Contacts
In Washington:
Rachel McColgan-Arnold (202) 458 5299
rmccolgan@worldbank.org In Antananarivo: Erick Rabemananoro (261-20) 2256000 erabemananoro@worldbank.org WASHINGTON, October 21, 2008 - The World Bank’s Board of Directors today approved an IDA credit in the amount of $30 million to the Republic of Madagascar, representing additional financing for the Rural Development Support Project (RDSP). “This credit will help finance the costs associated with scaled-up activities to enhance the impact of a well-performing ongoing project and contribute to an enhancement of its impact and development effectiveness” explained Paavo Eliste, the project’sTask Team Leader. The objective of the RDSP is to increase incomes and reduce poverty in rural areas, while preserving the country’s natural resource base. The scaled up activities will target additional beneficiaries among the poorer segment of the country’s population. Rural development remains a major challenge in Madagascar, with around 80 percent of the rural population being poor. The economy is largely agrarian, with agriculture contributing one-third of total GDP and 40 percent of total exports. About one-half of Madagascar is cultivable, but little more than 5 percent of the total land area is currently planted. A large part of the cultivated area is under irrigation (40 percent), but productivity remains low, pointing to the need to stimulate sustained and broad-based on-farm productivity gains and diversification away from rice toward higher value crops. Productivity increases are urgently needed to meet local food needs, as the country currently imports about 250.000 tons of rice per year. In addition, the recent surge in food prices represents an opportunity for Madagascar, as the country has the potential to become an important food crop supplier for the region. “This is the only program in the sector with a nation-wide scope and, thus far, the sub-projects from the original project have reached the intended beneficiaries. The project has made an impact on the incomes of about three quarters of the rural communes and has far exceeded the targets that had been set: double the anticipated number of farmer organizations was reached and more than 1.4 million persons have benefited from this project. This additional financing will allow us to ramp up activities even further to meet the large number of outstanding requests for sub-projects that have been received from poor rural communities” underlined Michael Morris, Lead Agricultural Economist in the World Bank Madagascar Country Office. This additional financing credit extends the life of the project by two and a half years, until June 30, 2011. The original RDSP of US$ 89.05 million was approved for six years on June 19, 2001. It had been extended afterwards by 18 months to December 31, 2008. The financing is made available on standard IDA terms (40 years maturity, 10 years grace period).
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