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World Bank predicts low economic growth for Madagascar in 2022

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The World Bank has forecasted a gloomy and a lower economic growth rate for the island southern African country of Madagascar for 2022.

The World Bank’s prediction is, however, at variance with the Malagasy authorities forecast of a positive growth rate of 5.4% this year.

In the framework of the initial 2022 Finance Law released by the World Bank on Friday, the global bank estimates that the Indian Ocean nation’s economic growth for the year is not expected to go beyond 2.6% this year as against 4.4% it recorded last year.

Part of the World Bank report said that Madagascar’s economy “faces new threats from new episodes of COVID-19, a series of extreme weather events and the fallout from the conflict in Ukraine in early 2022.”

“But it is the war in Ukraine that will have the greatest impact on Madagascar’s economic development, due to the slowdown in demand from trading partners and the rise in oil prices, which is expected to lead to a deterioration in the trade balance and increasing pressure on public finances,” the report continued.

Also commenting on the outcome of the report, Idah Pswarayi-Riddihough, the World Bank’s Director of Operations for Comoros, Madagascar, Mauritius and Mozambique, noted:

“In the face of new shocks and uncertainties, Madagascar needs more than ever to undertake bold reforms to accelerate growth and build resilience.

“This is a necessity to reduce poverty in the years to come and avoid a growing backwardness compared to peer countries.”

As a fallout of the gloomy forecast, the World Bank which is a key financial partner of the country, has established a number of priorities that are highlighted as particularly urgent, including a clear strategy to accelerate the immunization of people living in vulnerable situations, in urban and tourist areas.

Parts of the strategies, according to Pswarayi-Riddihough also include the restoration of essential public services and connectivity infrastructure following the recent climatic shocks, strong measures to reduce food insecurity and stimulate national agricultural production, reforms in fuel and electricity pricing, a new impetus to stimulate access to broadband and digital services and more transparency and accountability in the public sector.

This World Bank report also highlights the importance of improving the performance of public schools following the continued deterioration of learning outcomes in recent years.

“Based on new analytical findings, the World Bank suggests a new approach to improving performance that includes measures to strengthen teacher selection and evaluation, salary and school grant management, appeal mechanisms, and local community participation,” Pswarayi-Riddihough added.

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World Bank predicts Mozambique economy growing at 5.7% on average

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The World Bank has predicted that the economic growth in Mozambique is expected to accelerate in the medium term averaging 5.7% between 2022 and 2024, as a result of demand recovery and economy benefits from the start of liquefied natural gas production this year.

In a report released Thursday, the World Bank said the start of LNG production at the offshore Coral Project and the expected resumption of other LNG projects would help spur the southeast African nation’s growth in the intervening year.

The World Bank said a three-year extended credit facility arrangement agreed by Mozambique with the International Monetary Fund (IMF) and budget support from other partners would further help to strengthen its economic recovery.

The IMF’s executive board had, in May, approved a $456 million program for the country, the first since the global lender suspended support to Mozambique six years ago.

However, the World Bank warned that risks remained for Mozambique’s growth, especially from rising import prices due to the conflict in Ukraine, a possible surge in COVID infection waves, and insurgency in the north.

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Nigeria, Algeria, Niger to revive Saharan gas pipeline talks

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The governments of Nigeria, Algeria and Niger Republic have held talks to revive a gas pipeline project across the Sahara which had been put on hold for over 40 years, with the potential opportunity for Europe to diversify its gas sources as the world faces a short fall as a result of the Russian-Ukraine war.

The three countries, represented by their various Petroleum Ministers, met in Abuja, Nigeria’s capital on Wednesday and resolved to set up a task force to revive the project and designated an entity to update the feasibility study.

A statement by Niger’s Oil Ministry after the two-day meeting stated that the Trans-Saharan gas pipeline project estimated at $13 billion, could send up to 30 billion cubic metres a year of supplies to Europe.

The statement added that the energy ministers of the three countries will meet again in Algiers at the end of July to “validate the proposals of the newly installed task force.”

“The pipeline should allow Europe to diversify its sources of natural gas supply but also allow several African states to access this high value energy source,” the statement said.

“With a length of 4,128 kilometres (2,565 miles), the pipeline would start in Warri, Nigeria, and end in Hassi R’Mel, Algeria, where it would connect to existing pipelines that run to Europe,” it said.

The gas pipeline idea was first proposed more than 40 years ago with an agreement signed between the three countries in 2009, but progress stalled stalled following a lack of follow through by the countries.

Earlier this month, Nigeria also took steps to revive another gas pipeline project that would pass through West Africa, Morocco to Europe.

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