Estimates of resource requirements for the national recovery programme 0986-1990 )

Millions of US dollars

(i) Resources already mobilized

Dome s t i ca 11y 1 097.8

Externally

Subtotal 1 097.8

(ii) Resources planned to be mobilized

Domestically 4 406.5

Externally

Subtotal 4 406.5

(iii) Estimates of likely available reSources 5 504.3

(iv) Total estimated cost of programme 5 504.3

(v) Resource gap

E. Estimates of debt-servicing requirements (1986-1990) (in millions of US dollars)

Type of debt

Interest Principal

Total

Official creditors Private creditors Total

27. MADAGASCAR

A. Overall economic performance since 1980

Gross domestic product decreased by an average of 1.9 per cent a year over the period 1980-1984. However, a mild recovery in 1984, when GOP grew by 2.1 per cent over the previous year was recorded as a result of structural adjustment programmes. Allowing for population growth (2.8 per cent), per capita GOP fell by 4.5 per cent annually between 1980 and 1984. The primary sector grew at an average rate of 3 per cent a year, While the secondary sector experienced annual negative growth of around 6 per cent as a result of the fall in the value added of the construction sector. There was no change in the tertiary sector during the period under consideration.

After several years of deficits, payments position has improved in 1984, reflecting mainly improved weather conditions, cut in imports and an increase in coffee, cloves, chrome and graphite exports. The current transactions deficit as a percentage of GOP fell from 14.6 per cent in 1981 to 10.2 per cent in 1984.

Likewise, the budget deficit, which was 14.9 per cent of GOP in 1981, fell to 4.8 per cent in 1984. The inflation rate was only 9 per cent for 1984, whereas in 1981 and 1982 it had been 30.5 per cent and 31.5 per cent respectively.

At the end of 1984, the external debt amounted to $2,119.8 million, about

$1,326.4 million of which are contracted on soft terms. The debt-service ratio as a percentage of export s amounted in 1984, after rescheduling, to 33.0 per cent. Net resource flows declined from $561. 3 mi llion in 1981 to $318.0 mi llion in 1984.

B. Main areas of focus of the national recovery programme (1986-1990) The public investment programme for

production and infrastructure sectors in established as follows:

the the

period order

1984-1990 emphasizes of priorities has

the been

(a) The rural development sector:

maize, wheat, etc.) and export crop husbandry and fisheries;

programmes to increase production, irrigation

food crops (rice, projects, animal

(b) The infrastructure sector:

and

(c) Combating soil erosion.

reconditioning of main and feeder roads;

C. Highlights of policy reforms in support of the national recovery programme (1986-1990)

With a view to achieving the programme's objectives, the Government has taken measures to:

(a) Increase production by raising producer prices, particularly of agricultural products; liberalizing the prices of collection and marketing, bringing into existence a new and more liberal investment code and relaxing the administrative procedures for foreign trade;

(b) Strengthen public savings capacity by reducing the public finance deficit, improving the financial situation of public enterprises and privatizing their management;

(c) Mobilize outside resources through Paris Club.

D. Estimates of resource requirements for the national recovery programme 0986-1990 )

Millions of US dollars (i) Resources already mobilized

(ii)

(iiil (iv) (v)

Domestically Externally

Subtotal

Resources planned to be mobilized Domestically

Externally Subtotal

Estimates of likely available resources Total estimated cost of programme

Resource gap

46.3 67.3

76.0 97.1

113.6

173.1 287.7 872.0 585.3

E. Estimates of debt-servicing requirements (1986-1990) (in millions of US dollars)

Type of debt

Official creditors Private creditors Total

Interest 221.7 83.3 305.0

Principal 544.8 273.9 818.7

Total 766.5 357.2 1 123.7

28. MALAWI A. Overall economic performance since 1980

Malawi has an area of 118,484 km2, of which 24,208 km2 is occupied by lakes, and a population of 6.84 mi llion inhabitants, with a population growth rate of 3.1 per cent per annum. Agriculture is the mainstay of the economy, with the small-holder subsector growing mainly maize, ground-nuts, cotton and tobacco while the estate subsector produces tea, tobacco and sugar-cane. Between 1980

and 1984 GDP in real terms grew at an average rate of 1.2 per cent per annum.

This low growth rate was attributable to the disruption of the traditional railway routes to the ports, adverse weather condition in 1979-80 and the sharp deterioration in the country's terms of trade. As a result) Malawi suffered a severe drop in per capita income, increased inflation rates and serious imbalance in both its external and budgetary accounts.

External borrowing on commercial terms was sharply increased to maintain import levels required for production and maintenance of living standards while external debt mounted. As of 1984 external debt amounted to a total of $788 million, of which $482 million was concessiona1 and $306 million non-concessiona1.

The actual debt-service ratio amounted to 27.3 per cent in 1984. Net resource flows declined from $293.3 million in 1980 to $195.0 million in 1984.

has

The favourable investment climate for contributed greatly to the development of

both local the country.

and foreign investors

B. Main areas of focus of the national recovery programme (1986-1990)

The four main areas identified in the priority programme for economic recovery are:

(a) Agriculture: rural development; food security; agricultural research;

strengthening agricultural marketing networks and crop diversification;

(b) Other sectors supporting agriculture: search for alternative routes to the sea; development of small-scale industries; improvement of roads and rehabilitation of eXisting industries;

(c) Human resources development; and

access access

(d) Drought and desertification:

reafforestation, rural electrification and coal

the major mining.

components being

C. Highlights of policy reforms in support of the national recovery programme

<1986-1990 )

To increase small-holder productivity, attractive prices~ better agricultural marketing and input supply facilities, agricultural research and extension, credit services are provided. In the estate sector, steps are taken to upgrade management, increase access to credit and diversify production. In the industrial sector, emphasis is placed on relaxing the price control system and strengthening of institutions for export promotion. Measures have also been taken to i.mprove

the efficiency of parastata1s.

D. Estimates of resource requirements for the national recovery programme