Economy of Madagascar

The economy of Madagascar is a market economy and is supported by Madagascar's well-established agricultural industry and emerging tourism, textile and mining industries. Malagasy agriculture produces tropical staple crops such as rice and cassava, as well as cash crops such as vanilla and coffee. Madagascar's wealth of natural resources supports its sizable mining industry. Additionally, Madagascar's status as a developing nation exempts Malagasy exports from customs protocol in some areas, notably the United States and European Union. These exemptions have supported the growth of the Malagasy textile industry. Despite Madagascar's natural resources and developing industries, the 2009 Malagasy political crisis—considered by the international community to be an illegal coup[6]—deterred foreign investments in Madagascar and caused the Malagasy economy to decline.[7] Foreign investments have resumed following the resumption of elections in early 2014. At 2016, Madagascar is one of the world's fastest-growing economies.

Economy of Madagascar
Rice paddies in Madagascar
CurrencyMalagasy ariary (MGA)
calendar year
Trade organisations
WTO, African Union
GDPIncreaseUSD 108 billion (2014 est.) (PPP)
GDP rank119rd (CIA, nominal)
GDP growth
3.1% (2015), 4.2% (2016),
4.1% (2017e), 5.1% (2018f) [1]
GDP per capita
IncreaseUSD 1,600$ (2017)
GDP by sector
services (60.3%),
agriculture (23,7%),
industry (16%) (2017 est.)
7.8% (2017 est.)
Labour force
13.40 million (2017 est.)
Main industries
meat processing, soap, breweries, tanneries, sugar, textiles, glassware, cement, automobile manufacturing, paper, petroleum, tourism,
162nd (2017)[2]
Exports$2.35 billion (2017 est.)[3]
Export goods
coffee, vanilla, shellfish, sugar, cotton cloth, clothing, chromite, petroleum products
Main export partners
 France 21.6%
 United States 10.6%
 Germany 8.8%
 China 8.3%
 Netherlands 5.7%
 Canada 4.9%
 Belgium 4.5%
 Japan 4.4%
 South Africa 4.1% (2013 est.)[4]
Imports$3.235 billion (2017 est.)[5]
Import goods
capital goods, consumer goods, food
Main import partners
 China 19.4%
 France 11.9%
 India 6.4%
 South Africa 5.6%
 Bahrain 4.6%
 UAE 4.3%
 Mauritius 4.2% (2014 est.)[4]
Public finances
USD $3.914 billion (2017 est.)
RevenuesUSD $1.292 billion
ExpensesUSD $1.725 billion
Economic aidrecipient: $838 million (1997)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.


Agriculture, including fishing and forestry, is Madagascar's largest industry and employs 82% of its labor force.[4] Madagascar's varied climate, ranging from tropical along the coasts, moderate in the highlands and arid in the south, allows for the cultivation of tropical crops such as rice, cassava, beans and bananas.[4] In 2011, agricultural products—especially cloves, vanilla, cacao, sugar, pepper, and coffee—accounted for Madagascar's top twelve exports by value.[8] Madagascar produces the second largest vanilla harvest in the world and Malagasy vanilla accounts for about a quarter of the global vanilla market.[9]


Exports from Madagascars' Export Processing Zones, located around Antananarivo and Antsirabe, account for the majority of garment exports[10] and are largely exempt from customs restrictions in the United States under the African Growth and Opportunity Act (AGOA)[11] and in the European Union under the Everything But Arms (EBA) agreement.[12]


A small but growing part of the economy is based on mining of ilmenite, with investments emerging in recent years, particularly near Tulear and Fort Dauphin.[13] Mining corporation Rio Tinto Group started production at its Fort Dauphin mine in January 2009,[14] following several years of preparation. The mining project is highly controversial, with Friends of the Earth and other environmental organizations filing reports to detail their concerns about the mine's effect on the environment and local communities.[15] Gemstone mining is also an important part of Madagascar's economy.

Several major projects are underway in the mining and oil and gas sectors that, if successful, will give a significant boost. In the mining sector, these include the development of coal at Sakoa and nickel near Tamatave. The Ambatovy nickel mine (Sherrit International 40%, Sumitomo 27.5%, Korea Resources 27.5%, SNC-Lavalin 5%) is a huge operation and has cost USD $4.76 million to date [16] and is due to start production in 2011. In oil, Madagascar Oil is developing the massive onshore heavy oil field at Tsimiroro and ultra heavy oil field at Bemolanga.

Investment climate

Former President Marc Ravalomanana of Madagascar

Following the 2002 political crisis, the government attempted to set a new course and build confidence, in coordination with international financial institutions and donors. Madagascar developed a recovery plan in collaboration with the private sector and donors and presented it at a "Friends of Madagascar" conference organized by the World Bank in Paris in July 2002. Donor countries demonstrated their confidence in the new government by pledging $1 billion in assistance over five years. The Malagasy Government identified road infrastructure as its principle priority and underlined its commitment to public-private partnership by establishing a joint public-private sector steering committee.

The Madagascar-U.S. Business Council was formed as a collaboration between the United States Agency for International Development (USAID) and Malagasian artisan producers in Madagascar in 2002.[17] The U.S.-Madagascar Business Council was formed in the United States in May 2003, and the two organisations continue to explore ways to work for the benefit of both groups.

The government of former President Marc Ravalomanana was aggressively seeking foreign investment and had planned to tackle many of the obstacles to such investment, including combating corruption, reforming land-ownership laws, encouraging study of American and European business techniques, and active pursuit of foreign investors. President Ravalomanana rose to prominence through his agro-foods TIKO company, and is known for attempting to apply many of the lessons learned in the world of business to running the government. Prior to Ravalomanana's resignation, concerns had arisen about the conflict of interest between his policies and the activities of his firms. Most notable among them the preferential treatment for rice imports initiated by the government in late 2004 when responding to a production shortfall in the country.

Madagascar’s appeal to investors stems from its competitive, trainable work force. More than 200 investors, particularly garment manufacturers, were organized under the country’s export processing zone (EPZ) system since it was established in 1989. The absence of quota limits on textile imports to the European market under the Lome Convention helped stimulate this growth.

Growth in output in 1992–97 averaged less than the growth rate of the population. Growth has been held back by a decline in world coffee demand, and the erratic commitment of the government to economic reform.[18][19] During a period of solid growth from 1997 to 2001, poverty levels remained stubbornly high, especially in rural areas. A six-month political crisis triggered by a dispute over the outcome of the presidential elections held in December 2001 virtually halted economic activity in much of the country in the first half of 2002. Real GDP dropped 12.7% in 2002, inflows of foreign investment dropped sharply, and the crisis tarnished Madagascar's budding reputation as an AGOA standout and a promising place to invest. After the crisis, the economy rebounded with GDP growth of over 10% in 2003. Currency depreciation and rising inflation in 2004 hampered economic performance, but growth for the year reached 5.3%, with inflation reaching around 25% at the end of the year. In 2005 inflation was brought under control by tight monetary policy of raising the Taux Directeur (central bank rate) to 16% and tightening reserve requirements for banks. Thus growth was expected to reach around 6.5% in 2005.

Food security, vulnerability and risk management

Antananarivo Street
Vibrant Antananarivo is the political and economic capital of Madagascar

Despite a wealth of abundant and diverse natural resources, Madagascar is one of the world’s poorest countries. Madagascar holds great potential for agricultural development, mainly due to the large variety of soil types and climatic diversity. Nevertheless, natural hazards (cyclones, drought, locust invasions) combined with old-fashioned farming practices limit production.

The standard of living of the Malagasy population has been declining dramatically over the past 25 years. The country has gone from being a net exporter of agricultural products in the 1960s to a net importer since 1971. Inappropriate traditional agricultural methods cause soil to erode and soil quality to decline, and the basis of survival for Madagascar’s people is under serious threat.[20]

Poverty reduction

Local market vendors.

In 2000, Madagascar embarked on the preparation of a Poverty Reduction Strategy Paper (PRSP) under the Heavily Indebted Poor Countries (HIPC) Initiative. The boards of the IMF and of the World Bank concurred in December 2000 that the country was eligible under the HIPC Initiative, and Madagascar reached the decision point for debt relief. On March 1, 2001, the IMF Board granted the country $103 million for 2001–03 under the Poverty Reduction and Growth Facility (PRGR). Resources were intended for improving access to health, education, rural roads, water, and direct support to communities. In addition, on March 7, 2001, the Paris Club approved a debt cancellation of $161 million. On February 28, 2001, the African Development Bank (ADB) approved under the HIPC a debt cancellation of $71.46 million and granted in June 2001 an additional credit of $20 million to fight against AIDS and poverty.

Partly as a result of these credits but also as a result of previous reforms, average GDP growth exceeded the population growth rate of 2.8% in 1997 (3.5%), 1998 (3.9%), 1999 (4.7%) and 2000 (4.8%).

In October 2004, the boards of the IMF and the World Bank determined that Madagascar had reached the completion point under the enhanced HIPC Initiative.

Facts and figures

The following table shows the main economic indicators in 1980–2017.[21]

Year 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
7.82 bil. 9.28 bil. 12.39 bil. 13.75 bil. 18.00 bil. 22.72 bil. 24.68 bil. 26.97 bil. 29.48 bil. 28.78 bil. 28.72 bil. 29.74 bil. 31.20 bil. 32.42 bil. 34.10 bil. 35.54 bil. 37.50 bil. 39.77 bil.
GDP per capita in $
895 929 1,073 1,022 1,143 1,242 1,311 1,392 1,479 1,381 1,362 1,372 1,400 1,414 1,446 1,466 1,504 1,551
GDP growth
0.8 % 1.2 % 3.1 % 1.7 % 4.5 % 4.8 % 5.4 % 6.4 % 7.2 % −4.7 % 0.3 % 1.5 % 3.0 % 2.3 % 3.3 % 3.1 % 4.2 % 4.1 %
(in Percent)
18.3 % 10.6 % 11.9 % 49.0 % 10.7 % 18.4 % 10.8 % 10.3 % 9.3 % 9.0 % 9.2 % 9.5 % 5.7 % 5.8 % 6.1 % 7.4 % 6.7 % 8.1 %
Government debt
(Percentage of GDP)
... ... 118 % 116 % 107 % 86 % 37 % 33 % 31 % 34 % 32 % 32 % 33 % 34 % 35 % 36 % 38 % 37 %
Madagascar treemap
Graphical depiction of Madagascar's product exports in 28 color-coded categories.

Household income or consumption by percentage share:
lowest 10%: 2.3%
highest 10%: 34.9% (1993)

Industrial production growth rate: 5% (1999 est.)

Electricity – production: 1.35 billion kWh (2009 est.)

Electricity – production by source:
fossil fuel: 69.5%
hydro: 30.5%
nuclear: 0%
other: 0% (2009)

Electricity – consumption: 1.256 billion kWh (2009 est.)

Electricity – exports: 0 kWh (2010)

Electricity – imports: 0 kWh (2010)

Exchange rates: Malagasy ariary (MGA) per US dollar - 2,195 (2012 est.) 2,025.1 (2011 est.) 2,090 (2010 est.) 1,956.2 (2009) 1,654.78 (2008)

See also


  1. ^ "World Bank forecast for Madagascar, June 2018 (p. 153)" (PDF). World Bank. Retrieved 11 September 2018.
  2. ^ "Ease of Doing Business in Madagascar". Retrieved 2017-01-24.
  3. ^
  4. ^ a b c d United States of America. "The World Factbook". Central Intelligence Agency. Retrieved 2 March 2015.
  5. ^
  6. ^ "'SADC does not, cannot recognise Rajoelina'". Independent Online. Agence France-Presse. 19 March 2009.
  7. ^ Republic of Madagascar (3 June 2014). "Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding" (PDF). International Monetary Fund. International Monetary Fund. p. 4. Retrieved 25 February 2015.
  8. ^ United Nations. "Commodities by Country". FAOSTAT. Food and Agriculture Organization of the United Nations. Retrieved 26 February 2015.
  9. ^ United Nations (16 June 2009). "Vanilla: Post-harvest Operations" (PDF). Food and Agriculture Organization of the United Nations. p. 14. Retrieved 6 March 2015.
  10. ^ "". Retrieved 2018-06-26.
  11. ^ United States of America. "AGOA Eligibility". International Trade Administration. Retrieved 28 February 2015.
  12. ^ European Union (30 April 2013). "Everything But Arms (EBA) – Who benefits?" (PDF). European Commission: Trade. Retrieved 28 February 2015.
  13. ^ Madagascar – Mining: Heavy Minerals Mining Archived 2008-03-31 at the Wayback Machine. Retrieved on 2012-05-28.
  14. ^ Media releases – Rio Tinto starts ilmenite production in Madagascar Archived 2011-09-30 at the Wayback Machine. Rio Tinto. Retrieved on 2012-05-28.
  15. ^ Rio Tinto's Madagascar mining project. Retrieved on 2012-05-28.
  16. ^ "Sherritt Provides Update on the Ambatovy Project" (PDF). Archived from the original on July 16, 2011. Retrieved 2011-02-01.CS1 maint: BOT: original-url status unknown (link). (2010-12-17)
  17. ^ "Made in Madagascar: Exporting Handicrafts to the U.S. Market: a Project with the UN Public-Private Alliance for Rural Development; Final Report", A Project with the UN Public-Private Alliance for Rural Development.
  18. ^ FAO Statistic Yearbook 2010 – Resources
  19. ^ The World Bank. Madagascar at a glance, 2/25/11
  20. ^ Deutsche Gesellschaft für Internationale Zusammenarbeit web site
  21. ^ "Report for Selected Countries and Subjects". Retrieved 2018-09-04.


External links

The population below the provety line is 50 percent

Aquaculture in Madagascar

Aquaculture started to take off in Madagascar in the 1980s. The majority of Aquaculture in Madagascar includes the cultivation of sea cucumbers, seaweed, fish and shrimp. Aquaculture in Madagascar is being used to stimulate the countries economy, increase the wages of fishermen and women in the area and improve the regions ocean water quality. Coastal regions of Madagascar are reliant on the Indian Oceans marine resources as a source of food, income, and cultural identity. Madagascar is the fourth-largest island in the world and consists of the main island, as well as smaller surrounding islands. Madagascar is considered to be a biodiversity hotspot. Over 90 percent of its wildlife is not found anywhere else on Earth. In the Velondriake, a locally managed marine area (LMMA) in southwest Madagascar, laws have been created by an official governing body, consisting of elected representatives from 25 villages, called ‘dina’, to combat environmental degradation. This LMMA includes coral reefs, mangroves, seagrass beds, baobab forests and other threatened habitats. The Vezo, literally meaning ‘people who fish’ in the Malagasy language of the region, are amongst Madagascar's poorest. Making environmentally conscious efforts to boost the economy and raise incomes are top priorities for the LMMA.

Central Bank of Madagascar

The Central Bank of Madagascar (Malagasy: Banky Foiben'i Madagasikara; French: Banque Centrale de Madagascar, BCM) is the central bank of Madagascar.

The bank's mission is to, in collaboration with the general government, and in observation of the laws of finance, to maintain the general political economy of Madagascar; and to maintain the national monetary reserves.[1] offices of the bank are located in Antananarivo.

The Central Bank of Madagascar is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.

Commission de Supervision Bancaire et Financaire

The Commission de Supervision Bancaire et Financière (CSBF), or Commission for the Supervision of Banking and Finance, is a Madagascar government agency that is responsible for directing the course of affairs of banking and finance in Madagascar. Its duties include providing for and supervising Madagascar's central bank, the Banque Centrale de Madagascar.

The Commission is defined by a 1995 law: "Loi No 95 - 030 (Law No. 95 -030) Relative to the activity and control of credit establishments".

Illegal logging in Madagascar

Illegal logging has been a problem in Madagascar for decades and is perpetuated by extreme poverty and government corruption. Often taking the form of selective logging, the trade has been driven by high international demand for expensive, fine-grained lumber such as rosewood and ebony. Historically, logging and exporting in Madagascar have been regulated by the Malagasy government, although the logging of rare hardwoods was explicitly banned from protected areas in 2000. Since then, government orders and memos have intermittently alternated between permitting and banning exports of precious woods. The most commonly cited reason for permitting exports is to salvage valuable wood from cyclone damage, although this reasoning has come under heavy scrutiny. This oscillating availability of Malagasy rosewood and other precious woods has created a market of rising and falling prices, allowing traders or "timber barons" to stockpile illegally sourced logs during periodic bans and then flood the market when the trade windows open and prices are high. Over 350,000 trees were illegally felled in Madagascar between 2010 and 2015, according to TRAFFIC.The unsustainable exploitation of these tropical hardwoods, particularly rosewood from the SAVA Region, has escalated significantly since the start of the 2009 Malagasy political crisis. Thousands of poorly paid Malagasy loggers have flooded into the national parks—especially in the northeast—building roads, setting up logging camps, and cutting down even the most difficult to reach rosewood trees. Illegal activities are openly flaunted, armed militia have descended upon local villages, and a rosewood mafia easily bribe government officials, buying export permits with ease. These illegal operations are funded in part by advance payments for future shipments (financed by Chinese expatriates and Chinese importers) and by loans from large, international banks. Demand is fueled mostly by a growing Chinese middle class and their desire for exotic imperial-style furniture. European and American demand for high-end musical instruments and furniture have also played a role. However, public scrutiny has put significant pressure on shipping companies involved in the trade, and the United States is starting to enforce the Lacey Act by investigating companies with suspected involvement in the illegal trade of Malagasy precious woods.

Logging in Madagascar's tropical rainforests has had many secondary effects, beyond the risk of depletion of rare, endemic trees. Habitats have been disturbed, illegal mining has begun, local people have turned to the forests for resources in desperation, and poaching of endangered wildlife has escalated. Lemurs, the most well-known faunal group from the island, have been captured for the exotic pet trade as well as killed for food. Even the most critically endangered species have been targeted, primarily to feed a growing demand for delicacy food in up-scale restaurants. The local villagers have also suffered as tourism has declined sharply or ceased almost entirely. Some have resorted to working as loggers for minimal pay, while others have spoken out against it, often receiving death threats from the rosewood mafia in return.

List of banks in Madagascar

This is a list of commercial banks in Madagascar.

AccèsBanque Madagascar (ABM)

Bank of Africa (BOA)

Banque Industrielle et Commerciale de Madagascar (BICM)

Banque Malgache de L’ocean Indien (BMOI)

Banque Nationale d'Investissement (BNI)

BGFI Bank Madagascar (BGFI)

BFV-Société Générale (BFV-SG)

Madagascar Microfinance Bank

Mauritius Commercial Bank (MCB)

State Bank of MAURITIUS (SBM)

First National Bank of Madagascar (FNBM)

List of provinces of Madagascar by Human Development Index

This is a list of the 6 former Provinces of Madagascar (until 2009) by Human Development Index as of 2017.

MCB Madagascar

MCB Madagascar is a commercial bank in Madagascar. It is a member of the Mauritius Commercial Bank Group of companies headquartered in Port Louis, Mauritius. It was formerly known as MCB Madagascar.

Malagasy ariary

The ariary (sign: Ar; ISO 4217 code MGA) is the currency of Madagascar. It is subdivided into 5 iraimbilanja and is one of only two non-decimal currencies currently circulating (the other is the Mauritanian ouguiya). The names ariary and iraimbilanja derive from the pre-colonial currency, with ariary (from the Spanish word "real") being the name for a silver dollar. Iraimbilanja means literally "one iron weight" and was the name of an old coin worth ​1⁄5 of an ariary.


The metayage system is the cultivation of land for a proprietor by one who receives a proportion of the produce, as a kind of sharecropping. Another class of land tenancy in France is named fermage, whereby the rent is paid annually in banknotes.

Mining industry of Madagascar

The mining industry of Madagascar is on a small scale, centred mainly around remote locations with large mineral deposits. Mining potential is noted in industrial and metallic minerals, energy, precious and semi-precious stones, as well as ornamental stone. The mining sector was neglected by the government for decades prior to the mid 2000s. In 2013, the mining industry, a main source of foreign investment, was struggling due to "low metals prices and distrustful companies", attributed to a 2009 coup.

Outline of Madagascar

The following outline is provided as an overview of and topical guide to Madagascar:

Madagascar – sovereign island nation located in the Indian Ocean off the southeastern coast of Africa. The Island of Madagascar is the fourth-largest island in the world, and is home to 5% of the world's plant and animal species, of which more than 80% are endemic to Madagascar. They include the lemur infraorder of primates, the carnivorous fossa, three bird families and six baobab species.

Rail transport in Madagascar

Rail transport in Madagascar is primarily operated by Madarail,

The northern railway (TCE, Tananarive–Côte Est) is currently concessioned to Madarail. The southern line, Fianarantsoa-Côte-Est railway (FCE), is a parastatal line.


Samifin (Malagasy: Sampan-draharaha Malagasy Iadiana amin'ny Famotsiam-bola; or SRF French: Service de Renseignements Financiers) is the Malagasy Financial Intelligence unit, and acts as an independent body in Madagascar. Founded on July 18, 2008, it is based upon Law 2004-020 (August 19, 2004), which details the tracking and confiscation of illegal products, and Decree 2007-510 (June 4, 2007), which details the creation, organization, and operation of the organization. Its objectives are to clean up the financial sector in Madagascar and combat transnational illegal operations.

Telecommunications in Madagascar

Telecommunications in Madagascar include newspapers, radio, television, fixed and mobile telephones, and the Internet.

Widespread poverty and illiteracy severely limit the penetration of television, print media, and the Internet, making radio by far the most important communications medium in the country.

Three Horses Beer

Three Horses Beer (better known locally as THB) is a pale lager that has been brewed by Star Breweries of Madagascar since 1958. It is the highest selling beer in Madagascar and has been described as emblematic of the country. THB is sold nationwide and since 2005 has been exported to such markets as France, Reunion Island, Comoros and Mayotte. The Malagasy beer is produced at two breweries in Madagascar, the first centrally located in Antsirabe and the other in the northern city of Antsiranana. THB Pilsener, the most common variant of THB, has a light taste and is produced from mostly local barley, corn and hops. Star Breweries also produces THB Fresh (a shandy with less than 1% alcohol), THB Special (6.2% alcohol), and THB Lite (1% alcohol). Recent investments in Star Brewery infrastructure have allowed a 20% increase in production since 2011.

After advertising alcohol in the media was banned under former President Marc Ravalomanana, Star Breweries has increasingly promoted THB through unconventional means. These have included sponsoring the THB Champions League, Madagascar's national football championship, and holding annual beer festivals. In addition, THB is a regular sponsor of local musicians through major annual festivals and tours. Star Breweries has also hired musicians to perform in music videos specifically created to promote the beer. In 2014 the THB label was significantly redesigned, and in 2015 a new slogan, "THB eo foana e!" ("THB always!") was promoted alongside the beer's longstanding trademark Soa Ny Fiarahantsika ("The Pleasure of Being Together"). The beer is regularly promoted by Malagasy musical stars and other public figures.

Whaling in Madagascar

Whaling in Madagascar is currently banned on a commercial level in compliance with sanctuary regulations. Despite erratic weather conditions, there is a history of overhunting sperm whales, humpback whales, and Bryde's whales within the surrounding waters of Madagascar. In an attempt to allow native populations to recuperate from these operations, the region about Madagascar was included within the Indian Ocean Whale Sanctuary by the International Whaling Commission.

Whaling records from this region have provided data used to justify scientific and historic discoveries. For example, Japanese and Filipino operation logs justified the existence of the Omura's Whale (Balaenoptera omura) in 2003.

Sovereign states
States with limited
Dependencies and
other territories

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