Madagascar is going through one of the most turbulent periods in its recent political history. After weeks of protests over water and electricity shortages, a faction of the army announced it had seized power in Antananarivo. The takeover, led by Colonel Michael Randrianirina, ushers in a period of deep uncertainty. The coup comes as the country was trying to strengthen fiscal stability under IMF oversight, amid limited public funds and restricted access to foreign financing. To discuss the roots of the crisis and its economic fallout, Ecofin Agency interviewed Jaona Ravaloson, Madagascar’s former ambassador and now head of Arborescence Capital, an investment advisory firm. He discusses the roots of the unrest, the risks of financial isolation, and the steps needed to restore stability.

Ecofin Agency: How would you describe the sequence of events that led to the military takeover?

Jaona Ravaloson (JR):  It’s the result of fatigue and political burnout. The former president first came to power in 2009 after a coup and stayed until 2014. There was then a period when he was barred from running, and an interim president oversaw the transition until 2018. He had been active in politics for many years, and public fatigue had set in; the momentum was gone. Good intentions may have existed at times, but they were never put into action because of weak competence and, probably, poor ethics.

That kind of failure always shows in a country’s condition. Wealth creation was concentrated in the hands of a small ruling elite, while the rest of the population grew poorer. That can last for a while, but eventually it blows up. Corruption and self-enrichment stalled development, as most projects were neither useful nor aligned with people’s needs. Take the funicular project, for instance, a flashy project with no real purpose despite huge spending.

At some point, all this became too obvious and intolerable. That’s what pushed young people, especially Generation Z, to take action. They were the most affected by the absence of clear policies, long-term vision, and real development plans. At first, their demands were simple: electricity and water. For the first time in the country’s history, people took to the streets not to demand political freedoms, but basic necessities such as water, electricity, and infrastructure that had never materialized.

Usually, protests focus on free speech, human rights, and democracy. This time, the protests exposed failures in development, public services, and infrastructure. Other demands followed: education, health, and jobs. Young people had no prospects, no job creation, no industrial policy, and no economic projects capable of absorbing them into the workforce.

All of this can be contained for a while, maybe two, three, or five years, but eventually, it explodes.

How do you see the military’s role in this transition? Are they guardians of stability or a political actor in their own right?

It all began with youth-led protests that were initially suppressed. At some point, the security forces could no longer contain the demonstrations, and part of the army decided to side with the protesters.

Meanwhile, the president, instead of seeking a peaceful resolution or trying to defuse the crisis, fled the country with his aides. When a head of state leaves the country like that, it creates a power vacuum at a time when the streets were already volatile, not only in Antananarivo but in several other cities.

Meanwhile, the president, instead of seeking a peaceful resolution or trying to defuse the crisis, fled the country with his aides. When a head of state leaves the country like that, it creates a power vacuum at a time when the streets were already volatile, not only in Antananarivo but in several other cities.

The president justified his departure by saying his life was in danger. But a leader facing popular protests does not flee; he stays and takes responsibility. In this case, he chose to leave. Amid the power vacuum, someone had to step in to prevent chaos. In that context, the military assumed control of the country.

It’s important to note that what happened was not a coup d’état in the traditional sense. A coup usually means a power grab from within the palace. Here, it was a popular movement that grew out of legitimate protests over government failures. Those demands were poorly understood and mishandled. For about ten days, there was a brutal crackdown, and young people were killed. Confronted with this, part of the army refused to keep firing and sided with the people. The president’s departure then created a vacuum that the military temporarily filled while awaiting a new governing structure.

You said the president fled instead of staying to deal with the crisis. By then, wasn’t it already too late to calm things down?

I can’t say if it was too late or not. He simply made that decision, which no one expected. Everyone was hoping for a way forward, some dialogue, or recognition of the protesters’ demands. That was the point of the pressure being put on him at the time.

Also, leaving the country like that is not part of Madagascar’s political tradition. If you know the country’s history, crises are frequent, but they usually last a long time because those in power do not give up control so quickly. Seen from that angle, this crisis was relatively short, about three weeks, almost an exception. The crises of 1972, 1975, 1990-1991, 2002, and 2009 all lasted much longer.

A leader who stays in power and does nothing is also very damaging. But he could have chosen to open dialogue from the start instead of cracking down. He could have listened to the demands, considered changing the government, and brought in the different groups that had long been seeking a say in the process.

Despite its challenges, Madagascar had undertaken several promising reforms that, for a time, were praised by institutions such as the IMF, which disbursed $107 million to the country in July. What message does this crisis send to international partners and foreign investors?

First, it’s important to understand that international organizations, donors, and financial institutions such as the IMF and the World Bank always speak in diplomatic terms. You have to read between the lines. They never openly criticize leaders because they still have to work with them. I call this the “pilot in the cockpit” problem. Every country needs someone at the controls, and whatever their competence or popularity, international institutions have no choice but to deal with whoever holds power.

When the IMF says a country is “on the right track,” it is simply using diplomatic language. But behind those statements, one key indicator matters: how much of the allocated funding the country actually manages to use. In Madagascar’s case, that absorption capacity is very low.

If the country had been governed with competence and integrity, without corruption or self-enrichment, it could have attracted five to ten times more funding.

If the country had been governed with competence and integrity, without corruption or self-enrichment, it could have attracted five to ten times more funding. Today, the two ongoing IMF programs barely total one hundred million dollars. What can be done with one hundred million dollars in a country of thirty million people, eighty percent of whom live below the poverty line? These are the bare minimum amounts needed to prevent total collapse.

In reality, Madagascar has never fully benefited from the support of the IMF, the World Bank, or the European Union because of weak governance. The same is true for private investors. I advise some of them, and most hesitate to come because corruption, lack of transparency, and administrative instability make the business climate difficult.

If the current transition succeeds in cleaning up governance, to “clear out the Augean stables,” as the saying goes, it could reassure donors and attract private investors. International institutions would be eager to work with a government committed to fighting corruption, and investors could operate without interference or pressure. This could even help restore a healthier economic climate.

However, we should also be careful with the language we use. When people talk about a “coup d’état,” it immediately triggers caution among partners. Yet this is not a coup d’état in the traditional sense. I hope the African Union, SADC, and the United Nations will take a nuanced view, without dismissing a movement that is deeply rooted in the country’s social and generational realities.

What do you see as the immediate economic priorities for the transitional government?

The priority is to tackle the root causes of the crisis, namely the legitimate demands of Generation Z. The hard truth is that the electricity shortage is not the result of a temporary outage but of a lack of infrastructure. That is the real tragedy.

The challenge facing the new government is immense. The problems with electricity and water cannot be solved in three months. Dam projects that should have been advancing for years have been stalled. They will not produce energy in the short term. In the meantime, one option could be to use diesel generators, though this would be costly both financially and environmentally.

This creates a risk of frustration, since the long-term solution will take time and the short-term one will be expensive. The situation is made worse by the fact that the government includes no representatives of Generation Z, who started the movement. It consists mainly of seasoned political figures from the opposition, and the absence of young people could fuel new frustrations.

The government must quickly present a clear plan with concrete steps and deadlines. This would help calm tensions and show that the problems of electricity, water, education, and employment can only be resolved in the medium term. It also needs to be transparent and adopt, if you will, a methodical approach.

Donors and international organizations can play an important role. They must understand that the current situation is not the same as under the previous regime and that the new government, if it proves ethical and credible, deserves support.

This public awareness effort is essential to prevent another wave of discontent. Donors and international organizations can play an important role. They must understand that the current situation is not the same as under the previous regime and that the new government, if it proves ethical and credible, deserves support.

The country needs international assistance and a renewed sense of confidence from private investors. The message must be clear: corruption and self-enrichment are over. Investors need to know they can invest freely and create jobs, especially in mining, industry, and agriculture.

The government must also promote partnerships between foreign investors and local businesses, since the Malagasy private sector was sidelined under the previous regime. It needs to be brought back to the center of economic activity.

Finally, the financial system must be reformed. Today, it is focused on a few large clients in major cities and does not contribute to national development. Local financial resources must be more effectively tapped and combined with international funding. This will take time but is crucial for a lasting economic recovery.

Do you think Madagascar has what it takes to achieve a lasting economic recovery?

Yes, absolutely. As I mentioned, the country’s resources were not efficiently managed under the previous regime. And when they were used, it led to problems such as rosewood and gold trafficking and illegal operations that bypassed official channels.

Madagascar has substantial resources. We simply need to manage them more effectively, plan their financing, and, as I mentioned, reform the financial system. This also requires stronger cooperation between foreign partners and local businesses.

The biggest challenge lies with young people. They need to be able to find their place in a functioning economy, whether through entrepreneurship or stable jobs

If governance becomes stricter and more ethical, the country can achieve lasting development. Not in isolation, but through international partnerships, since there are many global resources available. The world is ready to invest as soon as trust is restored.

The biggest challenge lies with young people. They need to be able to find their place in a functioning economy, whether through entrepreneurship or stable jobs. And this issue goes beyond Madagascar; it affects the whole of Africa. Each year, a huge number of young people enter the job market. We must give them the tools to find work or start their own businesses. That is the key to future stability.

Interview in French by Louis-Nino Kansoun, 

English Adaptation by Mouka Mezonlin