World Bank approves US $30 million credit

The World Bank (WB) has given the go-ahead to Madagascar's poverty reduction strategy and approved a credit of US $30 million to support reforms in the public sector.

The credit is expected to go towards improving governance and bolstering economic growth, particularly in rural areas, WB said in statement on Wednesday.

Although a political crisis in 2002 brought the already struggling economy to a standstill, the Bank noted that since then the country had outperformed expectations - in just a year economic growth in Madagascar has soared to 9.6 percent. WB noted that the government's commitment to fighting corruption and reducing poverty had contributed to the progress.

Notwithstanding an enhanced economic performance during the last year, poverty remains pervasive in Madagascar. Some 70 percent of the population lives on less than a US $1 a day, and improved delivery of government services to the poor is at the heart of government's attempts to address poverty.

The World Bank also pointed to a recently approved governance and institutional development project, which aims to make the country's public finance system more efficient. The project is expected to bring the public procurement system into line with international standards and strengthen coordination, monitoring and evaluation in the administration.

"The project will also build and strengthen the capacity of staff in key national institutions, to deliver high quality training in areas required for the sustainability of the reforms," said Guenter Heidenhof, World Bank Task Team Leader for the project.