• IMF reaches preliminary deal to disburse $183 million to Madagascar

• Funding tied to programme reviews, targets infrastructure and reforms

• Agreement seen supporting recovery amid economic and political challenges

The International Monetary Fund said on Wednesday it had reached a preliminary agreement to disburse $183 million to Madagascar, pending agreement with the authorities and approval by its Executive Board.

The funding is tied to the third and fourth reviews of Madagascar’s programmes under the Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF).

In June 2024, the IMF approved the two facilities, totalling $658 million. The funding is intended to boost agricultural productivity, expand access to electricity, improve road infrastructure and strengthen governance.

Talks are taking place amid a challenging economic environment following Cyclone Gezani and the spillover effects of the war in the Middle East, which have disrupted activity and reduced fiscal space.

Madagascar’s 2025 budget deficit came in lower than expected, reflecting spending cuts and a shift in public investment. However, tax revenues underperformed, underscoring the need to accelerate reforms to boost domestic revenue mobilisation.

The announcement comes amid a political transition following a military takeover. The prospective disbursement is seen as a positive signal for the authorities and is in line with the government’s “refoundation” agenda, led by head of state Colonel Michael Randrianirina, which focuses on addressing urgent social needs and supporting economic recovery. The move may also reinforce investor confidence and support efforts to revive the economy.

The authorities plan to submit a revised budget in early May to support the recovery while strengthening public finances. Amid heightened uncertainty, the IMF stressed the need to reinforce contingency planning to preserve fiscal credibility.

The Fund also recommended maintaining tight monetary policy to contain inflation and allowing the exchange rate to act as a buffer against external shocks. It further called for reinstating the automatic fuel pricing mechanism to limit the budgetary impact of rising international prices.

The government expects economic growth of 4.8% in 2026, driven by five priorities: agricultural transformation and food sovereignty, energy transition, infrastructure development, human capital strengthening, and improved governance.

Ingrid Haffiny