Madagascar Climate Plan Requires Nearly $25B or 5% of GDP Annually

During the 14th UNCTAD International Debt Management Conference in Geneva from 17 to 19 March 2025, Malagasy Minister of Economy and Finance Rindra Rabarinirinarison outlined the Madagascar Climate Adaptation and Mitigation Plan. According to official estimates, Madagascar would require some USD 24.4 billion annually, which is equivalent to 4.2% of its GDP.

Minister Rabarinirinarison underscored that Madagascar faces the acute dilemma to choose between economic development or climate action. She stressed that it is quit unfair to impose climate actions on Madagascar without adequate support, since Madagascar is not among the large polluters which is causing the #ClimateChange in the first place.

Increasing public debt to finance climate action is not always a viable option. Currently, Madagascar Debt-to-GDP ratio stands at 57.4% and is nearing an unsustainable level. In its place, Madagascar is advocating for a fairer international finance system with innovative #GreenFinancing instruments which would more closely reflect current realities. Alternatively, Madagascar would be prepared to put forward climate- and investment-friendly policies in a bid to drive #FDI into sustainable projects.

Currently, the Government of Madagascar must juggle with three balls in the air, viz, economic development, debt servicing and climate action. Being an island-state, Madagascar has been identified one of the countries which is most susceptible to the rise of the ocean due to global warming. Madagascar thus hopes the more advanced economies, which have been polluting for longer periods, would step up climate financing.

The #GlobalSouth has been calling for a revamp of the Global Finance Architecture in order to better address the urgent issues facing the world today. The so-called Bretton Woods institutions appear too burdened with excess historical baggage to take a decisive turn in the current context.