Madagascar: AfDB strengthens industrial, financial sectors with 14 million euros

31 Octobre 2020

Abidjan, Cote d'Ivoire, October 31 (Infosplusgabon) - The African Development Bank (AfDB) has approved the Industrialization and Financial Sector Support Project (PAISF), with a loan of approximately 14.52 million euros (UA 12.08 million), through the African Development Fund, the Bank's concessional rate lending window.

UA is the official currency for AfDB projects. 1 UA=1 SDR (International Monetary Fund Special Drawing Rights). The loan was approved on Wednesday, 28 October, 2020.

In direct support of the Plan Emergence Madagascar, the PAISF is oriented towards the industrial sector, considered essential to strengthen Madagascar's resilience and to significantly reduce poverty through the creation of decent jobs and the promotion of investment, according to the media channel of the AfDB.

It said that the industrialization is a driver of sustainable development and a key strategic option.

The Covid-19 crisis, which hit African economies hard, demonstrated the importance of an industrial strategy taking into account the coverage of domestic demand for food products in order to guarantee the safety of populations.

According to the bank, the health crisis has sharply raised the urgent question of food security in African countries. The project will notably support the post-COVID recovery plan developed by the authorities.

On the other hand, the PAISF emphasizes the role of the financial sector, to which access must be facilitated for small- and medium-sized enterprises to promote their integration into industrial value chains.

It also underlines the importance of a training system adapted to the needs of the labour market.

The project aims to meet the specific needs of the Malagasy industrial sector, in accordance with one of the Bank's five strategic priorities called the "High 5", namely the industrialization of the continent. Its objective is to transform Madagascar’s industrial sector to make it the main engine of growth and the creation of decent jobs, opening up opportunities for the most vulnerable, especially women and young graduates.

In its implementation, the PAISF should promote the conditions for private investment in Madagascar's manufacturing sector, especially in sectors where the country has comparative advantages such as textiles and agrifood.

The project could help accelerate the development of "industrial emergence zones" (ZEI) which will capitalize on these comparative advantages, develop value chains with a view to aligning with the Continental Free Trade Area and attracting international investors.

In its approach, the PAISF will support regional industrialization on the "one district, one factory" model, adopted in Ghana for inclusive industrial development.

The project will facilitate the creation of a long-term viable public-private partnership (PPP) fund to better encourage the private sector to become involved in infrastructure development.

In addition, the National Industrial Development Fund (FNDI) will provide financial assistance to Malagasy's SMEs while supporting their integration into the industrial value chain.

The Malagasy State will be the main beneficiary of PAISF by strengthening the institutional capacities of structures in charge of industrial development, promotion of private investments, including structures in charge of PPP.

The project will also benefit SMEs, which will benefit from a more favorable institutional framework for investment and better access to finance. It will also benefit women and young entrepreneurs supported by the FNDI.

PAISF will benefit the entire population through the positive effects of industrial development and job creation, fostered by investments in the sector, as well as facilitate regional integration by promoting regional investments in Madagascan ZEIs, particularly from Mauritius and South Africa in the textile and agrifood sectors.

"This project complements other Bank operations underway in Madagascar, in particular the Corridor Development and Trade Facilitation Project and the Agro-Industrial Processing Zone Development Project in the Southern Region.

West of Madagascar (PTASO), explained Mr. Mohamed Cherif, the Country Manager of the Bank in Madagascar.

The PAISF is aligned with the country strategy (CSP 2017 2021), in particular its pillar 2 (Support for the transformation of agriculture and the development of industry) as well as the priority of the Bank "Industrialize Africa (2016-2025) and its long-term strategy (2013-2022).

FIN/INFOSPLUSGABON/VVC/GABON2020

© Copyright  Infosplusgabon