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Coronavirus - Madagascar: World Bank Provides $75 Million to Mitigate the Impacts of COVID-19 and Support Recovery

The World Bank Board of DirectorsrecentlyapprovedaUS$75milliondevelopment policyoperation for Madagascartomitigate the impact of the COVID-19 crisis.

TheMadagascar COVID-19 Response Development Policy Financingwill help closeafinancing gapcaused by the COVID-19crisis while supportingkey reforms to reinforce the effectiveness and transparency of thegovernment's crisis response and to lay the foundation for sustained and resilient recovery.

"The economic and fiscal impact of the COVID-19 crisis in Madagascar will be substantial in 2020andcould reverse past progress in poverty reduction and deepen fragility. This operation will help thegovernment save lives, protect the livelihoods of the most vulnerable populations and preserve jobs, while implementing policyreforms and strengthening institutionsin order tolay the foundation for a stronger social and economic recovery"saidMarie-Chantal Uwanyiligira, World Bank Country Manager forMadagascar. 

The COVID-19 pandemic has substantially redefinedeconomicprospects, in particular through the collapse of international trade and tourism. Containment measures needed to halt the pandemic alsohad severeeffectson the economy and people's livelihoods.In this context, extreme poverty is predicted to increase in 2020, undoing three years of consecutive declines.

Thisoperationaims to alleviate the immediate impact of the COVID-19 outbreakandtohelp rebuild a stronger and more resilient economy.Policycommitments made by the Government in the context ofthisoperationinclude: (i) a multisectoral national emergency plan; (ii) a dedicated COVID-19 Response Fundtotransparentlymanageemergencyspending; (iii) the simplified proceduresto open individuale-moneyaccounts to facilitate cash transferpaymentsto vulnerable populations; (iv) a response plan to support the private sectorand protect jobs; (v)measuresto sustain liquidity and access to creditfor viable companies; (vi) newelectricityconnection and tariff structures,benefitingvulnerable populations;and(vii)measures to boostdebt transparency.Together, theprogram of reformssupported by this operation are expected to have positive effects on poverty. In particular, cash transfers provide direct support to vulnerable groups who have lost income as a result of the crisis and confinement measures, and enhanced access to finance, coupled with the alleviation of short-term costs,canpromote business resilience.

Thisoperation is part ofa series ofWorld Bank Group country program adjustmentsthat comprisethe activation of Contingent Emergency Response Componentswithin theportfolioto support thegovernment's health, social, education, water and sanitation response;thedevelopment ofnew operations responding to the pandemic and reinforcing resilience to future shocks; andthefrontloading offutureoperationsto helpacceleratethe recovery.

This operation complements the IMF Rapid Credit Facility, additional budget support by the AFD (Agence Française de Developpement) and AfDB (African Development Bank), and participation in the G20's Debt Service Suspension Initiative, bringing the total amount of emergency support to US$476 million this year, equivalent to 3.1 percent of GDP.

World Bank Group COVID-19 Response 

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the privatesector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery.  This includes $50 billion of new IDA resources through grants and highly concessional loans.


Distributed by APO Group on behalf of The World Bank Group.
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