Republic of Madagascar: Selected Issues
IMF Staff Country Reports, March 21, 2025
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- Republic of Madagascar: Selected Issues
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Bibliographic details
- Published: March 21, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229004114.002
Key findings
- Jiro sy rano Malagasy (JIRAMA) is relatively inefficient: the company "produces less than what is generally acceptable, and at a higher cost."
- Electricity is the "second biggest constraint to competitiveness" reported by businesses in Madagascar, based on the Enterprise Survey conducted by the World Bank.
- A recovery plan is currently under preparation by the new JIRAMA management.
- Expansion of production capacity should prioritize renewable energy with a target for renewables to reach 85 percent of the production mix.
Analysis and objectives
- Primary objective: JIRAMA to reach financial sustainability and no longer be dependent on government transfers.
- Other important objectives: increase electricity access and shift the production mix toward more renewables.
- Cost structure considerations: tariffs should cover recovery costs, explicitly including operational, distribution, commercialization, and investment costs.
Policy recommendations
- Align tariffs with full recovery costs (operational, distribution, commercialization, and investment).
- Adopt a first-best approach of a single household tariff and use targeted transfers to compensate the most vulnerable households.
- Implement the recovery plan under the new JIRAMA management, with explicit emphasis on expanding renewable generation to achieve the 85 percent production-mix target.
Source: Republic of Madagascar: Selected Issues.
Content in this bundle
- Republic of Madagascar: Selected Issues; IMF Country Report No. 25/61; February 11, 2025