Regulating the Country’s Debt Policy

As part of the 2026 Amending Finance Bill, the Malagasy government has decided to limit its recourse to external financing to a ceiling of 12,759 billion ariary.

This measure aims to regulate the country’s debt policy while guaranteeing the resources necessary to finance development projects and public spending.

According to the provisions presented by the government, this amount represents the maximum sum that Madagascar can borrow from foreign partners, particularly international financial institutions such as the World Bank, the International Monetary Fund (IMF), and the African Development Bank (AfDB).

At the same time, the ceiling for domestic debt has been set at 3 trillion ariary. These domestic loans are generally contracted on the national financial market through local banks and Treasury bond issuances.

The authorities emphasize that Madagascar’s external debt remains largely comprised of concessional loans, granted on favorable terms with low interest rates and long repayment periods. At the end of 2025, the central government’s outstanding external debt was estimated at over 27.4 trillion ariary, or approximately $6.18 billion. More than two-thirds of this debt is held by multilateral partners.

This strategy reflects a commitment to preserving the sustainability of public finances while continuing investments in infrastructure, energy, transportation, and social services. Although recourse to external financing remains essential to support economic growth, the government seeks to keep the risk of over-indebtedness at a level deemed moderate by international financial institutions.

The challenge for Madagascar will now be to find a balance between development financing needs and managing its dependence on international donors.