Madagascar: US$22 Million for Agricultural Rehabilitation Project
Tunis, 3 December 2008 – The Board of the African Development Bank (AfDB) Group on Wednesday, December 3, 2008, in Tunis approved 15 million Units of Account (UA*), equivalent to US$ 22 million supplementary loan to finance the construction of a new water supply structure at the Lower Mangoky Irrigation Area Rehabilitation Project in Madagascar.
The Lower Mangoky Irrigation Area Rehabilitation Project (PRPBM), approved by the Bank on 20 October 1999, became effective on 28 September 2000. It will be completed on 31 December 2008. The water supply system which was built in 1961 had deteriorated, prompting repairs in 1998, 2000, 2004 and 2006. The water point suffered heavy damage from Cyclone Gafilo in 2004. Following various supervision missions, the Bank and the Malagasy government came to the conclusion that the only lasting solution to securing production on the area would be to build a new water supply structure.
The supplementary loan, from the African Development Fund (ADF), the concessionary arm of the AfDB Group, will be used mainly for the construction of the new water supply structure for irrigation in line with a programme to increase rice production.
The initial project rehabilitated an area of about 5,000 ha. It provided substantial support to farmers and their associations in terms of production and organization. Under the project, 5,032 land titles were issued, 1,804 of which were distributed to the farmers. The project put in place a credit scheme through a micro-finance institution, which provides diverse credit services to farmers of the area with fairly encouraging results (in 2007, 1,200 farmers benefited from it with a recovery rate of about 98%).
This support has helped to improved rice yields, which, in 2007, averaged 6 t/ha during the season, and 4.5 t/ha off-season, as against a target of 3.5 to 4 t/ha estimated at project appraisal. The average output for the past three years was 35,000 tonnes of rice, with an estimated at 25,000 tonnes surplus marketed in Tuléar town.
The reconstruction of the new water supply structure will help to sustain these gains. It will also enable the country to undertake further extensions of the irrigation area in order to strengthen food security in the country.
The cost of the reconstruction is estimated at UA 16.432 million (MGA 43,617million). The ADF loan will cover 91.3% of costs. The Malagasy government will provide the remaining UA 1.432 million or 8.7% of the entire cost.
Bank Group operations in Madagascar started in 1977. To date, the institution’s cumulative commitment in the country amounts to US$ 1.082 billion in 73 operations.
* UA 1 = US$ 1.48797 = MG 2,697 as at 03/12/2008