WB provides $175 million in grants and credits

The World Bank approved a total of US $175 million in grants and credits to Madagascar on Tuesday to support poverty reduction programmes and a community development project. A Poverty Reduction Support Credit (PRSC), comprising a low-interest International Development Association grant of $88 million and credit of $37 million, was awarded to support governance and human development reforms under the country's Poverty Reduction Strategy Paper (PRSP) framework. The PRSC promotes reforms in public expenditure management, anti-corruption and the judiciary, as well as implementation of the government's Education for All Agenda (EFA), aimed at increasing access to, and the quality of, primary education. "Implementation of the PRSP is progressing well," the Bank said in a statement. "The economy rebounded from the 2002 crisis, and grew by almost 10 percent in 2003. There are encouraging signs that governance is improving and Madagascar has achieved real results on the ground." Primary school enrolment rates increased from around 70 percent in 2001 to over 80 percent, while a roads programme had rehabilitated over 1,800 km, a three-fold increase from 2001. Support for EFA has included providing all primary students with learning materials, teacher recruitment, reform of the curricula, and reinforcement of management capacity at central and local levels. However, Madagascar remains vulnerable to "exogenous shocks" which undermine growth and poverty reduction, the Bank noted. In early 2004, Madagascar was hit by two cyclones barely a month apart. Over a third of a million people became homeless, over 300,000 hectares (or 10 percent) of agricultural land and over 4,600 schools and health centres were damaged or destroyed. Exports of vanilla and shrimp have been affected, and rice production has been severely set back. To assist Madagascar's recovery from the cyclones, the Bank has supplemented a Community Development Project credit with additional funds of $50 million.