Madagascar to Revive Economy Without Foreign Aid, Official Says

SFGate

Oct. 7 (Bloomberg) -- Madagascar's government plans to revive economic growth next year without resorting to loans or grants from abroad, said the cabinet director of the Finance and Budget Ministry, Hugues Rajaonson.

The government has "its own resources to make the economy work," Rajaonson said in an interview in the capital, Antananarivo, yesterday. "We don't need one dollar from abroad or any of their help in how to manage our economy. We have the same diplomas as them."

Madagascar was suspended from the African Union and had all non-humanitarian aid cut after the mayor of Antananarivo, Andry Rajoelina, ousted his predecessor President Marc Ravalomanana last year with the help of the military. Foreign aid previously accounted for about two thirds of fiscal spending. The IMF is withdrawing its representative from the Indian Ocean island until the political crisis is resolved.

The government can fund its spending through tax revenue, Rajaonson said, without giving details. In September, the budget for all ministries was cut by 40 percent.

Madagascar's economy will contract 2 percent this year, the only African economy to shrink, according to forecasts by the International Monetary Fund. The government estimates expansion of 0.8 percent.

"We have a strategy but we are not going to tell it to anyone, even the World Bank," Rajaonson said. "We have nothing to see until we do the budget," which should be published by Jan. 3, he said.

--Editors: Philip Sanders, Ana Monteiro

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