IMF reviews for Madagascar and Liberia tie next steps to governance diagnostics

The IMF Executive Board completed reviews of programmes for two African economies within three days at the end of September, and both releases point to governance diagnostics as the next piece of work. For Madagascar, the Board on 30 September completed the combined third and fourth reviews of the Extended Credit Facility (ECF) and Resilience and Sustainability Facility (RSF) arrangements approved in June 2024, allowing an immediate disbursement of SDR 114.052 million, or about US$155 million, according to the Madagascar press release. For Liberia, the Board on 28 September completed the fourth ECF review and the first RSF review, with immediate disbursements of SDR 19.3 million and SDR 17.62 million, the Liberia press release says.

Madagascar: a waived target and a diagnostic to act on

The Board granted a waiver for nonobservance of the end-June 2025 floor on the primary balance, citing its temporary nature and the corrective actions taken, according to the release. The authorities then met all end-December 2025 quantitative performance criteria, and broad money growth stayed within the bands of the monetary policy consultation clause. Tax collection, however, fell well below expectations. Madagascar also adopted its first green budget and a National Climate Finance Strategy under the RSF, while some RSF reform measures were delayed, partly because of external factors.

The Fund asks the authorities to adopt and quickly implement a homegrown action plan on the key recommendations of its governance diagnostic assessment, a step it says should complement the national anti-corruption strategy, the release says. It gives no date for the plan. It does set one for fuel pricing: the automatic fuel pricing mechanism should be fully applied by January 2027, with targeted measures for the most vulnerable.

Madagascar is undergoing a political transition, the release says, amid vulnerabilities from tropical cyclones, spillovers from the Middle East war and higher oil prices, and persistent electricity and water shortages. The Fund calls for swift implementation of the recovery plan for the public utility JIRAMA, to improve electricity and water reliability while limiting calls on the state budget. It also wants the tax measures in the supplementary 2026 budget backed by rationalisation of tax exemptions and stronger tax and customs administration.

The projections table puts real GDP growth at 3.1 per cent in 2025, revised down from 4 per cent at the second review, with 3.8 per cent projected for 2026 and 4.5 per cent for 2027. End-period inflation is projected at 9.3 per cent in 2026, after 7.2 per cent in 2025. Total revenue excluding grants is put at 10.1 per cent of GDP in 2025 and 11.2 per cent in 2026.

Liberia: publish the diagnostic, lift legal barriers

The Liberia release is more specific on transparency. It says publishing the governance diagnostic report and implementing a focused action plan would signal firm commitment, and it recommends removing legal barriers to publishing the asset declarations of all public officials, according to the press release. It sets no date for either step.

Revenue is the main fiscal lever. The Fund lists mobilising domestic revenue, notably by implementing a value-added tax in 2027, together with mining tax reform and the rationalisation of exemptions, the release says. The authorities plan to spend the one-off mining concession payment in phases over 2026 and 2027, given limited implementation capacity, and the Fund describes managing it prudently and transparently as a stated priority.

Performance was broadly satisfactory, with all end-December 2025 performance criteria met, the release says. The ECF was approved on 25 September 2024 with access of SDR 155 million, or 60 per cent of quota, and total ECF disbursements stand at SDR 96.5 million, about US$131.67 million. The RSF was approved on 27 April 2026 with total access of SDR 193.8 million, about US$265 million. Real GDP growth was 5.1 per cent in 2025 and is projected at 5.5 per cent in 2026, while end-period inflation is projected to ease to 5.8 per cent from 8.3 per cent.

The financial sector is the other open item. Bank recapitalisation is progressing more slowly than planned, and the Fund wants a faster reduction in non-performing loans, according to the release. It calls the issuing of new banknotes an immediate priority to relieve shortages, and says the Central Bank of Liberia is ready to tighten policy if elevated global oil prices feed inflation.

What the pairing shows

Read together, the releases show governance framed as a sequence of public commitments rather than a single benchmark. In Liberia the sequence starts with publication of the diagnostic and the removal of legal barriers to publishing asset declarations. In Madagascar it starts with adoption of an action plan. Neither release nor the Liberia text attaches a date to those steps, which leaves the next reviews as the test of whether they are taken.

Both programmes also carry a revenue dependency. Madagascar's tax collection fell well short and the Board waived a missed primary balance floor, according to the Madagascar release, while Liberia's plan rests on a VAT that starts only in 2027, the Liberia release says. Oil prices appear as a risk in both texts, and in each the central bank is described as ready to tighten if inflation persists.