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World Bank Supports Improved Social Service Delivery and Boosting Jobs Creation in Madagascar

December 18, 2014

WASHINGTON, December 18, 2014 - The World Bank Group’s Board of Executive Directors today approved a total of US$95 million to support Madagascar’s efforts to improve public service delivery and boost key areas for job creation.

 “The past political crisis had devastating effects on Madagascar. Poverty has risen and is now among the highest in the world,” said Mark Lundell, World Bank Country Director for Madagascar, Mozambique, Mauritius, Comoros, and Seychelles. “Today’s financing reinforces the Bank Group’s support in tackling the tremendous challenges that Madagascar is facing.”

The first operation, the Reengagement Development Policy Operation (RDPO) financed by a US$45 million International Development Association (IDA)* credit accompanies the country’s efforts to consolidate the return to constitutional order and will provide budget support to the government to improve the efficiency and transparency of public service delivery.

Estimates show that in 2010, about 82 percent of Madagascar’s 22 million people were living on less than US$ 1.25 a day. The RDPO is expected to contribute to reducing extreme poverty in Madagascar by promoting reforms to increase social service spending.

Also approved today is a US$50 million IDA credit for the first phase of the Second Integrated Growth Poles and Corridor Program (PIC2) that will help increase economic opportunities and access to enabling infrastructure services in three regions. In the Atsimo-Andrefana and Diana Regions, this local development project will work closely with local authorities and the private sector to help realize the local tourism and agribusiness potential. It will also promote agribusiness pilot programs in the Anosy Region and support the development of Ehoala Park into a multi-purpose logistics and commercial facility.

The new project is expected to directly benefit as many as 300,000 people. It builds upon the lessons learned from implementation of the Madagascar Integrated Growth Poles Project, which co-financed the construction of Ehoala Port in the south of Madagascar, and helped crowd in a US$1.2 billion investment by Rio Tinto. It also financed an expansion of basic services to poor communities which led to a quadrupling in the number of people with access to potable water and a tripling in the number of people with access to solid waste collection services.   

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.8 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $18 billion over the last three years, with about 50 percent going to Africa.

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