The Board of the African Development Bank (AfDB) has approved a $68 million financing package for the Republic of Madagascar to support the second phase of the Financial Management and Economic Resilience Support Programme, according to a press release. The package combines a $27.2 million concessional loan from the African Development Fund with a $40.8 million concessional loan from the Transition Support Facility. Together, the two-phase programme now totals $136 million, ranking among the Bank’s most significant budget support commitments to the country. The funding aims to strengthen financial governance, broaden fiscal space, and attract investment. It positions Madagascar to pursue deeper structural reforms.
The approval builds on the first phase, which delivered measurable gains for Malagasy households and businesses. Among its achievements is a modern tax administration system now operational nationwide. A national anti-corruption strategy was also introduced to anchor accountability through 2030. These reforms set the foundation for the next stage of work. The second phase will deepen and extend these results.
The new programme focuses on reforms in public financial management and private sector competitiveness. It supports the establishment of an independent electricity regulator and a new National Fund for Sustainable Energy. Direct financing will go to off-grid and rural electrification in areas where nearly 80 per cent of Madagascar’s poor live. A modernised public-private partnership law has been introduced to give private investors in clean energy and infrastructure legal certainty. Tax revenues are projected to rise from 10.5 per cent to 12 per cent of Gross Domestic Product (GDP) by the end of 2026.
The reforms aim to widen Madagascar’s fiscal space and bring economic opportunity to underserved regions.
“Madagascar has demonstrated the political will and institutional capacity to implement meaningful reforms under difficult circumstances,” said Adam Amoumoun, the African Development Bank’s Country Manager for Madagascar.
He added that the programme “consolidates those gains and opens the door to a more resilient, inclusive, and transparent economy—one that works for all Malagasy people.” His remarks underscore the Bank’s confidence in Madagascar’s reform trajectory. The country’s engagement remains central to the programme’s success.
The extension comes as Madagascar’s new government, formed in March 2026, has reaffirmed its reform commitments. Engagement from multiple development partners is supporting this agenda. The African Development Bank’s approval adds financing to this broader effort. The programme is expected to consolidate fiscal and governance gains while opening new investment channels. It marks a significant step in Madagascar’s path toward economic resilience.
