(English) Warnings for Malagasy Economy and People

Miala tsiny fa tsy mbola misy amin’ny teny malagasy ity lahatsoratra ity.

The International Monetary Fund (IMF) has concluded an in-country review of Madagascar’s economic situation with a warning that ‘outside shocks’ ‘cloud’ the country’s economic outlook.

While the international financial body, which last year stepped in to provide Madagascar with and Extended Credit Facility (ECF) and a Resilience and Sustainability Facility (RSF), both of which it believes can help the Malagasy economy stabilise and grow, issued few details, it is believed and likely that the major ‘outside shock’ to which it refers is the US and other governments withdrawing funding which had been pledged to organisations working in Madagascar, as well as the Malagasy government itself, to assist the country’s development.

The IMF, whose team led by Constant Lonkeng was in Antananarivo for a week to undertake the assessment, also noted worrying prospects for the year ahead.

Mr Lonkeng said: ‘Major shocks this year are clouding Madagascar’s macroeconomic outlook. Recent technical difficulties in the mining sector are compounding external shocks. Inflation is on a downward path but remains elevated: headline inflation stood at 7.9 percent (year on year) in July.

‘Spending commitments outpaced tax collection in the first half of the year.’

The team noted that work had already started on Madagascar’s 2026 Budget, and appeared to support what it described as the Budget’s focus on ‘domestic revenue mobilisation’.

It noted that it will provide a more detailed analysis when it returns later in the year, at which point it will also carry out the ECF and RSF’s third reviews.

The IMF’s engagement with Madagascar may or may not prove fruitful. At present, with the country having been on a long downward trajectory, wages falling and prices increasing, the ECF and RSF seem necessary, at least.

But inflation increasing and the economy taking further hits could be disastrous. Madagascar is the fourth-poorest country on Earth, and 90 per cent of Malagasy people live on or below the global poverty baseline, £2.22 per day.

Relying on (and increasing) domestic revenue would certainly be a positive for Madagascar, but it is also necessary, because at present no other option is available. And it is far from clear how quickly, and to what extent, that revenue can be generated.

In the immediate term, it falls to organisations like Money for Madagascar, with your help, to provide Malagasy men, women and children with the platform – including training, finance, and expertise – on which they can define the challenges which face them, and formulate and deliver the solutions to them.

We are working with Malagasy communities to help children who cannot live with their families reach shelter, food, clothing, clean water, healthcare, and the attention they need and deserve; help all children attend school and gain the maximum benefit from it, free from hunger, thirst and illnesses caused by malnutrition and dirty water; and help Malagasy families lift themselves from poverty and hunger while protecting and expanding the extraordinary Malagasy wilderness on which we all rely.

But the challenge ahead is real, and serious. Though we did not receive money from USAID or European governments, many other organisations did, and the loss they and the Malagasy government are facing will directly add to the challenges facing Malagasy communities.

We will continue our work, but we cannot do it alone.

Please stand with us, and let people you know – friends, family members, colleagues, and your community leaders and elected representatives – know what the situation is, and how together we can all help.