IMF says approves $305 mln credit for Madagascar

NAIROBI (Reuters) - The International Monetary Fund (IMF) has approved an equivalent to $304.7 million in financial assistance for Madagascar under a 40-month Extended Credit Facility (ECF) arrangement to help shore up its economy, the fund said. The IMF and international donors broke ties or cut aid to the Indian Ocean island nation after a coup in 2009, but resumed them after a peaceful presidential election in late 2013. The IMF said in a statement late on Thursday of the amount, about $43.5 million was immediately available to Madagascar. "The new arrangement for Madagascar ... aims to reinforce macroeconomic stability and promote sustainable and inclusive growth," it said. "Weak revenue collections, substantial low-priority spending, and the need for strengthened economic governance all pose challenges to medium-term economic development." Madagascar's economy has been struggling since the 2009 coup which also scared off foreign investors. The country is one of the world's poorest, despite its reserves of nickel, cobalt, gold, uranium and other minerals. The IMF said it had trimmed the country's economic growth forecast for 2015 to 3.1 percent - from a previous 3.2 percent projection - compared with 3.3 percent in 2014. (Writing by George Obulutsa; Editing by Gopakumar Warrier)