An island nation in the Western Indian Ocean with a population of around 18 million, Madagascar ranks among the poorest countries in the world. Over 70 percent of the population lives in poverty. During the last five years, with the support of the World Bank, the IMF, and other donors, the Government of Madagascar (GOM) was seeking to move towards a market economy conducive to private sector development, openness to foreign investment, and withdrawal of the GOM from productive sectors.
- Welcome to Madagascar
Prior to the current political instability, Madagascar appeared to be moving along a positive path of growth and poverty reduction. However, following the political crisis, economic activities declined, unemployment increased, and government revenue dropped, inducing a sharp fall in public investment.
- Madagascar Country Commercial Guide 2015 (PDF 520K)
“Madagascar elected a new President in January 2014, representing a return to constitutional order after a prolonged political crisis. Subsequently, the United States lifted all sanctions on the country, and reinstated its eligibility for preferential trade benefits under AGOA. This is expected to increase trade, and spur growth particularly in the textiles industry. Madagascar also offers opportunities in the extractive industries. It recently became a major exporter of Nickel, Cobalt and Ilmenite, while a number of international oil companies are currently exploring for hydrocarbons. Expected growth in the textiles, minerals, and hydrocarbon industries presents opportunities for U.S. exports of machinery and capital equipment to supply these sectors.
Additionally, Madagascar’s rich biodiversity and high level of endemic plants and animals could serve as the basis of potential investment in the eco-tourism sector. Despite Madagascar’s poverty, its unique natural environment, wide variety of resources, competitive labor force, and location on the crossroads between Asia and Africa offer potential long-term investment opportunities. While continued challenges exist for good governance, the prospects for political stability appear more positive since the formation of a new government.
This commercial guide is designed to provide U.S. exporters and investors an overview of the opportunities available in Madagascar, as well as a general guide to doing business in the country.”