Résumé pays

Economic performance and outlook: Since the end of the 2009–13 political crisis, Madagascar has experienced a slow economic recovery that is vulnerable to macroeconomic shocks, such as drops in nickel and cobalt prices, and climatic disasters, such as drought, hurricanes, and floods. Due to the slow rate of agricultural modernization, the primary sector regularly suffers from the adverse effects of climate change. In 2014–16, the economy grew a relatively modest 3.5% a year. Since then, economic performance has been encouraging, with real GDP growth of 4.2% in 2016 and 2017. Driven by the secondary and tertiary sectors, real GDP growth is projected to be 5.2% in 2018 and 6% in 2019. 

Macroeconomic evolution: Continuing efforts to increase tax revenues and the efficiency of public expenditure will help expand the scope for public investment. Capital expenditure is expected to climb from 8% of GDP in 2017 to 10% in 2018; current expenditure is expected to shrink from 12% of GDP in 2017 to 10% in 2018. The sharp rise in current expenditure in 2016 partly reflects the massive impact on the public finances of the drought and the Enawo hurricane, estimated at $71 million or 0.6% of GDP. The expansionist budgetary policy is expected to produce a high budget deficit of at least 4% of GDP in 2018 and 3.8% in 2019; it could be funded by an increase in public debt, especially as the indebtedness risk remains relatively low. The Central Bank’s May 2017 increase of its key rate from 8.3% to 9% is likely to facilitate price stability, with inflation running at 6.8% or below in 2018 and 2019. 

Tailwinds: The conference of partners and investors in Paris in 2016 is expected to begin producing results in the form of public and private investment in infrastructure, which would stimulate growth in 2018 and 2019. The normalization of the political situation opened access for Madagascar’s products to U.S. markets under the African Growth and Opportunity Act (AGOA) and to the European Union, helping stimulate economic growth. Exports are projected to continue to boom in 2018–19, with strong demand for textiles and essential oils produced in the free trade zone, as well as cloves and vanilla. Over the same period, the surge in tourism, especially ecotourism, could drive economic growth. 

Headwinds: The country is a net importer of oil products and relies heavily on mining and agricultural exports, which account for more than 70% of physical exports. The main risks to the economic outlook are external shocks in the form of falling commodity prices and rising oil prices. Another risk is the high vulnerability of agriculture to the effects of climate change, which regularly causes severe droughts in the south and floods in the north. The economic outlook also depends on the government’s ability to rapidly implement structural investment projects supported by partners and to maintain a peaceful political environment during the 2018 presidential election. The latter risk could provoke a wait-and-see attitude in the private sector in 2018.

Source: African Economic Outlook 2018

Revenu fixe


  • The government securities yield curve extended to 3 years with three benchmark points along the curve (1-2 and 3 years). 
  • The issuance strategy is to finance budget deficits. 
  • Madagascar is 37th in the ABMDI 2017 Ranking Report. 

Issuance strategy 

The issuance strategy is to finance budget deficits. The issuance programs are conducted according to the importance of the liquidity situation in the market in order to obtain the lowest possible cost. 

Benchmark issues 

Yield curve construction is not taken into account in the issuance strategy. However, the government of Madagascar targets 1-2 and 3 years as benchmarks maturities. The auction and underwriting methods are used for securities issuance. There is no benchmark yield curve in Madagascar. 

Yield curve 

There is no yield curve in Madagascar and the government issuance strategy does not plan to build a benchmark yield curve. 

Challenges in building an efficient yield curve 

  • Narrow investor base: commercial banks are the main investors in government securities. Based on banks’ seasonal liquidity. 
  • Illiquid secondary market

Guide d’achat des obligations

Openness to international investors

The Economic Development Board of Madagascar (EDBM) continues to provide support to foreign investors, despite the temporary suspension of funding by the World Bank. The Malagasy Government encourages public foreign investment by making it as non-bureaucratic as possible; it now takes four business days to register a business and one week to gather the necessary signatures for business start-up.

Furthermore, there are no law or regulation authorizing private firms to adopt articles of incorporation or association that limit or prohibit foreign participation or control.

Procedures for market participation 

Participation rules to the Treasury securities markets are listed in the Malagasy Treasury website; they differ for the Treasury bills market than for the Treasury Notes market.

To participate in the Treasury Notes (Bons du Trésor FIHARY), one must open an account at the Malagasy Treasury. Participation is organized as follows: from the 1st to the 10th of each month, banks can bid up to a maximum of 50%; non-banks can bid the remaining 50%; from the 11th to the 15th: all other investors can participate to the bidding process. The minimum bidding amount is Ariary 1 million; any subsequent bids must be in tranches of Ariary 1 million.

To participate to the Treasury Bills markets (Bons du Trésor par Adjudication or BTA), investors must have an account at a bank. Auctions are open to all. The minimum bidding amount in both methods is A20 million and a minimum of 5% of the bidding amount is required upfront; any subsequent bid must be in tranches of A10 million.


Treasury bills are subject to the IRCM (Impôt sur le revenu des capitaux mobiliers) rate of 23%.

Credit rating

Standard & Poor’s stopped releasing a rating for Madagascar sovereign credit since the country experienced political turmoil, back in 2008.

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