WASHINGTON, April 25, 2023 – Supporting the Government of Madagascar to achieve inclusive and resilient growth through more job opportunities, better human capital outcomes, and resilience against shocks are key elements of the World Bank Group’s (WBG) new 2023-2027 Country Partnership Framework (CPF) for Madagascar, endorsed today by the Board of Executive Directors.
The new five-year CPF is centered around three high-level outcomes: (i) improving job opportunities through transformative action, (ii) making growth more inclusive by addressing weaknesses and inequities in public service delivery, especially in health care and education, and reducing spatial and gender inequalities; and (iii) creating resilience to shocks that can reverse improvements in growth or worsen socioeconomic inequalities.
Despite vast resources, Madagascar has challenges that have hampered its long-term development. The poverty rate remained at 75.2% in 2022. Uneven investment in physical and human capital, decreasing productivity coupled with stalled structural change in the economy, and vulnerability to shocks are the most salient constraints on Madagascar’s development. Pervasive governance challenges have prevented significant reform progress. Each of these constraints continues to limit prospects for broad-based development, with the ongoing COVID-induced crisis and famine in the south only increasing their relevance.
“Madagascar stands at a crossroads to convert its development challenges into an opportunity to find a path out of its predicament. Reducing poverty in Madagascar will require a sustained period of robust inclusive growth spanning multiple years, which would enable the country to accumulate assets and build a solid foundation for its economic transformation. Progress is possible only if political ownership of the reform agenda is reinforced and the fate of poor and vulnerable populations is put at the center of the policy debate,” said Marie-Chantal Uwanyiligira, World Bank Country Manager for Madagascar. “This CPF follows the World Bank Group’s long-term commitment to Madagascar and through this new partnership strategy, we hope to be able to further support the country in increasing its growth over the long term through building up human capital and physical assets while strengthening resilience to shocks to exit the country out of the poverty trap.”
“A strong private sector is essential for sustainable economic growth, job creation, financial inclusion, and poverty reduction in Madagascar,” said Marcelle Ayo, IFC Country Manager for Madagascar. “As part of the World Bank Group, IFC is a longtime partner with the government of Madagascar and its private sector, and we will leverage the new CPF to ramp up our strategy to deliver funding and advisory services to urgently improve access to finance for smaller businesses, address infrastructure challenges, strengthen human capital, and to build economic resilience.”
Priority interventions of the new CPF will mobilize investments to accelerate economic and spatial transformation; enhance human capital and resilience of the poor to improve their livelihoods; and strengthen oversight mechanisms and citizen engagement to deliver better policy outcomes. This CPF will expand programs and financing in the areas that have yielded good results (nutrition, social protection, Growth Poles series). It will also focus on two major sectors (energy and telecommunications), adoption of a maximizing-finance-for-development approach, and joint implementation teams of the International Finance Corporation (IFC) and the World Bank. Moreover, this new CPF will use innovative approaches such as the Project Targeting Index Methodology to focus the program in areas with high levels of poverty and along growth corridors and the Governance Filter Approach to emphasize the criticality of governance concerns across the portfolio.
Underpinned by the Systematic Country Diagnostic (SCD), and the Country Private Sector Diagnostic (CPSD), this CPF also reflects broad consultations with government, development partners, the private sector, civil society, and academia.