- IMF staff has reached staff-level agreement with Madagascar on the Second Reviews of the country's Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF).
- A swift adoption and implementation of a recovery plan for JIRAMA, the public utilities company, will help improve the supply of electricity and water, reduce production costs and protect the public purse.
- Heightened global uncertainty puts a premium on contingency planning to preserve budget credibility on the one hand and let the exchange rate play its shock absorber role for external viability on the other hand.
Washington, DC: An International Monetary Fund (IMF) team, led by Constant Lonkeng, visited Antananarivo during April 2–14, 2025 to hold discussions on the Second Reviews of Madagascar's economic program under the Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF) arrangements, approved by the IMF Executive Board in June 2024.
At the end of the mission, Mr. Lonkeng issued the following statement:
"IMF staff and Malagasy authorities have reached a staff-level agreement on policies to complete the Second Reviews of Madagascar's 3-year ECF and RSF. Pending completion of some actions and subject to approval by the IMF Executive Board, Madagascar will receive a disbursement of SDR 36.66 million (about $51 million) under the ECF arrangement and SDR 40.73 million (about $57 million) under the RSF arrangement.
"Performance improved gradually over the first half-year of the program—all but one end-December 2024 quantitative targets were met. The fiscal deficit was lower than programmed due to spending restraint, with tax collection in line with expectations, a performance that has been extending into 2025. The authorities have re-iterated their commitment to domestic revenue mobilization and spending prioritization. They are advancing their reform agenda under the ECF and RSF, with initial achievements in public financial management, disaster risk management, and carbon storage mechanisms.
"Heightened global uncertainty puts a premium on contingency planning to preserve budget credibility on the one hand and let the exchange rate play its shock absorber role for external sustainability on the other hand. The central bank should monitor closely second-round effects from recent shocks and stand ready to raise its policy rates to keep inflation on a downward path.
"The mission took note of the ongoing development of JIRAMA's recovery plan and related discussions in Cabinet. A swift adoption and implementation of the plan—once finalized—will help improve electricity and water supply, reduce production costs, and limit calls on the State budget. A continued application of the automatic fuel pricing mechanism will release space to meet Madagascar's large development needs. In this context, the IMF team is encouraged by the rollout of solar kits in rural areas. This, together with other well-targeted compensatory measures—e.g., leveraging the unique social registry—will help cushion the impact of kerosene price hikes on the vulnerable as the fuel pricing mechanism is implemented.
"The mission welcomed the recent adoption of a national anticorruption strategy and encouraged the authorities to move swiftly with its implementation to foster accountability. Transparency in public finances, including the process for channeling national resources to the Malagasy sovereign wealth Fund and their use, will help gauge "value-for-money"—which becomes even more relevant considering the secular decline in official development assistance to which Madagascar is highly dependent. Moreover, the development of a homegrown action plan for implementing key recommendations from the IMF governance diagnostic—that is currently being finalized—should support Madagascar's fight against corruption and enhance governance and the rule of law, consistent with the State's General Policy.
"The team met with his Excellency President Andry Rajoelina, Prime Minister Christian Ntsay, Minister of Economy and Finance Rindra Rabarinirinarison, Minister of Energy Olivier Jean-Baptiste, Minister of Mining Olivier Rakotomalala, Minister of Environment and Sustainable Development Max Fontaine, Minister of Agriculture and Livestock François Hajarison, Minister of Population and Solidarity Aurelie Razafinjato, Minister of Tourism Viviane Dewa, Central Bank Governor Aivo Andrianarivelo, other senior government officials, the civil society, university students, the donor community, the banking association, the Chamber of Commerce of Antananarivo, the business association and other private sector representatives.
"The IMF team would like to thank the Malagasy authorities and various stakeholders for their cooperation and candid discussions during the mission."
