> ## Content Index
> Fetch the complete content index at: https://businessoi.media/llms.txt
> Use this file to discover other available public pages before exploring further.

# [MADAGASCAR] Revised 2026 budget: Antananarivo unlocks investment and reforms taxation
- URL: https://businessoi.media/en/madagascar-budget-rectificatif-2026-antananarivo-accelere-ses-investissements-et-reforme-sa-fiscalite-en/
- Published: 2026-08-06T13:44:39.000Z
- Updated: 2026-08-06T13:44:39.000Z
- Description: Fiscal revenues -10% in Q1 then +6% in Q2 2026. Madagascar adopts a revised budget removing exemptions on imported rice and used clothing. Low disbursement rates remain the primary growth bottleneck.
- Author: Emmanuel TAOCHY
- Tags: Madagascar, Finances publiques, Clôture, #en

The Malagasy government has adopted a revised 2026 budget to correct a bumpy fiscal trajectory and unblock public investment. After a **10%** drop in fiscal revenues in Q1 2026 versus 2025, a **6%** recovery was recorded in Q2\. But the central challenge remains the chronically low disbursement rate on public investment projects.

## Uneven revenues, an emergency reform adopted

The first quarter of 2026 was marked by a significant contraction in Madagascar's fiscal revenues, hit by the economic disruption caused by cyclones **Fitia and Gezani**, as well as a surge in imports that weighed on the balance of payments. Q2 posted a 6% rebound versus the same period of 2025, signalling a recovery in economic activity.

To stabilise public finances, the government adopted a revised budget that removes tax exemptions on **imported rice and second-hand clothing** — a pragmatic move to broaden the tax base and reduce short-term reliance on external financing.

## The undisbursed investment gap

The most pressing structural problem remains the low execution rate for public investment projects. Roads, energy, industry: funds are often allocated but disbursements lag behind. According to Malagasy authorities, **2% of GDP** is lost every year simply due to inadequate road maintenance — degraded infrastructure that raises logistics costs, erodes competitiveness and discourages private investment.

Families affected by certain infrastructure projects are still awaiting compensation payments, revealing procedural gaps that slow down fund releases. This execution problem is not marginal: it directly conditions the effectiveness of multilateral financing allocated to the country, including World Bank funding.

## Why it matters

Madagascar targets **6% growth** in 2026 — a credible goal on paper, but entirely contingent on effective budget execution. For regional operators already positioned in Madagascar — including approximately forty Egyptian companies that recently signed a cooperation agreement with EDBM — the state's ability to unblock investments and honour its commitments has become a central decision criterion. The revised budget is a first signal, but the real test will be on-the-ground execution before year end.

*Sources: AllAfrica / L'Express Madagascar / African Development Bank*