African Development Bank Achieves Satisfactory Results in Madagascar

By Richard Adorsu-

Photo Credit: Hotel Business Weekly

NEW AFRICA BUSINESS NEWS (NABN) Accra, Ghana–  The African Development Bank is achieving satisfactory results in Madagascar, according to the mid-term report of the Country Strategy Paper (CSP) for the period 2017-2021 and the performance review of the 2019 country portfolio, approved by the Board of Directors of the Bank.

To achieve the CSP, the Bank relied on two pillars: the development of energy and transport infrastructure to support inclusive growth, and support for the transformation of agriculture and the development of industry. These pillars have had the expected benefits.

In pillar I, improved access to reliable energy at a lower cost, enabled a recovery rate of JIRAMA (Malagasy public company) invoices of 89% in 2018, compared to 40% in 2015. Nearly 76,044 new connections were made between 2015 and 2019 and electricity prices were adjusted by an increase of 37% on average to better reflect costs. In addition, the rate of access to electricity improved slightly from 15% in 2015 to 16.6% in 2019.

For transport connectivity from production areas to markets, 105 kilometers of roads have been built as well as 16 kilometers of rural tracks and 320 meters of bridges. Thus, the traffic on the national road 9 (RN9) increased by 27% between 2016 and 2019 and the journey time fell by half a day. The reduction reaches up to 15 hours for heavy goods vehicles.

In pillar II, the continued implementation of agricultural projects (rehabilitation and extension of the Bas Mangoky II irrigated area, rehabilitation of agricultural infrastructure in the southwest) as well as the Investment Promotion Support Project (PAPI ) have greatly improved access to formal salaried employment in high value-added activities. In fact, the land developed for irrigation increased from 9,000 hectares in 2016 to 21,000 hectares in 2019, of which at least a third was allocated to women. The additional agricultural production per year reached 120,000 tonnes for rice and 35,000 tonnes for cape peas. Jobs created in the textile industry jumped from 80,000 in 2014 to 150,000 in 2019, 70% of which were held by women.

In the area of transformative and job-creating activities, three incubation centers for young people in agriculture and agribusiness have been built, and nearly 410 micro and small agricultural enterprises, of which at least a third are businesses run by women benefit from support to become future entrepreneurs.

In the light of these satisfactory results, the report relating to the mid-term review of the 2017- 2021 Madagascar CSP, combined with the performance review of the 2019 country portfolio, obtained the maintenance of the two pillars for the period up to at the end of 2021.

However, to achieve the results of the CSP, the African Development Bank intends to implement the updated loan program, which was the subject of a wide consultation of stakeholders in Madagascar. Emphasis will be placed on continuing the increased mobilization of resources for the financing of the strategy financed by ADF-15 resources: industrialization and creation of decent jobs with higher added value, opening up of rural areas which abound in economic opportunities, skills development and support for SMEs.

As of October 6, 2020, the Bank Group’s active portfolio for Madagascar consisted of 21 operations. The amount of commitments was $ 553.79 million. The average size of investment projects was increasing, from an average of $ 27.4 million in 2017 to over $ 41.1 million at the end of 2019. The sectors covered are transport (33.9%), agriculture (30.1%), energy (25.5%), governance (9.9%), water and sanitation (0.4%), environment (0.2%) and the social sector
(0.1%).

For New Africa Business News Richard Adorsu Reports,  Africa Correspondent