(Bloomberg) — Madagascar called for support from “friendly nations” to offset a decline in revenue following a political crisis on the Indian Ocean in which the nation’s president was deposed.
“The state budget faces real problems because of the decrease in state income,” Finance Minister Benja Razafimahaleo said in an interview on Tuesday in the capital, Antananarivo. While Razafimahaleo said revenue has dropped 20 percent, he declined to provide more specific figures.
The government plans to reduce “superfluous” expenses in an effort to ensure the country can finance imports of basic necessities including cooking oil, flour, dairy and petroleum products, he said.
Madagascar’s former President Marc Ravalomanana resigned last month following two months of protests by supporters of opposition leader Andry Rajoelina, in which at least 100 people died. The country has been suspended by the African Union and the 15-nation Southern African Development Community, while the U.S. has halted non-humanitarian aid.
Ravalomanana arrived in Ethiopia on Tuesday to meet leaders of the AU, and rejected Rajoelina’s installation as president, which the AU and the United Nations described as a coup.
“I’m the president of Madagascar,” Ravalomanana told Ethiopian Television in an interview broadcast late yesterday. “I never resigned. The international community knows that I am president of Madagascar.”
Ravalomanana said he feared for the safety of his family members who remain in the country.
‘Constitutional Normalcy’
In a statement on Tuesday, the AU said it would form an international contact group to coordinate diplomatic efforts for “the rapid return to constitutional order in Madagascar.”
Madagascar, the world’s fourth-biggest island and a former French colony, is home to about 20 million people. Rio Tinto Group, the world’s third-largest mining company, owns a $1 billion ilmenite project in the country. The company extracts titanium dioxide, a material used as a pigment in paint, from ilmenite ore. Rio said in November that output at the mine would be about 9 percent of global supply.
Exxon Mobil Corp., the world’s largest oil company, is exploring for oil in the country, while Total SA last year took a 60 percent interest in Madagascar’s Bemolanga license, where heavy oil has been discovered.
Madagascar in March had its long-term local and foreign currency sovereign credit ratings cut to B- from B with a negative outlook by Standard & Poor’s Ratings Services.
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To contact the reporters on this story:
Olivier Ramaro in Antananarivo via Johannesburg at [email protected]; Jason McLure in Addis Ababa via Johannesburg at [email protected].
