Madagascar has announced a 10% reduction in the 2025 budgets of all government ministries, institutions, and public agencies to prioritize the country’s energy transition.
Minister of Economy and Finance, Rindra Hasimbelo Rabarinirinarison, shared this decision during a press conference on Monday.
The savings will be reallocated to JIRAMA, Madagascar’s national electricity company, as part of a broader investment strategy to modernize its infrastructure.
According to the minister, 525 billion ariary (approximately $112 million) will be directed toward upgrading JIRAMA’s systems, alongside $60 million in continued subsidies.
JIRAMA has long relied on state subsidies to cover fuel costs, with over 797 billion ariary (about $170 million) allocated for this purpose in 2024 alone.
The government also plans to increase the value-added tax (VAT) on gas from 5% to 10% in 2025, although this remains below the standard VAT rate of 20% applied to other goods and services.
Ambitious Economic Growth Goals
Presenting Madagascar’s 2025 draft budget to the National Assembly, Minister Rabarinirinarison outlined a vision for 5% economic growth in the coming year, with aspirations to reach 5.6% by 2028. This growth strategy hinges on two key priorities: energy transition and food sovereignty.
Agriculture is expected to play a pivotal role, with the sector projected to grow by 9.5% in 2025.
The boost is largely attributed to the introduction of high-yield rice varieties capable of producing over eight tonnes per hectare.
The tertiary sector, including tourism, is also set to contribute significantly, with a forecasted growth of 5.4%.
The government’s tourism strategy focuses on diversifying offerings, enhancing governance, promoting Madagascar’s image abroad, and improving infrastructure.
By 2028, Madagascar aims to attract one million international tourists, reflecting the country’s commitment to sustainable economic progress.
