In Washington: Aby Toure (202) 473 8302
In Madagascar: Jocelyn Rafidinarivo (261-20) 225 6000
WASHINGTON, July 13, 2006– The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit* of US$40 million to support the implementation of Government’s Poverty Reduction Strategy Paper (PRSP).
The Third Poverty Reduction Support Credit (PRSC 3) is a budget support credit which will deepen and consolidate reforms, that were initiated under PRSC 1 and PRSC 2 approved respectively in July 2004 and July 2005. PRSC 3 will support the implementation of two of the three main axes of the PRSP: governance and providing human and material security.
On governance, PRSC 3 includes assistance to the Government of Madagascar in continuing the implementation of its 2005 Priority Action Plan for public expenditure management reforms, and developing and implementing its 2006 Priority Action Plan. Following the operationalization of the Anti-Corruption Agency (BIANCO), PRSC 3 deepens support for the Government anti-corruption agenda. It also supports the implementation of a reform program for customs.
The Third Poverty Reduction Support Credit (PRSC 3) consolidates support to the strategic axis of providing human and material security, by supporting the Government’s Education for All agenda (EFA) and improving service delivery in nutrition, health and rural water supply. PRSC3 supports policy and institutional reform in the nutrition sector (through the National Nutrition Council and its secretariat) and in the health sector, with the update of the national health policy, and improved access to rural water through the development of a Water for All program.
“PRSC 3 will continue to contribute to Madagascar reaching its development goals. The reforms supported will strengthen the institutional infrastructure needed to improve the public sector’s capacity to carry out its role more effectively”, said Stefano Paternostro, the World Bank Task Team Leader of the project.
“Improved delivery of public services is essential if the Government is to reach its goals for poverty reduction and improve the quality of life in Madagascar,” said James Bond, the World Bank Country Director for Madagascar. “In addition, strengthened monitoring and evaluation will lead to an enhanced accountability and results focus,” Bond added.
Madagascar has maintained its focus on implementing its poverty reduction strategy with good results evident particularly in the implementation of the Education for All and nutrition programs, and improving the institutional environment for anti-corruption.
The country has reached the Heavily Indebted Poor Countries (HIPC) Initiative completion point in October 2004 bringing $444 million debt relief and improved prospects to maintain sustainable debt levels in the medium term, leading also to the benefit of the new Multilateral Debt Relief Initiative (MDRI) of the G8 countries for an additional $1768 million debt relief from the World Bank. Madagascar has also become last year the first country to receive financing from the US Millennium Challenge Account.
* The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period.