Madagascar's government has agreed to compensate Polo Garments Mahajanga (PGM), a decision announced by Colonel Michaël Randrianirina that could significantly improve bilateral relations with Belgium. A compromise has finally been reached regarding compensation for PGM investors, a former Belgian textile and clothing company. According to the head of state, the government has committed to paying the financial compensation owed to the company.
This announcement was made by the president upon his return from a European trip late Friday. The PGM case was among the main topics discussed with Belgian Prime Minister Bart De Wever during their meeting in Brussels on Thursday afternoon.
The PGM affair dates back to the 2009 political events. The textile factory was among the sites looted during the January 27-28, 2009 riots in Mahajanga. Owners quickly claimed compensation from their insurer, which refused. This led to a prolonged legal battle that gradually took on state and international dimensions.
PGM initially won its case before Mahajanga's Court of First Instance in 2010, with the insurance company ordered to pay over 14 billion ariary—nearly double the insurer's capital of 7 billion ariary. The case eventually reached the Supreme Court of Cassation. In 2012, the prosecutor general filed an appeal in the interest of law, suspending execution of the decision favoring the textile firm.
Facing this impasse, Belgian investors took the dispute to the international stage. PGM won its case before the International Centre for Settlement of Investment Disputes (ICSID), a World Bank-affiliated arbitration body, in April 2020. Madagascar was ordered to pay approximately 6.5 million dollars in compensation, plus accumulated interest from January 28, 2009 until full payment.
Although the state filed for annulment of the sentence, it was rejected in 2022. With accumulated interest, the bill initially approached 13 million dollars. The delegation negotiated a reduction to 11 million dollars. The president stated that this dispute is now "entirely resolved."
According to informed sources, this prolonged dispute had prompted Belgian authorities to suspend the accreditation of Rivo Rakotovao, former Senate president, as Madagascar's ambassador to Belgium and representative to the European Union. His official appointment, confirmed Saturday in the Council of Ministers, confirms the resolution of the crisis.