Prime Minister Mamitiana Rajaonarison has sounded the alarm: budget execution for infrastructure investments is "very weak" in the first half of 2026. Insufficient disbursement rates are jeopardising the development projects that Madagascar urgently needs.
Administrative bottlenecks paralysing public action
According to Finance Minister Dr Herinjatovo Aimé Ramiarison, fund disbursement procedures are overly complex and slow. A concrete illustration: compensation payments owed to residents affected by three-year infrastructure projects can take the entire project duration to process, effectively blocking construction from the very start.
The most affected sectors are roads and transport, energy and industrial development — three pillars critical to the country's economic competitiveness. The cost of this inaction has been quantified: poor road maintenance costs Madagascar roughly 2% of GDP in annual economic losses.
Emergency supplementary budget adopted
Against a deteriorating backdrop — cyclones Fitia and Gezani weighed heavily on public finances, compounded by rising oil prices — the government adopted a supplementary finance law. It reintroduces import restrictions and removes certain tax exemptions, including on rice, to preserve fiscal balances.
Why it matters
Madagascar is targeting 6% growth in 2026, but this goal can only be achieved if public investments materialise on the ground. In a country where subsistence agriculture remains dominant, road and energy infrastructure are direct levers for economic transformation. International partners — the IMF and World Bank — as well as private investors are closely watching the government's capacity to unlock these funds.
Source: allAfrica / 2424.mg, August 3, 2026.