures. Tackling climate change challenges will be critical for Madagascar’s medium-term macroeconomic resilience. The report suggests that the authorities should take full advantage of the support provided by the IMF and the World Bank through the Enhanced Cooperation Framework for Climate Action, and by other development partners to catalyze private climate financing.