Press Release No. 05/296

Press Release: IMF to Extend 100 Percent Debt Relief to Madagascar Under the Multilateral Debt relief Initiative

December 23, 2005

Mr. Samir Jahjah the IMF Resident Representative for Madagascar, issued the following statement on December 22 in Antananarivo:

"Under the Multilateral Debt Relief Initiative, the IMF Executive Board has approved debt relief for Madagascar (see Press Release No 05/286). As part of the Initiative, the IMF will provide 100 percent debt relief on all debt incurred by Madagascar to the IMF before January 1, 2005, that remains outstanding. This amounts to approximately US$197 million, or US$184 million excluding remaining assistance under the Heavily Indebted Poor Countries Initiative. This debt relief should become available in early January as soon as the remaining consents of the contributors to the PRGF Trust Subsidy Account have been received. The international community has made these additional resources available to help Madagascar make progress toward its Millennium Development Goals.

"Madagascar has qualified for IMF debt relief because of its overall satisfactory recent macroeconomic performance, progress in poverty reduction, and improvements in public expenditure management. Recent policy adjustments in response to sizable fiscal revenue shortfalls, and steps to address the structural and financial weaknesses at the public utility company (JIRAMA) provide assurance that macroeconomic stability will be maintained. In addition, the government has committed to implement a 2006 budget that would be consistent with the authorities' macroeconomic objectives and to strengthen public expenditure management. Performance in these areas provides assurance that resources made available under the Multilateral Debt Relief Initiative will be used effectively."

"The IMF looks forward to working with Madagascar to help it develop a strong and stable economy and to make sustained progress toward the MDGs," he said.