MAXIMIZING FINANCE FOR DEVELOPMENT STORIES MADAGASCAR Improving Farmers’ Incomes The government of Madagascar, with World Bank support, is helping rural herders and farmers improve incomes by improving veterinary Highlights of World services and developing new road infrastructure. IFC is also support- Bank Group Support ing a local agribusiness firm, BoViMa, and the country’s first modern IDA provided a $50 million loan in feedlot and abattoir, which will increase meat productivity, improve 2014 to support sustainable agribusiness the livelihoods of more than 20,000 farmers and herders, and development in southern Madagascar, directly employ 200 people. Smallholder farmers in BoViMa’s supply and in 2017 a $53 million loan to tackle chain will also receive technical assistance through an IFC-supported constraints in agriculture value chain policy, governance, knowledge and tech- outgrower program. nology transfer, land tenure, food safety, and road infrastructure. Development Challenge Three-quarters of Madagascar’s population lives in extreme poverty, and 80 percent of IFC and the private sector window of the them are dependent on agriculture. Although Madagascar has excellent conditions for Global Agriculture and Food Security cattle and goat production—including the absence of major diseases, good climate, Program (GAFSP) are providing a four- and cost competitiveness—inadequate veterinary services and infrastructure limit year advisory program to help a local economic opportunities and exports. The country has the potential to earn significant agribusiness, Bonne Viande de Mada- foreign exchange receipts from cattle and goat exports. The government and the gascar (BoViMa), build a feedlot and an World Bank Group are jointly working to improve livestock management and create abattoir and strengthen its supply chain. access to export markets. IFC and GAFSP plan to follow up with a $7 million investment in BoViMa. The MFD Approach The government deemed it essential to involve the private sector in the livestock sector value chain. The World Bank is working with the public sector and private businesses to improve veterinary services and sanitary standards. The International Finance Corporation (IFC) will help transform the sector through advisory ser- vices funded by GAFSP to BoViMa. Government support for veterinary services and critical infrastructure, along with additional private sector investments, is expected to create a $300 million meat exports market in the long term. Photo © Fireflies Building effective services thousands of local farmers, which in turn benefits the local community by increasing farmers’ incomes and connecting The International Development Association (IDA) provided them to regional and global meat markets. Besides the advi- two loans to assist sector-wide binding constraints. The sory program, IFC and GAFSP are planning a $7 million first technical assistance project in 2014 tapped into a $50 investment in BoViMa. million IDA credit that has helped the central and regional administrations promote sustainable agribusiness develop- Complementing IFC’s initiative, the World Bank will ment, including potential support to procure fodder for an support the training of veterinary staff and finance the export-oriented abattoir in the Anosy and Androy region in acquisition of laboratory equipment by an internationally southern Madagascar. The subsequent $53 million project accredited private sector laboratory, while the German devel- that started in 2017 is addressing agriculture value chain opment agency, GIZ, is working with local communities on policy and governance issues, technical capacity building, the goat and ruminants value chains. land tenure, food safety, accessibility to veterinary services, and access to infrastructure such as roads for farmers. The Meeting targets project is helping provide quality assurance services through It is expected that by 2021, the BoViMa abattoir and feedlot the training of veterinary staff and the funding of laboratory will establish the company as a world class meat export equipment for certification mechanisms, among other business that is able to drive the industry in Madagascar initiatives. and demonstrate best practices in production efficiency, environmental sustainability, and animal welfare. BoViMa Modernizing the agribusiness sector will directly employ 200 people in Fort Dauphin, a remote To modernize standards of commercial meat producers and part of the country. It will also provide support to more meet export requirements, IFC and GAFSP are providing than 20,000 local herders and farmers, improve small holder advisory services to help BoViMa establish Madagascar’s farmers’ agricultural practices, and diversify their incomes. first modern integrated feedlot and abattoir. The four- Through IFC’s advisory support, smallholder farmers year advisory program will help BoViMa improve animal in BoViMa’s supply chain will receive technical support husbandry in southern Madagascar. It will also strengthen through a new outgrower program. Ongoing World Bank the company’s supply chain for animal feed (such as maize, technical assistance will seek ways to enable herders to access cassava, grass, and sweet potato) to be sourced from local improved veterinary services and contribute to create new farmers. This will also create a reliable feed grain market for export markets for Madagascar’s zebu and goat products. “A project of this standing will totally change and improve the economic and social landscape of the Anosy and Androy regions. A real investment from the private sector, with the support of the authorities and donors, to leave a beautiful legacy for future generations”. —Danil Ismael, owner of BoViMa 03/2018 WHAT IS MFD? Achieving the Sustainable Development Goals to end extreme poverty by 2030 will require about $4.5 trillion annually, far more than multilateral development banks or donors can provide by themselves. To face this challenge, the World Bank Group adopted the MFD approach, which entails working with governments to crowd in the private sector while optimizing the use of scarce public resources. This approach is guided by the Hamburg Principles adopted by the G20 in 2017 and builds on the substantial experience across the institution. www.ifc.org www.worldbank.org www.miga.org