The economic slump left by the Rajoelina – Rajaonarimampianina duet

AndryRajoelina and his chancellor of the checker Hery Rajaonarimampianina, used to passionately advocate good governance, or at least their understanding of what good governance is, namely: budget cuts, unpaid wages and allowances for officials or temporary staff, cut on public investments despite striking infrastructure deterioration, complete ignorance of the social sector ( closure of healthcare centers in rural areas, unpaid scholarships for students held abroad, sharp decline of the enrollment rate and the availability of basic sanitation… ). Yet, the duet keeps claiming an exemplary management of public funds while foreign financial support has been suspended.

Pierrot Botozaza, the transitional economy minister, set the tone when declaring that the political crisis causes a loss of $ 6 million per day to the country’s GDP, meaning about $ 2.2 billion in one year. No need to notice how huge the figures are for a developing country like Madagascar, does it?

When thwarting the electoral process back in May, the extension of his term in office must have not been Andry Rajoelina’s first concern. His 5 months long stay must have amounted to a loss of $ 900 million!

The Economy Ministry assumes that 4000 new people fall under the poverty line on each new day of Rajoelina’s rule. For the sake of preventing Lalao Ravalomanana, and to a lesser extent Didier Ratsiraka, from running the presidential race, the transitional leader has accordingly sacrificed 600,000 people on the altar of poverty. In contrast to this matter of fact, the new riches of the transition keep on brewing millions of dollars harvested from smuggling rosewood.

The state pays the bill
One Treasury dept. director, Orlando Robimanana, pointed at the ruling power’s led overextension of the state’s capacities. Fuel suppliers are being subsidized, the trade of electricity and water generates no revenue for the sake of keeping consuming prices steady. The politically motivated practice is an old trick part of the electoral showdown. Considering that the electoral showdown has been extending over the latest couple of years, no wonder that the financial situation has turned into a terrible mess. The JIRAMA company has to deal with losses amounting to Ar 20 billion a month, MGA 120 million MGA. Further action may be expected from 2014 on. Orlando Robimanana presents even worse balance sheets concerning fuel providers, namely Ar 85 billion conceded by the state during the mere first half of 2013. “Four and a half years of subsidies must be enough, mustn’t they?” he protested. He subsequently required genuine prices to be freely applied, in other terms an increase of 450 MGA / liter of SP 95 gasoline, coming up to a MGA 3920 gasoline consumer price, and MGA 3120 / l of diesel.
Orlando Robimanana denounced the preferential exchange rate conceded to these subsidized fuel providing companies which now buy each US-dollar for MGAb2000 although the genuine price reaches 2500 MGA. Bearing in mind that the market is as large as $ 360 million, the gap happens to be gigantic for the state.
Could action ever fail to be undertaken, this Treasury department directed warned that the gap would extend to Ar 373 billion by the end of the year. As if the situation was not yet tense enough as it is, the estimated tax revenues did not meet the expectation over the year’s first eight months. Ar 323 billion are missing, of which Ar 117.8 billion to Ar 205.9 billion from the expected taxes and customs.