The financing includes $100 million under the Extended Credit Facility and $55 million through the Resilience and Sustainability Facility.
The IMF approved the disbursements after completing the combined third and fourth reviews of Madagascar’s 36-month programmes.
Madagascar is undergoing a political transition following protests linked to persistent electricity outages and water shortages. Economic pressures have been compounded by tropical cyclones and the effect of the Middle East conflict on global oil prices.
Economic growth for 2025 was estimated at 3.1%, down from an earlier projection of 4%. Growth is forecast to recover to 3.8% in 2026, supported by cyclone reconstruction and the government’s economic recovery plan.
However, the current account deficit is expected to widen from 6% of gross domestic product in 2025 to 8.3% in 2026 because of higher oil prices, reconstruction imports and damage to mining operations. “The Republic of Madagascar is undergoing a political transition at a time of heightened vulnerability,” IMF Deputy Managing Director Nigel Clarke said.
“These developments have exacerbated policy trade-offs and further underscored the need for a long-term view in public policy.”
Programme performance was broadly satisfactory, although tax revenue fell considerably below expectations.
The government missed the June 2025 primary balance target but subsequently introduced corrective measures and met all quantitative targets for December.
Clarke called for stronger tax collection, improved customs administration and fewer tax exemptions to create room for social and growth-supporting expenditure.
A recovery plan for state-owned electricity and water company JIRAMA should be implemented rapidly to improve services and reduce demands on the national budget.
The IMF also called for full implementation of automatic fuel pricing by January 2027, accompanied by targeted support for vulnerable households. “A full application of the automatic fuel pricing mechanism by January 2027 will help redirect scarce public resources towards education, health and social protection,” Clarke said.
Madagascar has adopted the first national green budget and a National Climate Finance Strategy, although some climate reforms experienced delays.
The central bank should remain prepared to tighten monetary policy if inflation persists, while maintaining exchange-rate flexibility to absorb external shocks and protect reserves.
The IMF also urged Madagascar to implement recommendations from the governance diagnostic assessment to strengthen transparency and complement the national anti-corruption strategy.
–IMF/ChannelAfrica–
