The African Development Bank has approved a $68 million program to consolidate Madagascar's financial governance and attract greater private investment. This second-phase financing brings the cumulative program total to $136 million.
A Two-Tranche Concessional Package
The program is structured as two concessional loans: $27.2 million from the African Development Fund and $40.8 million from the Transition Support Facility, totaling $68 million. Combined with Phase 1, the cumulative envelope reaches $136 million (source: AfDB).
Tax Reform and Investment Attractiveness
A key pillar is tax administration modernization, targeting an increase in tax revenues from 10.5% to 12% of GDP by end-2026. The program also modernizes public-private partnership legislation to provide a more secure legal framework for foreign investors.
Energy and Governance: Two Strategic Pillars
The program aims to establish an independent electricity regulator and a National Sustainable Energy Fund — critical to mobilizing private capital in the energy sector. An anti-corruption strategy running to 2030 will strengthen budgetary transparency.
The AfDB notes Madagascar needs to mobilize $7.3 billion per year by 2030 to fund its development needs — achievable only with stronger institutions.
Why It Matters
This financing signals multilateral confidence in Antananarivo's reform path. For private investors hesitating to commit to Madagascar, the modernization of fiscal and PPP frameworks is a decisive signal. The island has the resources; it has lacked the institutions to unlock them.