A time limit without delay. Conducive to hesitation. On May 19, 2023, at the end of the mission of the fourth review of the Extended Credit Facility (ECF), Frédéric Lambert, at the head of the emissaries of the International Monetary Fund (IMF), made a multifaceted statement. With extracts on Jirama and fuel prices, which have become the Gordian knot of the economy’s difficulties to flourish further.
He mentioned that “the recovery of the Jirama electricity and water company remains a priority to reduce its cost for the state budget and improve the service provided. The authorities have committed to strengthening monitoring and transparency of Jirama’s financial situation. They reiterated their determination to implement an automatic adjustment mechanism for fuel prices from the first quarter of 2024 as well as reinforced social safety nets. The authorities continue to implement the anti-corruption strategy and will strengthen the legal framework to enable adequate public control of public policies.”
While the government’s commitments, with these two focal points, subsequently made it possible to disburse 24.4 million SDRs, or the equivalent of 32.6 million dollars, no sign has been recorded to satisfy the second recommendation. The expression “from the first trimester” is too vague to be precise in time. It opens a breach in the enforceability of this automatic fuel price adjustment mechanism.
During its last visit to Madagascar, Frédéric Lambert’s team had an in-depth meeting with technicians from the Ministry of Energy and Hydrocarbons to discuss this same thorny issue. In the process, the Council of Ministers gave the green light to double Madagascar’s share in the IMF. When Madagascar joined this institution, it subscribed for 244.40 million SDRs. An additional 244.40 million SDRs will need to be added by November 15 to comply with a measure taken by the IMF General Assembly. Including the next Spring Summit with that of the World Bank will be held from April 15 to 21 in Washington. Perhaps a great opportunity to find out more about the Madagascar issue. In order to dispel doubts and uncertainties.
Eric Ranjalahy