By decree of 29 June 2026, the Malagasy government raised the guaranteed minimum wage (SMIG) by 14%, to be implemented in two stages: MGA 300,000 from March 2026, rising to MGA 315,000 from October. A step forward welcomed by unions, but falling short of their demands.
A Two-Stage Adjustment
The decree, signed on 29 June 2026, phases in the increase to allow businesses time to adjust. Since March 2026, the SMIG has been set at MGA 300,000 in the private sector for entry-level (category M1) and equivalent positions. From October 2026, this floor will rise to MGA 315,000, representing a total increase of 14% on the previous level.
Between Union Relief and Employer Concern
Trade unions had pushed for MGA 360,000, arguing that amount was « aligned with the rise in the cost of living ». While they « view this decision positively », the figure agreed is still nearly 14% below their original demand.
On the employer side, the Groupement des Entreprises de Madagascar (GEM) had warned that too rapid an increase could « weaken many businesses, particularly small and medium-sized enterprises ». The phased timeline is a concession in their direction.
An Economy Under Pressure
The increase comes as Madagascar targets 6% growth for 2026 (AfDB). The country is emerging from a period marked by inflationary pressures and a depreciating ariary. In parallel, the World Bank has committed $225 million to the PRODUIRE II project, boosting urban resilience in Antananarivo and Toamasina.
A Coverage Challenge
The measure primarily benefits the formal sector, which represents only a fraction of total employment in Madagascar. Analysis by La Vérité notes that the minimum wage hike « leaves out 95% of workers »—the majority active in the informal economy and subsistence agriculture.
Why It Matters
For French and Mauritian companies operating in Madagascar—in textiles, agri-food or services—this increase means a direct rise in payroll costs to factor into budgets. It also signals President Rajoelina's intent to address social pressure in a pre-electoral context. To watch: effective enforcement of the decree, which remains a challenge in rural areas. Source: Newsmada, Portage Salarial Madagascar, July 2026.