Let's Talk Money: The Ariary

The Malagasy Money

As we are writing this article, the website of the Central Bank of Madagascar shows that 1 USD equals MGA (Malagasy Ariary) 3,785.80 and 1 Euro equals MGA 4,512.17. But what can you buy with one Ariary? Not much…or nothing at all. Far gone were the days where with 10 Ariary, you could still buy a bus ticket, a breadstick, and some candies. Today, 1 “kapoaka” of rice costs 800 Ar (kapoaka is a traditional measurement; 3 and half kapoaka of rice is equivalent to 2.2 lbs. of rice), one egg is 700 Ar, and you need to pay 200 Ar to get one banana.

It is believed that the Arabs who traded in the North East of Madagascar introduced money to the island around the 12th century. Before the colonization, the Malagasy money was based on a fragmentation of a piaster and it was not uniform. The king Andrianampoinimerina was the first to regulate the weight of the fragmented pieces to evaluate the value of the money. When the French colonized Madagascar in 1896, the French money, French Francs, was introduced and in 1925, the Malagasy money, “Franc”, was created. When Madagascar regained its independence in the 1960, the currency became “Malagasy Francs”. Although people have alternately used the denominations Ariary or Franc, it was only in 2003 the Malagasy currency became officially Ariary.

5 French francs introduced in 1885 and used during the colonization. It’s made of silver.

Change is hard!

Having used the Malagasy Franc (MGF) for more than 40 years, some people cannot just switch to MGA. Although the conversion is simple, 1 MGA is equal to 5 MGF, the long transition period makes it looks like Madagascar has 2 currencies, some people would use MGF and some use MGA. For some time the bills and coins had had both MGA and MGF written on them. The recent ones have MGA only.

The descriptions of the valid and actual bills and coins are seen on the Central Bank of Madagascar’s website. Billets de banque ayant cours légal | Banky Foiben'i Madagasikara (banky-foibe.mg)

How to tell if someone is talking MGF or MGA?

Usually when the person does not specifically tell the currency but announces the amount in French, then it is MGF, but if it is in Malagasy, then it is MGA. For example, when someone says “deux mill cinq [cent]”, that implies MGF, another says “dimanjato”, that’s MGA but they are talking about the same amount. Nowadays, people would say “deux mille cinq cents Ariary”, but you will never hear someone say “dimanjato Franc”. To avoid any confusion, the best way is to ask specifically what currency is being discussed. This reflex comes automatically when you hear that the amount is awkward, and people would say “are you talking Ariary or Francs?”.

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Today, the division of Ariary is quite simple because it is based on the bills and the coins. But, before the colonization, counting money required an extra brain exercise because of the fragmentations of the piasters. Here are some examples:

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The Malagasy economy still uses lots of cash, so the bills get used and dirty very quickly. 100.000 Ar (5 bills of 20.000 Ar) can be carried around easily…not quite the same with $100.000!

Here is a Malgasy proverb on money:

• Money is like a guest: it arrives today and leaves tomorrow.