The International Monetary Fund (IMF) has raised concerns over the limited institutional capacity of Madagascar’s Treasury in overseeing state-owned enterprises and public shareholdings. The IMF stated that the General Directorate of the Treasury and the Budget and Finance Administration still lack the technical expertise and institutional influence required to effectively supervise companies in which the Malagasy state holds stakes.
According to the IMF, this institutional weakness significantly limits the government’s ability to influence strategic decisions within major state-owned enterprises such as Jirama and Madagascar Airlines. The report emphasizes that Treasury teams currently do not possess sufficient internal expertise to properly assess the financial conditions and strategic challenges of these companies, despite the substantial fiscal risks they pose to the country’s public finances.
The situation is particularly concerning in the case of Jirama, Madagascar’s national water and electricity utility, which has long struggled with financial instability, governance issues, and allegations of corruption. The IMF believes that the absence of strong technical oversight within the administration reduces the state’s capacity to implement structural reforms and improve the management of public enterprises. Although the Treasury was assigned in 2025 to coordinate efforts related to Jirama’s arrears clearance plan, the IMF noted that such responsibilities remain difficult to fulfill without stronger institutional support and specialized expertise.
Despite these concerns, the report also acknowledges several reforms already initiated by Malagasy authorities. The Treasury has begun strengthening its supervisory framework through the introduction of new governance tools, including a public portfolio management framework document, guidelines for state-appointed board members, and an annual consolidated report on state-owned enterprises. Authorities have also started using modern analytical instruments such as the “SOE Health Check Tool” to improve the financial monitoring and evaluation of public companies.
For the IMF, improving transparency and governance within state-owned enterprises is now a critical priority. The institution recommends the systematic publication of audited financial statements for companies in which the state holds majority ownership. According to the report, greater transparency would improve the quality of financial information, reduce fiscal risks, and strengthen accountability within public enterprises.
The IMF also encourages the Ministry of Economy and Finance to establish a specialized monitoring unit dedicated to state-owned enterprises that present significant financial risks to the national budget. Such a structure would allow the government to better anticipate financial difficulties, strengthen oversight mechanisms, and ensure more efficient management of public assets.
State-owned enterprises continue to play a strategic role in Madagascar’s economy. They account for approximately 3.28% of the country’s GDP and operate in key sectors including energy, transportation, and financial services. Of the 51 public enterprises identified in the report, nearly 71% of state investments are concentrated in these critical sectors.
The IMF’s warning comes at a time when Madagascar is pursuing broader economic reforms supported by international financial partners. Over recent years, international institutions have repeatedly stressed the importance of improving public governance, enhancing budget transparency, and reducing the fiscal burden created by poorly performing state-owned enterprises. According to the IMF, strengthening the institutional capacity of the Treasury will be essential to securing the country’s fiscal stability, restoring investor confidence, and improving the long-term management of public resources.
