Economy Of Madagascar

As of 2020, Madagascar’s economy registered a gross domestic product (GDP) of approximately US$9.769 billion, reflecting its status as a market-oriented economy with a diverse yet predominantly agrarian base. Agriculture has historically formed the backbone of the Malagasy economy, providing livelihoods for a significant portion of the population and contributing substantially to national output. Alongside this traditional sector, emerging industries such as tourism, textiles, and mining have begun to play increasingly important roles in economic development, signaling a gradual diversification of economic activities. These sectors have attracted attention due to their potential to generate employment, foreign exchange, and investment, thereby complementing the agricultural foundation upon which the economy rests. The agricultural sector in Madagascar is characterized by the cultivation of both staple and cash crops, which are integral to both domestic consumption and export earnings. Tropical staples such as rice and cassava serve as primary food sources for the Malagasy population, underpinning food security and rural livelihoods. Rice, in particular, is a dietary staple and occupies a central place in Malagasy culture and agriculture, with cultivation concentrated in the fertile highlands and river valleys. Cassava, valued for its drought resistance, provides an important alternative carbohydrate source, especially in regions prone to climatic variability. In addition to these staples, Madagascar produces several cash crops that contribute significantly to its export revenues. Vanilla stands out as one of the country’s most valuable exports, with Madagascar recognized as the world’s leading producer of this highly prized spice. The cultivation of vanilla is labor-intensive and geographically concentrated in the northeastern regions, where favorable climatic conditions prevail. Coffee is another important cash crop, cultivated primarily in the central highlands, which has historically contributed to export earnings and rural incomes. Together, these crops form a vital component of Madagascar’s agricultural economy, linking rural producers to global markets. Madagascar’s integration into international trade frameworks has been facilitated by preferential trade agreements and customs protocols, particularly with major economic partners such as the United States and the European Union. These agreements have granted Madagascar export exemptions and tariff reductions, which have been instrumental in fostering the growth of certain industries, notably the textile sector. The Malagasy textile industry has benefited from these trade preferences, allowing it to compete more effectively in international markets by reducing the cost burden associated with tariffs and customs duties. This preferential access has encouraged investment in textile manufacturing, leading to increased production capacity and employment opportunities within the sector. The textile industry’s expansion has also contributed to Madagascar’s export diversification efforts, reducing reliance on traditional agricultural exports and enhancing the country’s integration into global value chains. These trade arrangements underscore the importance of international cooperation and market access in supporting Madagascar’s economic development objectives. The political landscape in Madagascar has had a profound impact on its economic trajectory, particularly during periods of instability. The 2009 Malagasy political crisis, which involved a contested transfer of power and was widely condemned by the international community as an illegal coup, precipitated a period of economic decline and uncertainty. This political upheaval led to the suspension of foreign aid, withdrawal of investment, and a general erosion of investor confidence, which collectively undermined economic performance. The crisis disrupted governance structures and policy continuity, exacerbating existing developmental challenges and impeding economic reforms. As a result, foreign investment flows diminished significantly, constraining capital availability and slowing economic growth. The negative economic consequences of the 2009 crisis highlighted the vulnerability of Madagascar’s economy to political instability and underscored the critical importance of stable governance for sustained development. Following the resolution of the political crisis and the resumption of democratic elections in early 2014, Madagascar began to experience a gradual recovery in foreign investment and economic activity. The restoration of constitutional order and improved political stability reassured international investors and development partners, leading to a resumption of financial flows and renewed engagement with the Malagasy economy. This recovery phase was marked by efforts to rebuild institutional capacity, attract investment, and implement economic reforms aimed at enhancing competitiveness and growth prospects. The return of foreign investment contributed to revitalizing key sectors such as mining, tourism, and manufacturing, thereby supporting job creation and export expansion. The post-2014 period thus represents a critical turning point in Madagascar’s economic history, reflecting the interplay between political stability and economic revitalization. Despite these positive developments, Madagascar continues to face significant economic and developmental challenges, as reflected in its classification by the United Nations as a least developed country (LDC). This designation takes into account multiple criteria, including low income levels, limited human capital development, and economic vulnerability. Madagascar’s LDC status highlights persistent structural constraints such as widespread poverty, inadequate infrastructure, and limited access to quality education and healthcare. These challenges impede the country’s ability to achieve sustainable and inclusive economic growth, necessitating continued international support and domestic policy efforts to address underlying development deficits. The LDC classification also enables Madagascar to benefit from specific international support measures designed to facilitate economic transformation and poverty reduction. By 2024, Madagascar’s economy has been recognized as one of the fastest growing economies globally, signaling significant progress despite the setbacks experienced in previous decades. This rapid economic growth reflects a combination of factors, including improved political stability, favorable commodity prices, increased foreign investment, and the expansion of dynamic sectors such as mining and tourism. The acceleration of growth has contributed to poverty reduction and enhanced economic opportunities for segments of the population, although challenges related to inequality and regional disparities persist. The recognition of Madagascar’s economic dynamism underscores the country’s potential to achieve sustained development, provided that structural reforms and investments in human capital and infrastructure continue to be prioritized. Long-term economic trends in Madagascar can be traced through changes in per capita GDP from 1950 to 2018, with figures adjusted for inflation to 2011 International dollars to allow for meaningful comparisons over time. This historical perspective reveals the trajectory of economic growth and development, illustrating periods of expansion as well as stagnation or decline influenced by internal and external factors. The adjustment for inflation and use of international dollars provide a standardized measure to assess real income changes and living standards across decades. Analysis of these trends offers insights into the effectiveness of economic policies, the impact of political events, and the evolution of the Malagasy economy within the broader context of global economic shifts. Understanding these long-term patterns is essential for informing future development strategies and policy interventions. The current literature and documentation on Madagascar’s economy indicate a need for additional citations and broader contextual evaluation to enhance the reliability and comprehensiveness of available information. Much of the existing coverage tends to focus on specific examples or sectors without sufficient sourcing from diverse and authoritative references. Expanding the range of citations would improve the verification of data and provide a more balanced understanding of the economic landscape. Furthermore, incorporating broader contextual analyses would help situate Madagascar’s economic developments within regional and global frameworks, facilitating more nuanced interpretations of trends and challenges. Strengthening the evidentiary base is crucial for supporting informed decision-making and scholarly research related to Madagascar’s economic prospects.

Successive French colonial administrations and the governments of independent Madagascar have consistently sought to modernize the country’s economy, tracing their efforts back to land use projects initiated by French settlers and Creole immigrants from the Mascarene Islands during the nineteenth and twentieth centuries. These settlers played a pivotal role in transforming Madagascar’s agrarian landscape by introducing a variety of cash crops tailored for export markets. Among the most significant of these were coffee, sugarcane, vanilla, cloves, and sisal, which became foundational to the island’s export economy. Alongside agricultural development, these settlers also established small-scale mining operations to exploit Madagascar’s rich mineral resources, including graphite, chromite, and uranium, thereby diversifying the economic base beyond agriculture. To facilitate the processing and marketing of these commodities, immigrant entrepreneurs founded numerous financial and commercial enterprises that underpinned the emerging export economy. Infrastructure development accompanied these commercial ventures, most notably the construction of a modest but modern railroad system designed to link production areas with ports and markets. This infrastructure expansion allowed for greater integration of the Malagasy population into the colonial economy, albeit primarily in subordinate roles. Many Malagasy worked as wage laborers on plantations, sharecroppers cultivating cash crops, or low-level employees within civil service and business enterprises. Despite this integration, ownership and the majority of economic benefits remained concentrated in the hands of foreign settlers and investors, perpetuating economic disparities. Following Madagascar’s independence in 1960, the administration of President Philibert Tsiranana maintained the prevailing economic structure dominated by French interests. French firms and capital continued to control the modern sectors of the economy, including finance, industry, and large-scale agriculture. This economic dependence, coupled with stark inequalities in wealth distribution, increasingly fueled public discontent, particularly in the southern and western regions of the island where poverty was most acute. The perception that the Malagasy economy was subservient to foreign interests and that economic benefits were unevenly distributed contributed to mounting political tensions and social unrest during Tsiranana’s tenure. The growing dissatisfaction culminated in the ousting of Tsiranana in 1972, precipitating a significant policy shift under the military regime led by General Gabriel Ramanantsoa. This new government sought to sever most of Madagascar’s economic ties with France and embarked on a program to “Malagachize” the economy, aiming to assert national control over economic resources and reduce foreign dominance. Ramanantsoa’s administration initiated efforts to nationalize key sectors and promote indigenous economic participation. However, progress proved slow and uneven, hindered by institutional inertia, limited technical expertise, and persistent economic challenges. These difficulties contributed to the regime’s instability and eventual collapse in mid-1975. The presidency of Didier Ratsiraka, commencing in 1975, marked a decisive turn toward a socialist-oriented economic model characterized by a vigorous takeover of enterprises formerly dominated by French and other foreign interests. Ratsiraka’s government launched what was termed a “revolution from above,” seeking to socialize the economy through widespread nationalization of major enterprises across various sectors. Under this policy, the state acquired either majority or minority ownership stakes in nearly all large financial institutions, transportation companies, marketing firms, mining operations, and manufacturing enterprises. Private firms that remained in operation were subjected to stringent state controls, including regulated pricing mechanisms and oversight of profit repatriation to ensure alignment with national economic objectives. In the rural sector, Ratsiraka promoted the establishment of local farming cooperatives as a means to organize agricultural production and integrate smallholders into the socialist economic framework. Complementing these initiatives, the government announced an ambitious economic plan for the years 1978 to 1980, which aimed to dramatically increase government capital investment across all sectors. The plan sought to improve the availability of goods and services, stimulate production, and enhance overall economic welfare through state-led development. Despite these efforts, the outcomes fell short of expectations. By the early 1980s, the socialist institutional reforms and increased government investment under Ratsiraka had failed to generate significant improvements in economic production or public welfare. Economic growth consistently lagged behind rapid population growth, resulting in stagnant or declining per capita income levels. Despite Madagascar’s abundant natural resources, including fertile agricultural land and valuable mineral deposits, the country remained one of the poorest in the world. The heightened levels of investment during 1978 to 1980 primarily resulted in a substantial accumulation of foreign debt, as the government relied heavily on external borrowing to finance its development programs. The mounting debt burden compelled Madagascar to enter into structural adjustment agreements with international financial institutions, notably the International Monetary Fund (IMF) and the World Bank, throughout the 1980s and early 1990s. These agreements mandated economic reforms aimed at stabilizing the economy, reducing fiscal deficits, and promoting market-oriented policies. A 1993 World Bank study starkly illustrated the consequences of the preceding socialist economic model, revealing that Madagascar’s per capita income had declined by approximately 40 percent between 1971 and 1991. This decline underscored the failure of centralized economic planning and state control to deliver sustainable growth and development. Recognizing the shortcomings of economic centralization, the Ratsiraka regime began a gradual return to a liberal economic model starting in 1980. This shift gained full momentum under the administration of Albert Zafy, who assumed the presidency in 1993. Both the late Ratsiraka and Zafy governments undertook a series of reforms aimed at liberalizing the economy and attracting foreign investment. These reforms included the privatization of previously state-owned enterprises (parastatals), the dismantling of agricultural marketing boards that had controlled commodity prices and distribution, and the ratification of liberal investment codes designed to create a more favorable environment for foreign investors. Additionally, the banking sector was privatized to improve financial efficiency and access to credit. Efforts to diversify the economy also intensified during this period, with increased emphasis on expanding traditional primary-product exports beyond vanilla and coffee to include other commodities. The government simultaneously sought to boost food production through targeted investments in agriculture, aiming to enhance food security and reduce dependence on imports. The Zafy regime explicitly prioritized economic revitalization as its foremost objective, recognizing that sustained growth and poverty reduction were essential for national stability and development. Despite these modernization efforts, as of 1994, the majority of the Malagasy population continued to engage in traditional livelihoods. Small-scale farming remained the predominant economic activity, with irrigated rice cultivation serving as the staple agricultural practice. In addition to rice, many farmers practiced dryland agriculture, cultivating cassava and other subsistence crops adapted to the island’s varied climatic zones. Zebu cattle herding was widespread, providing both agricultural labor and a source of wealth and social status. Cash crop production, particularly of vanilla, cloves, and coffee, continued to be important for rural incomes and export earnings, although these activities often remained constrained by limited access to markets and capital. In a significant development affecting Madagascar’s export economy, on April 2, 2025, former U.S. President Donald J. Trump announced the imposition of “reciprocal tariffs” of 47 percent on Malagasy goods. This policy decision posed a serious threat to Madagascar’s export sector, particularly its vanilla industry, which accounts for approximately 80 percent of the world’s vanilla supply. The tariffs jeopardized Madagascar’s access to the U.S. market, potentially disrupting global vanilla prices and the livelihoods of thousands of Malagasy farmers and exporters dependent on this critical commodity. The imposition of such high tariffs underscored the vulnerability of Madagascar’s economy to external shocks and the importance of diversifying export markets and products.

In 2018, Madagascar’s agricultural sector demonstrated significant productivity across a variety of crops, with rice emerging as the highest-yielding product by volume. The country produced approximately 4 million tons of rice, underscoring its critical role as a staple food and a cornerstone of the Malagasy diet. Rice cultivation has long been integral to Madagascar’s agrarian economy, benefiting from the fertile soils and favorable climatic conditions prevalent in much of the island’s lowlands and river valleys. This substantial output not only supports domestic food security but also sustains the livelihoods of a large segment of the rural population engaged in rice farming. Following rice, sugarcane was the second-largest crop by production weight, with an output of 3.1 million tons in 2018. Sugarcane cultivation is concentrated largely in the eastern and northern coastal regions where the tropical climate and abundant rainfall create optimal growing conditions. The crop serves both the domestic sugar industry and export markets, contributing significantly to Madagascar’s agro-industrial sector. The prominence of sugarcane reflects the diversification of agricultural production beyond staple grains, incorporating cash crops that bolster the country’s economy. Cassava, another essential staple food crop, reached a production volume of 2.5 million tons in 2018. Its resilience to drought and poor soil conditions makes cassava particularly important in regions where other crops may struggle, especially in the arid southern parts of Madagascar. As a carbohydrate-rich root crop, cassava provides a vital source of calories for many Malagasy households, often serving as a food security buffer during periods of rice scarcity. The cultivation of cassava complements rice farming and reflects the adaptive strategies of rural communities to Madagascar’s varied environmental conditions. Sweet potato production was recorded at 1 million tons in 2018, further contributing to the root crop sector. Sweet potatoes are grown widely across the island and are valued for their nutritional content, including vitamins and dietary fiber. Their cultivation supports both subsistence farming and local markets, offering an alternative carbohydrate source that can be harvested relatively quickly compared to other staples. The prominence of sweet potatoes alongside cassava and taro illustrates the diversity of root crops that underpin Madagascar’s food system. Vegetable production totaled 388 thousand tons in 2018, indicating a broad range of cultivated vegetables that contribute to dietary diversity and nutrition. The vegetable sector includes crops such as tomatoes, onions, cabbages, and leafy greens, which are grown in various agro-ecological zones across the country. These vegetables are essential for local consumption and urban markets, providing micronutrients that complement staple foods. The scale of vegetable production reflects ongoing efforts to enhance food variety and improve nutritional outcomes among the Malagasy population. Banana production reached 383 thousand tons in 2018, highlighting its role as a key fruit crop within Madagascar’s agricultural landscape. Bananas are cultivated extensively in the humid eastern regions, where the tropical climate supports year-round growth. They serve as both a staple food and a source of income for many smallholder farmers. The importance of bananas is further underscored by their contribution to food security and their integration into traditional Malagasy diets. Madagascar produced 300 thousand tons of mangoes in 2018, including related fruits such as mangosteen and guava, which are also cultivated in significant quantities. Mangoes thrive in the island’s tropical and subtropical zones, particularly in the western and northwestern regions. These fruits are consumed domestically and have potential for export, contributing to the diversification of the agricultural economy. The inclusion of mangosteen and guava alongside mangoes reflects the variety of tropical fruits that Madagascar produces, which enrich local diets and offer commercial opportunities. Potato production amounted to 257 thousand tons in 2018, supporting local food security and markets. Potatoes are primarily grown in the highland regions where cooler temperatures prevail, offering an alternative staple to rice and root crops. The crop is important for both subsistence and commercial agriculture, providing a source of carbohydrates and income for farming households. The cultivation of potatoes in the highlands complements the agricultural outputs of the lowland areas, demonstrating the geographic diversity of Madagascar’s farming systems. Taro production was recorded at 230 thousand tons in 2018, representing an important traditional root crop in Madagascar. Taro is cultivated mainly in the eastern and northern humid zones and holds cultural significance in Malagasy cuisine. Its ability to grow in wet, swampy conditions makes it a valuable crop in areas unsuitable for other staples. The continued production of taro reflects the persistence of traditional agricultural practices and the crop’s role in sustaining rural communities. Maize output reached 215 thousand tons in 2018, serving as a staple cereal crop alongside rice. Maize is grown across various regions, particularly in the central highlands and southern areas, where it provides an important source of calories and animal feed. Its adaptability to different climatic conditions and soil types makes maize a versatile crop within Madagascar’s agricultural portfolio. The production of maize supports both human consumption and livestock farming, contributing to the overall resilience of the agricultural sector. Pineapple production totaled 93 thousand tons in 2018, contributing to the country’s tropical fruit exports. Pineapples are cultivated primarily in the eastern coastal regions where the climate favors their growth. The fruit is valued both domestically and internationally, with export potential that supports rural incomes and economic development. The presence of pineapple production alongside other tropical fruits underscores Madagascar’s capacity to produce a wide range of horticultural products suited to its varied environments. Bean production reached 86 thousand tons in 2018, supporting both nutrition and agricultural diversity. Beans are an important source of protein and are grown in multiple agro-ecological zones, including the highlands and western regions. Their cultivation enhances soil fertility through nitrogen fixation, contributing to sustainable farming practices. The production of beans complements staple crops by improving dietary quality and providing farmers with additional income streams. Orange production was recorded at 83 thousand tons in 2018, reflecting the cultivation of citrus fruits within Madagascar. Oranges are grown mainly in the eastern and northern parts of the island, where the climate supports citrus orchards. The fruit is consumed locally and has potential for export, contributing to the diversification of the agricultural economy. Citrus cultivation also provides employment opportunities and supports rural livelihoods. Coconut production reached 73 thousand tons in 2018, important for both domestic use and export. Coconuts are primarily grown along the coastal regions, where they serve as a source of food, oil, and raw materials for various industries. The crop’s versatility and economic value make it a significant component of Madagascar’s agricultural sector. Coconut products contribute to household incomes and are integrated into traditional Malagasy diets and crafts. Smaller-scale agricultural products in 2018 included coffee at 57 thousand tons, cloves at 23 thousand tons, cocoa at 11 thousand tons, cashew nuts at 7 thousand tons, and vanilla at 3 thousand tons. Coffee cultivation is concentrated in the eastern highlands and remains an important export commodity, supporting numerous smallholder farmers. Cloves and vanilla are grown mainly in the northeastern regions and hold significant value in international markets. Cocoa production, while smaller in scale, contributes to the diversification of export crops. Cashew nuts are cultivated in the western dry zones and provide additional income sources for farmers. Vanilla, despite its relatively modest production volume, plays a disproportionately large role in Madagascar’s economy due to its high global demand and market value. Agriculture, encompassing fishing and forestry, constitutes Madagascar’s largest industry and employs approximately 82% of the national labor force. This sector forms the backbone of the country’s economy, underpinning rural livelihoods and contributing substantially to gross domestic product (GDP). The predominance of agriculture in employment reflects the limited industrialization and urbanization of Madagascar, with the majority of the population engaged in subsistence and small-scale commercial farming. The integration of fishing and forestry within the agricultural sector highlights the reliance on natural resources and the diverse economic activities that sustain rural communities. Madagascar’s climate is highly varied, ranging from tropical along the coastal regions to moderate in the highlands and arid in the southern areas. This climatic diversity enables the cultivation of a wide array of tropical crops such as rice, cassava, beans, and bananas. The coastal regions benefit from warm temperatures and high humidity, supporting the growth of sugarcane, coconuts, and tropical fruits. The central highlands experience cooler, more temperate conditions conducive to potato and coffee cultivation. Meanwhile, the arid south presents challenges for agriculture but is suitable for drought-resistant crops like cassava and certain legumes. This environmental heterogeneity shapes agricultural practices and crop selection across Madagascar. In 2011, agricultural products including cloves, vanilla, cacao, sugar, pepper, and coffee ranked among Madagascar’s top twelve exports by value, underscoring the sector’s economic significance. These commodities have historically driven foreign exchange earnings and contributed to the country’s trade balance. The prominence of spices such as cloves and vanilla reflects Madagascar’s unique position in global markets, while coffee and cacao exports link the country to international commodity chains. Sugar and pepper also add to the diversity of export products, highlighting the multifaceted nature of Madagascar’s agricultural economy. Madagascar holds the distinction of being the world’s largest producer of vanilla, with Malagasy vanilla accounting for approximately 80 to 85% of the global vanilla market share. This dominance results from the island’s favorable growing conditions, traditional cultivation methods, and the high quality of its vanilla beans. Vanilla production is concentrated in the northeastern Sava region, where smallholder farmers engage in labor-intensive hand pollination and curing processes. The crop’s economic importance is immense, generating substantial export revenues and supporting thousands of rural households. Madagascar’s vanilla industry is a critical component of its agricultural identity and international trade presence. In April 2025, Madagascar’s vanilla exports to the United States faced a significant threat due to the imposition of “reciprocal tariffs” amounting to 47%, declared by then U.S. President Donald J. Trump. These tariffs posed a considerable risk to the competitiveness of Malagasy vanilla in the U.S. market, potentially reducing export volumes and revenues. The tariff imposition highlighted the vulnerability of Madagascar’s agricultural exports to international trade policies and geopolitical developments. This event underscored the challenges faced by Madagascar in maintaining market access and sustaining its position in the global vanilla trade amid shifting economic and political landscapes.

Madagascar’s fishing industry is supported by a fleet comprising 66 industrial fishing vessels, which play a central role in the country’s maritime economic activities. These vessels are equipped to operate in both coastal and offshore waters, targeting a variety of fish species that contribute significantly to local consumption as well as export markets. The industrial fleet operates alongside numerous smaller artisanal fishing boats, but it is the larger vessels that dominate the commercial fishing sector, enabling Madagascar to exploit its rich marine biodiversity more effectively. This fleet’s operations are regulated under national fisheries policies aimed at sustainable resource management while maximizing economic returns. In 2023, the government of Madagascar generated substantial revenue from the fishing sector through the collection of fees and taxes associated with fishing licenses. These fiscal measures were estimated to yield approximately 3.6 billion Ariary, which is equivalent to around US$80 million. The licensing fees are imposed on both domestic and foreign fishing operators, reflecting the strategic importance of the fishing industry to the national economy. This revenue stream supports governmental efforts to monitor and control fishing activities, enforce regulations, and invest in infrastructure improvements such as port facilities and fish processing plants. The collection of these fees also underscores the government’s commitment to balancing economic development with conservation, as licensing serves as a tool to regulate fishing intensity and protect marine ecosystems. The economic significance of the fishing license revenues extends beyond direct fiscal contributions. By formalizing fishing activities through licensing, Madagascar enhances its ability to track catch volumes, species targeted, and compliance with international agreements. This data collection is critical for managing fish stocks sustainably and for negotiating fishing rights with foreign fleets. The 3.6 billion Ariary collected in 2023 reflects not only the scale of fishing operations but also the increasing value placed on Madagascar’s marine resources. It demonstrates the government’s proactive approach in leveraging its maritime assets to generate income, support livelihoods in coastal communities, and contribute to the broader national development agenda. Overall, the industrial fishing fleet and the associated licensing system form integral components of Madagascar’s fisheries sector. The fleet’s capacity enables the country to harness its extensive marine resources effectively, while the licensing fees provide essential funding for regulatory oversight and sustainable management. Together, these elements highlight the complex interplay between economic exploitation and environmental stewardship that characterizes Madagascar’s approach to its fishing industry.

Madagascar’s Export Processing Zones (EPZs), strategically located around the cities of Antananarivo and Antsirabe, have emerged as the central hubs of the nation’s garment export industry. These zones were established to attract foreign investment and stimulate industrial growth by providing favorable conditions such as tax incentives, streamlined customs procedures, and infrastructure support tailored to manufacturing and export activities. The concentration of garment factories within these EPZs has allowed Madagascar to develop a specialized textile production cluster, fostering economies of scale and enhancing the efficiency of its garment manufacturing sector. This geographical focus has also facilitated the creation of employment opportunities, particularly for women, contributing significantly to local economic development. The predominance of Madagascar’s garment exports originating from these EPZs underscores their critical role in the country’s textile sector. By centralizing production within these zones, Madagascar has been able to maintain consistent quality standards and meet the demands of international buyers. The EPZs have attracted numerous multinational apparel companies and subcontractors, which rely on the zones’ logistical advantages and regulatory benefits to produce garments competitively. This concentration has enabled Madagascar to position itself as a key player in the global apparel supply chain, with the garment sector accounting for a substantial portion of the country’s export earnings and industrial employment. The success of these zones has also encouraged the government to continue investing in infrastructure improvements and policy reforms aimed at sustaining growth in this sector. A significant factor contributing to the competitiveness of Madagascar’s garment exports is the trade advantages they receive under international agreements. Notably, these exports benefit from substantial exemptions from customs restrictions in the United States market under the African Growth and Opportunity Act (AGOA). Enacted in 2000, AGOA was designed to enhance market access for qualifying sub-Saharan African countries by allowing duty-free entry for a wide range of products, including textiles and apparel, provided they meet specific rules of origin. Madagascar’s inclusion in AGOA has enabled its garment manufacturers to export to the U.S. without facing tariffs, substantially reducing costs and increasing the attractiveness of Malagasy garments to American importers. This preferential access has played a pivotal role in expanding Madagascar’s export volumes and diversifying its trade partnerships. In addition to the benefits afforded by AGOA, Madagascar’s garment exports also enjoy preferential treatment in the European Union market under the Everything but Arms (EBA) agreement. Adopted in 2001 as part of the EU’s Generalized Scheme of Preferences, the EBA initiative grants the least developed countries duty-free and quota-free access to the EU market for all products except arms and ammunition. This arrangement has been particularly advantageous for Madagascar, allowing its textile and garment products to enter the EU market without facing customs duties or quantitative restrictions. The duty-free and quota-free access under EBA has helped Malagasy exporters to compete effectively against producers from other countries, fostering trade expansion and integration into global value chains. The combination of AGOA and EBA preferences has thus created a dual-market advantage that supports the sustained growth of Madagascar’s garment export industry. Together, the strategic location of the EPZs around Antananarivo and Antsirabe, the concentration of garment production within these zones, and the favorable trade regimes under AGOA and EBA have collectively shaped the development trajectory of Madagascar’s textile sector. These factors have enabled the country to leverage its comparative advantages, including low labor costs and proximity to key markets, to build a robust garment export industry. The continued utilization of these trade preferences remains critical for Madagascar’s textile exporters, as they navigate the competitive dynamics of the global apparel market and seek to expand their presence in both American and European markets.

Mining has historically constituted a relatively small segment of Madagascar’s economy, but in recent years it has experienced notable expansion driven by increased investment and development activities. This growth has been particularly evident in the extraction of ilmenite, a titanium-iron oxide mineral used primarily in the production of titanium dioxide pigment. Significant ilmenite deposits located near the southwestern coastal city of Tulear (also known as Toliara) and the southeastern port city of Fort Dauphin (Tolagnaro) have attracted multinational corporations seeking to capitalize on the country’s mineral wealth. These projects have marked a shift toward more industrialized mining operations, moving beyond artisanal and small-scale mining that previously dominated the sector. One of the most prominent developments in Madagascar’s mining industry was the commencement of production at the Mandena mine in Fort Dauphin by the multinational mining giant Rio Tinto. After several years of preparatory work, including extensive feasibility studies, environmental assessments, and infrastructure development, Rio Tinto officially began extracting ilmenite in January 2009. The Mandena project represented a significant milestone, as it was among the first large-scale mining operations in the country to be managed by a major global corporation. The mine’s establishment involved the construction of processing facilities, port infrastructure, and transport links designed to facilitate the export of ilmenite to international markets, thereby integrating Madagascar more fully into the global mineral supply chain. Despite the economic potential of the Mandena mine, the project generated considerable controversy and opposition from environmental organizations and local communities. Groups such as Friends of the Earth submitted detailed reports highlighting concerns about the mine’s environmental impact, including habitat destruction, biodiversity loss, and potential pollution of nearby water sources. Critics argued that the mining operations threatened the fragile ecosystems of the region, which include unique flora and fauna endemic to Madagascar. Additionally, there were apprehensions regarding the social consequences for local populations, such as displacement, disruption of traditional livelihoods, and inadequate consultation processes. These issues underscored the broader challenges of balancing economic development with environmental conservation and social equity in Madagascar’s mining sector. Beyond ilmenite, gemstone mining has remained an important and enduring component of Madagascar’s mineral economy. The island is renowned for its rich deposits of precious and semi-precious stones, including sapphires, rubies, emeralds, and various types of garnet and tourmaline. Artisanal and small-scale mining operations for gemstones are widespread, often providing vital income for rural communities. The gemstone sector contributes significantly to export revenues and has attracted international attention due to the high quality and diversity of Madagascar’s mineral specimens. However, gemstone mining also faces challenges related to regulatory oversight, environmental degradation, and fluctuating global market demand. Several other major mining and oil and gas projects have been initiated or are currently underway in Madagascar, reflecting the country’s efforts to diversify and expand its extractive industries. If these projects reach fruition and achieve commercial viability, they are expected to substantially enhance Madagascar’s economic prospects by generating employment, increasing export earnings, and attracting foreign direct investment. The government has actively promoted these ventures as part of a broader strategy to stimulate economic growth and reduce poverty, while also seeking to improve the regulatory framework governing the sector. Among the key mining projects in Madagascar, coal development at the Sakoa coalfield has attracted considerable attention. Located in the southwestern part of the island, the Sakoa basin hosts significant coal reserves that have the potential to supply both domestic energy needs and export markets. Exploration and development activities have been ongoing, with the aim of establishing a reliable coal production base that could support industrialization and electrification efforts. In addition to coal, nickel extraction near the port city of Tamatave (Toamasina) represents another critical focus area for Madagascar’s mining sector. Nickel, a metal essential for stainless steel production and battery manufacturing, has been identified in economically viable quantities, prompting exploration and feasibility studies to assess the potential for large-scale mining operations. One of the most ambitious mining ventures in Madagascar is the Ambatovy mine, a large-scale operation focused on the extraction and processing of nickel and cobalt. Ambatovy is notable for its complex ownership structure, involving multiple international stakeholders: Sherritt International holds a 40% interest, Sumitomo Corporation and Korea Resources each own 27.5%, while SNC-Lavalin retains a 5% stake. This joint venture reflects the significant capital investment and technical expertise required to develop and operate a mine of this scale. The Ambatovy project encompasses mining, ore processing, and refining facilities, designed to produce high-purity nickel and cobalt products for export. These metals are critical components in the manufacture of batteries, particularly for electric vehicles, positioning Ambatovy as a strategically important asset in the global supply chain. By the time of reporting, the Ambatovy mine had incurred cumulative costs amounting to approximately US$4.76 billion, reflecting the substantial financial commitments involved in mine development, infrastructure construction, and operational readiness. The project was scheduled to commence production in 2011, with expectations that it would become one of the largest nickel and cobalt producers in the world. The scale and complexity of Ambatovy necessitated extensive environmental and social impact assessments, as well as ongoing community engagement to address concerns related to land use, water resources, and local employment opportunities. In the oil sector, Madagascar Oil has been actively developing two significant onshore heavy oil fields: the Tsimiroro and Bemolanga fields. The Tsimiroro field is characterized by heavy oil deposits, which are more viscous and require specialized extraction techniques such as steam injection or thermal recovery to mobilize the hydrocarbons. The Bemolanga field, by contrast, contains ultra-heavy oil reserves, which are even denser and more challenging to produce economically. Both fields represent substantial potential sources of hydrocarbons that could contribute to Madagascar’s energy security and export capacity. The development of these oil fields involves complex technical and environmental considerations, including the management of greenhouse gas emissions, water usage, and the protection of surrounding ecosystems. Madagascar Oil’s activities in these fields are part of a broader trend toward exploiting unconventional oil resources, reflecting advances in technology and growing global demand for energy.

Following the political crisis that engulfed Madagascar in 2002, the newly established government undertook concerted efforts to restore both domestic and international confidence in the country’s political stability and economic prospects. Central to this strategy was close coordination with international financial institutions and donor agencies, aimed at crafting a comprehensive recovery plan that would address the immediate economic challenges and lay the groundwork for sustainable growth. This recovery blueprint was developed through a collaborative process involving the private sector and various donor representatives, reflecting a broad-based approach to economic revitalization. The plan was formally presented at the “Friends of Madagascar” conference, convened by the World Bank in Paris in July 2002, which served as a pivotal platform for securing international support and signaling Madagascar’s commitment to reform and recovery. In response to the government’s outreach and the presentation of its recovery plan, donor countries collectively pledged approximately $1 billion in assistance over a five-year period. This substantial financial commitment was intended to demonstrate confidence in Madagascar’s new government and to provide the necessary resources to implement reforms and stimulate economic growth. The infusion of donor funds was critical in stabilizing the economy and supporting key development initiatives, particularly in infrastructure and social services, which had suffered during the political turmoil. Recognizing the fundamental role of infrastructure in economic development, the Malagasy Government prioritized the rehabilitation and expansion of the country’s road network as a cornerstone of its recovery efforts. To facilitate efficient project implementation and leverage private sector expertise and capital, the government committed to fostering public-private partnerships (PPPs). This commitment was institutionalized through the establishment of a joint public-private sector steering committee, designed to oversee infrastructure projects, coordinate stakeholder interests, and ensure transparency and accountability. The emphasis on PPPs reflected a broader strategy to modernize the economy by encouraging private sector participation in traditionally public domains. In parallel with these domestic reforms, efforts to strengthen international business linkages were also pursued. In 2002, the Madagascar-U.S. Business Council was established as a collaborative initiative between the United States Agency for International Development (USAID) and Malagasy artisan producers. This organization aimed to promote trade and investment ties between Malagasy producers and U.S. markets, facilitating market access and capacity building. Subsequently, in May 2003, the U.S.-Madagascar Business Council was formed in the United States to complement these efforts, providing a platform for American businesses interested in Madagascar and fostering bilateral commercial cooperation. Both organizations continued to explore and expand cooperative opportunities, underscoring the importance of international partnerships in Madagascar’s economic development strategy. Under the leadership of former President Marc Ravalomanana, who rose to national prominence through his agro-food enterprise TIKO, the government adopted an aggressive stance toward attracting foreign investment. This approach involved systematically addressing key obstacles that had previously deterred investors, such as pervasive corruption and restrictive land-ownership laws. The administration implemented reforms aimed at enhancing transparency and legal clarity, thereby improving the overall business environment. Additionally, the government promoted the study and adoption of American and European business practices among Malagasy entrepreneurs and officials, seeking to modernize management techniques and increase competitiveness. Active outreach to foreign investors, including high-profile investment promotion campaigns and diplomatic engagement, further underscored the administration’s commitment to integrating Madagascar into the global economy. Ravalomanana’s background as a successful businessman informed his approach to governance, as he sought to apply private sector management principles to public administration. This included emphasizing efficiency, accountability, and results-oriented leadership within government institutions. However, his tenure was not without controversy; prior to his resignation, concerns arose regarding potential conflicts of interest between his government policies and his personal business interests. Notably, the government’s decision in late 2004 to grant preferential treatment for rice imports during a domestic production shortfall was viewed by some as benefiting Ravalomanana’s own commercial ventures, raising questions about the impartiality of policy decisions and the intertwining of political power with private enterprise. Madagascar’s appeal to investors has historically been anchored in its competitive and trainable workforce. Since the establishment of the export processing zone (EPZ) system in 1989, the country has successfully attracted over 200 investors, with a particular concentration in garment manufacturing. The EPZ framework offered investors favorable conditions such as tax incentives, streamlined customs procedures, and infrastructure support, which collectively enhanced the attractiveness of Madagascar as a manufacturing hub. The garment sector, in particular, benefited from these advantages, becoming a significant employer and contributor to export earnings. The growth of Madagascar’s garment manufacturing industry was further stimulated by the absence of quota restrictions on textile imports to the European market under the Lomé Convention. This preferential trade agreement allowed Malagasy exporters to access European markets without quantitative limitations, providing a competitive edge over producers in countries subject to quotas. As a result, the garment sector experienced robust expansion, capitalizing on favorable trade terms and the availability of low-cost labor. Despite these positive developments, Madagascar’s economic performance between 1992 and 1997 was constrained by several adverse factors. Economic output growth during this period averaged less than the rate of population increase, indicating stagnation in per capita income and living standards. This underperformance was largely attributed to declining global demand for coffee, one of Madagascar’s key export commodities, which reduced foreign exchange earnings and fiscal revenues. Additionally, inconsistent government commitment to economic reform led to policy uncertainty and hindered the implementation of measures necessary to stimulate growth and diversification. Although the period from 1997 to 2001 saw more solid economic growth, poverty remained a persistent challenge, particularly in rural areas where the majority of the population resided. Structural issues such as limited access to education, healthcare, and markets continued to constrain poverty reduction efforts. The benefits of economic expansion were unevenly distributed, with rural communities often excluded from the gains generated by growth in urban centers and export-oriented sectors. The political crisis triggered by the disputed presidential election in December 2001 had a profound impact on Madagascar’s economy, effectively halting economic activity in much of the country during the first half of 2002. The six-month period of uncertainty and instability disrupted trade, investment, and public services, exacerbating existing economic vulnerabilities. As a consequence, real gross domestic product (GDP) contracted sharply by 12.7%, reflecting the depth of the economic downturn. Foreign investment inflows plummeted as investors adopted a cautious stance amid the political turmoil, and Madagascar’s emerging reputation as a promising investment destination, particularly under the African Growth and Opportunity Act (AGOA), was significantly damaged. Following the resolution of the crisis, Madagascar’s economy rebounded strongly, with GDP growth exceeding 10% in 2003. This rapid recovery was driven by renewed investor confidence, increased donor support, and the resumption of economic activities across key sectors. However, the subsequent year brought new challenges; in 2004, the economy was hampered by currency depreciation and rising inflation, which reached approximately 25% by the end of the year. Despite these inflationary pressures, GDP growth remained positive at 5.3%, indicating resilience in the face of macroeconomic instability. In response to the inflationary surge, the government implemented tight monetary policies in 2005 to restore price stability. The central bank raised its key interest rate, known as the Taux Directeur, to 16% and tightened reserve requirements for commercial banks, measures designed to reduce liquidity and curb inflationary expectations. These policy actions successfully brought inflation under control, and economic growth was expected to reach around 6.5% for the year, reflecting a more stable macroeconomic environment conducive to investment and expansion. During President Ravalomanana’s administration, a comprehensive series of legislative reforms was enacted to improve the investment climate and facilitate private sector development. Key among these were the commercial companies law and the labor law, both passed in 2003, which established clearer frameworks for business formation, operation, and labor relations. In 2004, regulations governing the application of the commercial companies law and a public procurement law were introduced to enhance transparency and efficiency in government contracting. The adoption of a competition law in 2005 aimed to promote fair market practices and prevent monopolistic behavior. Further reforms included the foreign exchange law of 2006, which liberalized currency transactions, and the investment law and free zones and free enterprises law of 2007, which provided incentives and regulatory clarity to attract and retain investors. Collectively, these legal measures represented a concerted effort to modernize Madagascar’s economic institutions and foster an environment conducive to sustainable investment and growth.

Antananarivo, often described as vibrant and bustling, serves as the political and economic capital of Madagascar, functioning as the central hub for governmental institutions, commerce, and cultural activities. As the largest city in the country, it plays a pivotal role in shaping national policies and economic strategies, while also acting as the primary market for goods and services. The city’s dynamic atmosphere reflects the complex interplay between traditional Malagasy culture and modern urban development, which collectively influence the broader economic landscape of Madagascar. Despite its wealth of abundant and diverse natural resources, Madagascar remains one of the poorest countries in the world. This paradox stems from a combination of historical, environmental, and socio-economic factors that have hindered the effective utilization of its natural endowments. The island’s rich biodiversity, extensive mineral deposits, and varied ecosystems offer significant opportunities for economic growth, yet persistent poverty and underdevelopment continue to afflict a large portion of the population. Structural challenges such as inadequate infrastructure, limited access to markets, and political instability have further exacerbated the country’s economic vulnerabilities, preventing the full realization of its resource potential. Madagascar exhibits significant potential for agricultural development, largely due to its wide array of soil types and climatic diversity. The island’s geography encompasses multiple agro-ecological zones, ranging from humid tropical regions to arid highlands, which support the cultivation of a broad spectrum of crops. This diversity enables the production of staple foods such as rice, cassava, and maize, as well as cash crops including vanilla, coffee, and cloves. The variety of soil types, from fertile volcanic soils to lateritic and sandy soils, presents opportunities for tailored agricultural practices that could enhance productivity. However, this potential remains underexploited due to various environmental and socio-economic constraints. Agricultural production in Madagascar faces significant challenges from natural hazards, including cyclones, drought, and locust invasions, which have recurrently disrupted farming activities and food security. Cyclones, which frequently strike the island during the rainy season, cause widespread damage to crops, infrastructure, and rural livelihoods, often leading to severe food shortages. Periodic droughts, particularly in the southern and southwestern regions, exacerbate water scarcity and reduce crop yields, further threatening subsistence farming. Additionally, locust invasions periodically devastate vegetation and cultivated fields, compounding the vulnerability of rural communities. These natural hazards contribute to the volatility of agricultural output and underscore the fragility of Madagascar’s food systems. Traditional farming practices in Madagascar are often characterized as old-fashioned and have been identified as a contributing factor to the limitation of agricultural productivity. Many rural farmers continue to rely on subsistence methods that involve manual labor, minimal use of modern inputs such as fertilizers and improved seeds, and limited mechanization. Shifting cultivation, slash-and-burn techniques (known locally as “tavy”), and inadequate crop rotation are prevalent, leading to inefficient land use and declining soil fertility. The persistence of these traditional methods reflects a combination of cultural preferences, limited access to agricultural extension services, and economic constraints, which together impede the adoption of more sustainable and productive farming techniques. Over the past 25 years, the standard of living for the Malagasy population has declined dramatically, with many households experiencing increased poverty, food insecurity, and reduced access to basic services. Economic stagnation, coupled with environmental degradation and recurrent natural disasters, has eroded the well-being of the majority of the population. Indicators such as income levels, nutritional status, and educational attainment have shown negative trends, reflecting the cumulative impact of structural weaknesses in the economy and governance. This decline has heightened the vulnerability of communities, particularly those dependent on agriculture, and has underscored the urgent need for effective risk management and development interventions. Madagascar underwent a significant shift in its agricultural trade balance, transitioning from being a net exporter of agricultural products in the 1960s to becoming a net importer starting in 1971. During the 1960s, the country benefited from favorable agricultural conditions and export markets, particularly for commodities such as vanilla, coffee, and cloves. However, a combination of factors including declining productivity, environmental degradation, and changes in global market dynamics led to a reduction in export volumes. By 1971, Madagascar began to rely increasingly on imported foodstuffs to meet domestic demand, reflecting a structural imbalance in agricultural production and consumption. This shift has had profound implications for national food security and economic stability. Inappropriate traditional agricultural methods have contributed significantly to soil erosion and a decline in soil quality across Madagascar. Practices such as slash-and-burn agriculture, extensive deforestation, and inadequate soil conservation techniques have accelerated the loss of topsoil, reduced organic matter content, and disrupted nutrient cycles. The steep slopes of many farming areas, combined with heavy seasonal rains, exacerbate erosion processes, leading to sedimentation of waterways and loss of arable land. The degradation of soil quality undermines the capacity of the land to support sustainable crop production, thereby threatening the livelihoods of farming communities and the broader agricultural sector. The ongoing degradation of soil quality poses a serious threat to the fundamental basis of survival for the people of Madagascar, as agriculture remains the primary source of food and income for the majority of the population. Diminished soil fertility leads to lower crop yields, increased vulnerability to food shortages, and heightened poverty levels. This environmental decline also contributes to rural out-migration and social instability, as communities struggle to maintain their livelihoods. Efforts to address soil degradation through improved land management, reforestation, and the promotion of sustainable agricultural practices are critical to safeguarding the long-term food security and economic resilience of Madagascar.

Madagascar possesses a notably high potential for photovoltaic power generation, positioning solar energy as a significant opportunity for the country’s future energy development. The island’s geographic location near the equator ensures abundant sunlight throughout the year, creating ideal conditions for harnessing solar power. This potential is underscored by the vast expanses of land available for solar installations, which, if effectively utilized, could substantially diversify Madagascar’s energy portfolio and reduce reliance on fossil fuels. However, despite this promising resource, the deployment of photovoltaic technology remains limited, reflecting broader challenges in the energy sector. In 2018, only approximately 15% of Madagascar’s population had access to electricity, a figure that highlighted the country’s limited electrification and the widespread energy poverty affecting much of its population. This low rate of access was indicative of infrastructural deficits, particularly in rural and remote areas, where grid connectivity was minimal or nonexistent. The scarcity of electricity access constrained economic development, education, healthcare, and overall quality of life for the majority of Malagasy citizens. Efforts to improve electrification faced obstacles such as inadequate investment, logistical difficulties, and a lack of comprehensive national planning. By 2023, Madagascar had made notable progress in expanding electrical infrastructure and services, with the proportion of the population having access to electricity rising to 34%. This more than doubling of electrification rates within a five-year period reflected concerted efforts by the government, international donors, and private sector actors to enhance energy access. Initiatives included the extension of the national grid, the promotion of off-grid solutions such as solar home systems, and the implementation of rural electrification programs. Although this progress marked a positive trend, it also underscored the ongoing challenge of achieving universal electricity access in a country characterized by dispersed settlements and difficult terrain. Hydropower represents another critical component of Madagascar’s renewable energy potential. The country’s technically feasible hydropower potential is estimated at approximately 180,000 gigawatt-hours (GWh), a figure that illustrates the vast renewable energy resource available from its numerous rivers and watercourses. This potential, if fully developed, could provide a reliable and sustainable source of electricity to meet growing demand while reducing dependence on imported fuels. The hydrological characteristics of Madagascar, including significant rainfall and varied topography, contribute to this abundant hydropower capacity. Despite this substantial potential, less than 1% of Madagascar’s hydropower capacity has been developed to date, indicating a significant underutilization of available resources. Factors contributing to this underdevelopment include financial constraints, technical challenges, environmental concerns, and regulatory hurdles. The lack of sufficient investment and infrastructure has limited the construction of new hydropower plants and the modernization of existing facilities. Additionally, concerns about the ecological impact of large-scale hydropower projects have influenced decision-making processes, leading to cautious development strategies. Currently, Madagascar has an installed hydropower capacity of 162 megawatts (MW), which plays a dominant role in the country’s electricity supply. Hydropower accounts for approximately 61% of Madagascar’s total electricity production, underscoring its importance within the national energy mix. This reliance on hydropower reflects both the availability of water resources and the relative cost-effectiveness of hydroelectric generation compared to fossil fuel alternatives. The existing hydropower infrastructure includes several plants of varying sizes, which collectively contribute to meeting the electricity needs of urban centers and industrial users. Although Madagascar’s enormous potential for solar power exploitation is widely recognized, the general lack of infrastructure presents a major barrier to fully harnessing this renewable energy source. The absence of a robust transmission and distribution network limits the integration of solar energy into the national grid, while the scarcity of financing options and technical expertise hampers the deployment of solar technologies at scale. Moreover, logistical challenges related to transportation and maintenance in remote areas further complicate efforts to expand solar power utilization. Addressing these infrastructural deficits is essential for unlocking the full benefits of solar energy and achieving a more diversified and sustainable energy sector in Madagascar.

In the year 2000, Madagascar embarked on a significant initiative to address its pervasive national poverty challenges by beginning the preparation of a Poverty Reduction Strategy Paper (PRSP). This effort was undertaken as part of the broader Heavily Indebted Poor Countries (HIPC) Initiative, a global program designed to ensure that the poorest countries in the world could receive debt relief and implement strategies aimed at sustainable poverty reduction. The PRSP was intended to serve as a comprehensive framework that would guide the government’s policies and actions toward improving the socio-economic conditions of its population, emphasizing transparency, participation, and alignment with international development goals. Later that same year, in December 2000, Madagascar reached a critical juncture when the boards of the International Monetary Fund (IMF) and the World Bank formally confirmed the country’s eligibility for assistance under the HIPC Initiative. This confirmation was a pivotal recognition that Madagascar had met the necessary criteria to receive debt relief, and it marked the country’s attainment of the so-called “decision point” within the HIPC process. Reaching this decision point meant that Madagascar had demonstrated a commitment to implementing sound economic policies and poverty reduction measures, thereby qualifying for interim debt relief and the potential for further assistance contingent on continued reforms. Shortly after this milestone, on March 1, 2001, the IMF Board approved a grant amounting to $103 million for Madagascar to be disbursed over the period from 2001 to 2003 under the Poverty Reduction and Growth Facility (PRGF). This financial support was specifically designed to enhance the country’s capacity to improve access to essential services such as health care, education, rural infrastructure, and water supply. Moreover, the grant aimed to provide direct support to local communities, thereby fostering grassroots development and empowering vulnerable populations. The PRGF funding was integral to Madagascar’s broader strategy of addressing structural impediments to growth and human development, particularly in rural areas where poverty was most entrenched. In a complementary development, on March 7, 2001, the Paris Club—a group of creditor nations that coordinate debt restructuring for indebted countries—agreed to cancel $161 million of Madagascar’s external debt. This debt cancellation was part of the comprehensive debt relief measures under the HIPC Initiative and represented a significant alleviation of the country’s debt burden. By reducing the debt service obligations, Madagascar was afforded greater fiscal space to allocate resources toward poverty reduction and social development programs. The Paris Club’s decision underscored the international community’s support for Madagascar’s reform efforts and its commitment to facilitating sustainable economic recovery. Parallel to these developments, the African Development Bank (ADB) played a crucial role in Madagascar’s debt relief and poverty reduction agenda. On February 28, 2001, the ADB approved a debt cancellation amounting to $71.46 million under the HIPC framework, thereby further easing the country’s external debt obligations. This cancellation was complemented by an additional credit facility of $20 million granted in June 2001, which was specifically targeted to bolster Madagascar’s efforts in combating AIDS and alleviating poverty. The ADB’s financial support was instrumental in addressing two of the country’s most pressing social challenges, enabling the government to implement health interventions and poverty alleviation programs that were critical for improving the well-being of its population. The cumulative impact of these debt relief measures, combined with Madagascar’s prior economic reforms, contributed to a notable improvement in the country’s macroeconomic performance during the late 1990s and into 2000. Specifically, Madagascar achieved average annual GDP growth rates that consistently surpassed the population growth rate of 2.8 percent, indicating a positive trend toward economic expansion and improved living standards. The recorded GDP growth rates were 3.5 percent in 1997, 3.9 percent in 1998, 4.7 percent in 1999, and 4.8 percent in 2000. These figures reflected the effectiveness of the government’s policy reforms and the beneficial effects of debt relief, which together enhanced fiscal stability, increased investment, and supported the development of key sectors such as agriculture, manufacturing, and services. A significant milestone in Madagascar’s poverty reduction and debt relief journey was reached in October 2004, when the boards of the IMF and the World Bank determined that the country had attained the “completion point” under the enhanced HIPC Initiative. Achieving this status signified that Madagascar had satisfactorily implemented the required reforms and poverty reduction strategies outlined in its PRSP and had met all conditions necessary to receive the full and irrevocable debt relief package. This completion point marked the culmination of a multi-year process that not only reduced Madagascar’s external debt burden substantially but also strengthened its institutional capacity to pursue sustainable economic growth and social development. The enhanced HIPC Initiative’s completion point thus represented a critical endorsement of Madagascar’s efforts to break the cycle of poverty and build a foundation for long-term prosperity.

Child labour is notably prevalent in Brickaville, a city situated in the Atsinanana region of Madagascar, where it is especially concentrated within small-scale mining operations. These mining activities encompass a range of extractive processes, including salt mining, quarry work, and the collection of gem and gold ore, all of which frequently involve the labor of children. The participation of children in these hazardous environments is significant, with approximately 58% of those engaged in mining activities being younger than 12 years old. This early entry into labor reflects the broader socio-economic vulnerabilities faced by families in the region, where limited access to education and economic hardship compel children to contribute to household income through physically demanding and often dangerous work. According to findings from the International Programme on the Elimination of Child Labour (IPEC), the children working in Madagascar’s small-scale mines typically come from families experiencing precarious economic conditions. These households often lack stable income sources and social safety nets, which drives children into labor as a survival strategy. The reliance on child labour in mining is further exacerbated by the informal nature of these operations, which are frequently unregulated and operate outside the scope of formal labor protections. The combination of poverty, limited educational opportunities, and the informal economy creates an environment in which child labour becomes a widespread and entrenched practice. A 2010 report published by a United States-based organization provided a comprehensive estimate of child labour prevalence across Madagascar, revealing that approximately 22% of children aged 5 to 14 years—amounting to over 1.2 million children—were engaged in some form of work. This figure underscores the extensive scale of child labour in the country and highlights the challenges faced in addressing this issue. Complementing this data, a French-based group reported even higher numbers, estimating that the total number of child labourers in Madagascar exceeds 2.4 million. This broader estimate includes over 540,000 children aged between 5 and 9 years who are actively working, indicating that child labour affects very young children as well, often at the expense of their health, education, and overall development. The vast majority of child labour in Madagascar, approximately 87%, occurs within the agricultural sector. Children are primarily involved in the production of key export and subsistence crops such as vanilla, tea, cotton, cocoa, copra (dried coconut meat), and sisal. Beyond crop cultivation, children also participate in shrimp harvesting and various fishing activities, which are integral to both local economies and food security. The agricultural sector’s dominance in child labour reflects the country’s economic structure, where agriculture remains the primary source of livelihood for much of the population. The involvement of children in these labor-intensive activities often entails long hours, exposure to hazardous conditions, and limited access to education, perpetuating cycles of poverty and limiting future opportunities. In addition to agricultural and mining sectors, Malagasy children are also employed in domestic service, where they typically work an average of 12 hours per day. This form of child labour is often hidden from public view, occurring within private households where children may be responsible for a wide range of tasks including cleaning, cooking, and childcare. The long working hours and isolation associated with domestic service can have detrimental effects on the physical and psychological well-being of these children, as well as restrict their access to schooling and social development. Domestic child labour is a critical concern due to its invisibility and the difficulty in monitoring and regulating such work environments. Prior to 2009, multiple internationally funded initiatives were active in Madagascar with the aim of reducing and preventing child labour. These programs were supported by a range of international organizations and donors, focusing on interventions such as improving access to education, raising awareness about the harms of child labour, and promoting alternative livelihoods for vulnerable families. The coordinated efforts sought to address the root causes of child labour by tackling poverty and enhancing social protection mechanisms, thereby creating conditions conducive to the withdrawal of children from exploitative work. However, the political landscape shifted dramatically following the 2009 coup d’état in Madagascar, which led to significant disruptions in international cooperation and aid. In response to the political crisis, many international donors, including the African Union, European Union, World Bank, and the United States, suspended funding to the country. This withdrawal of financial support caused the cessation of numerous child labour reduction programs, undermining progress made in previous years. The suspension of aid not only stalled ongoing initiatives but also exacerbated the socio-economic conditions that contribute to child labour, leaving many vulnerable children without the protections and opportunities that had been gradually established. The political instability thus had a direct and adverse impact on efforts to combat child labour in Madagascar, highlighting the intricate link between governance, international aid, and social development outcomes.

In 1980, Madagascar’s economy was characterized by a gross domestic product (GDP) valued at 8.867 billion US dollars in purchasing power parity (PPP) terms. The GDP per capita stood at 1,021.7 US dollars PPP, reflecting the average economic output per individual within the country. Nominal GDP, which measures the market value of all final goods and services produced without adjusting for inflation, was recorded at 5.202 billion US dollars. The real GDP growth rate, which accounts for inflation and provides a more accurate measure of economic expansion, was modest at 0.788%. Inflation during this period was notably high, reaching 18.278%, indicating significant upward pressure on prices within the economy. Data regarding government debt for this year was not available, limiting the assessment of fiscal sustainability at the time. The subsequent year, 1981, saw a slight contraction in Madagascar’s economic output, with GDP decreasing marginally to 8.755 billion US dollars PPP. Correspondingly, GDP per capita declined to 982.4 US dollars PPP, suggesting a reduction in average economic well-being. Nominal GDP also fell to 4.759 billion US dollars, reflecting the overall downturn in economic activity. The real GDP growth rate was sharply negative at −9.800%, indicating a significant recession. Inflation escalated dramatically to 30.457%, exacerbating the economic challenges faced by the country. Government debt data remained unavailable, continuing the gap in fiscal information. In 1982, Madagascar experienced a partial recovery in its GDP, which increased to 9.119 billion US dollars PPP. The GDP per capita was recorded at 996.6 US dollars PPP, showing a slight improvement from the previous year. Nominal GDP remained relatively stable at 4.785 billion US dollars. Despite these gains, the real GDP growth rate remained negative at −1.900%, indicating that the economy was still contracting when adjusted for inflation. Inflation further intensified, reaching 31.907%, underscoring persistent macroeconomic instability. Government debt figures for this year were also not reported. The year 1983 marked a period of modest economic growth, with GDP rising to 9.562 billion US dollars PPP and GDP per capita increasing to 1,017.7 US dollars PPP. However, nominal GDP declined slightly to 4.686 billion US dollars. The real GDP growth rate turned positive at 0.900%, signaling a tentative economic recovery. Inflation decreased significantly to 19.469%, suggesting some stabilization in price levels. Government debt data continued to be unavailable, limiting comprehensive fiscal analysis. By 1984, Madagascar’s GDP had reached 10.081 billion US dollars PPP, with GDP per capita at 1,045.0 US dollars PPP, indicating steady economic growth. Nominal GDP, however, fell to 3.906 billion US dollars, a decline that may reflect currency valuation changes or statistical discrepancies. The real GDP growth rate improved to 1.760%, and inflation dropped substantially to 9.720%, pointing toward improved macroeconomic conditions. Government debt data remained unreported for this period. In 1985, the economy expanded further, with GDP increasing to 10.520 billion US dollars PPP and GDP per capita rising to 1,062.0 US dollars PPP. Nominal GDP was recorded at 3.803 billion US dollars, continuing the downward trend observed in previous years. Real GDP growth slowed slightly to 1.156%, while inflation edged up to 10.566%. Data on government debt was still not available, maintaining the opacity of fiscal health. The 1986 economic indicators showed continued growth, with GDP reaching 10.942 billion US dollars PPP and GDP per capita at 1,075.8 US dollars PPP. Nominal GDP rebounded to 4.348 billion US dollars. Real GDP growth improved to 1.960%, reflecting a more robust expansion. Inflation rose to 14.492%, indicating renewed inflationary pressures. Government debt data remained unrecorded. In 1987, Madagascar’s GDP increased to 11.345 billion US dollars PPP, with GDP per capita at 1,086.2 US dollars PPP. Nominal GDP declined to 3.213 billion US dollars, a significant drop that may be attributed to currency fluctuations or economic adjustments. The real GDP growth rate was 1.175%, showing moderate growth. Inflation remained elevated at 15.461%. Government debt data continued to be unavailable. The year 1988 saw a notable increase in GDP to 12.145 billion US dollars PPP and GDP per capita to 1,132.5 US dollars PPP. Nominal GDP was relatively stable at 3.189 billion US dollars. Real GDP growth accelerated to 3.407%, indicating stronger economic performance. However, inflation surged to 26.338%, reflecting ongoing volatility in price levels. Government debt figures were not reported. In 1989, Madagascar’s GDP reached 13.135 billion US dollars PPP, with GDP per capita rising to 1,192.9 US dollars PPP. Nominal GDP remained steady at 3.176 billion US dollars. Real GDP growth increased further to 4.075%, marking a period of sustained economic expansion. Inflation decreased sharply to 9.017%, suggesting improved price stability. Government debt data was still not available. The year 1990 marked continued growth, with GDP climbing to 14.053 billion US dollars PPP and GDP per capita at 1,243.0 US dollars PPP. Nominal GDP increased to 3.931 billion US dollars. Real GDP growth was recorded at 3.129%, reflecting ongoing economic development. Inflation rose moderately to 11.859%. Notably, government debt was reported for the first time in this period, amounting to 92.701% of GDP, indicating a substantial fiscal burden relative to the size of the economy. In 1991, Madagascar experienced an economic contraction, with GDP decreasing to 13.612 billion US dollars PPP and GDP per capita falling to 1,172.6 US dollars PPP. Nominal GDP dropped to 3.255 billion US dollars. The real GDP growth rate was negative at −6.306%, signaling a significant downturn. Inflation declined to 8.540%, potentially reflecting reduced demand pressures. Government debt increased markedly to 113.835% of GDP, highlighting growing fiscal challenges. The economy showed signs of recovery in 1992, with GDP rising to 14.087 billion US dollars PPP and GDP per capita at 1,181.8 US dollars PPP. Nominal GDP improved to 3.715 billion US dollars. Real GDP growth was positive at 1.181%, indicating a return to expansion. Inflation increased to 14.567%, suggesting renewed inflationary pressures. Government debt slightly decreased to 110.875% of GDP but remained at a high level. In 1993, Madagascar’s GDP grew to 14.724 billion US dollars PPP, with GDP per capita at 1,203.0 US dollars PPP. Nominal GDP rose to 4.063 billion US dollars. The real GDP growth rate improved to 2.100%, reflecting strengthening economic activity. Inflation moderated to 9.990%, indicating better control over price increases. Government debt decreased to 105.192% of GDP, showing gradual fiscal consolidation. The year 1994 saw GDP increase marginally to 15.032 billion US dollars PPP, though GDP per capita slightly declined to 1,192.3 US dollars PPP. Nominal GDP fell to 3.522 billion US dollars. Real GDP growth was nearly stagnant at −0.042%, indicating economic stagnation. Inflation spiked dramatically to 38.992%, reflecting severe price instability. Government debt reduced to 95.963% of GDP, marking a significant improvement in fiscal health. Madagascar’s economy in 1995 expanded with GDP reaching 15.605 billion US dollars PPP and GDP per capita at 1,201.6 US dollars PPP. Nominal GDP increased to 3.838 billion US dollars. Real GDP growth was recorded at 1.679%, showing modest progress. Inflation surged to 49.036%, indicating persistent inflationary challenges. Government debt remained stable at 95.837% of GDP. In 1996, GDP rose to 16.233 billion US dollars PPP, with GDP per capita at 1,213.4 US dollars PPP. Nominal GDP increased significantly to 4.932 billion US dollars. Real GDP growth improved to 2.154%, reflecting stronger economic momentum. Inflation decreased substantially to 19.761%, suggesting better inflation management. Government debt slightly increased to 98.716% of GDP. The 1997 economic data indicated further growth, with GDP reaching 17.123 billion US dollars PPP and GDP per capita at 1,242.5 US dollars PPP. Nominal GDP was 4.263 billion US dollars. Real GDP growth accelerated to 3.693%, marking robust economic expansion. Inflation fell sharply to 4.492%, indicating improved price stability. Government debt decreased to 89.740% of GDP, reflecting ongoing fiscal consolidation. In 1998, Madagascar’s GDP increased to 17.994 billion US dollars PPP, with GDP per capita rising to 1,267.5 US dollars PPP. Nominal GDP was 4.402 billion US dollars. Real GDP growth was strong at 3.917%. Inflation increased moderately to 6.210%. Government debt rose to 108.460% of GDP, indicating a significant deterioration in fiscal position. The year 1999 saw GDP reach 19.105 billion US dollars PPP, with GDP per capita at 1,306.5 US dollars PPP. Nominal GDP slightly decreased to 4.278 billion US dollars. Real GDP growth accelerated to 4.699%, reflecting continued economic expansion. Inflation was moderate at 7.189%. Government debt remained high at 104.115% of GDP. In 2000, Madagascar’s GDP increased to 20.408 billion US dollars PPP, with GDP per capita at 1,354.9 US dollars PPP. Nominal GDP rose to 4.629 billion US dollars. Real GDP growth was 4.457%, indicating sustained economic growth. Inflation increased to 11.570%. Government debt decreased significantly to 90.212% of GDP, suggesting improved fiscal discipline. The year 2001 marked further economic growth, with GDP reaching 22.116 billion US dollars PPP and GDP per capita at 1,425.4 US dollars PPP. Nominal GDP increased to 5.438 billion US dollars. Real GDP growth accelerated to 5.980%, reflecting strong economic performance. Inflation moderated to 7.917%. Government debt continued to decline to 82.144% of GDP. In 2002, Madagascar experienced a sharp economic contraction, with GDP falling to 19.674 billion US dollars PPP and GDP per capita decreasing to 1,230.9 US dollars PPP. Nominal GDP was 5.352 billion US dollars. Real GDP growth was deeply negative at −12.408%, indicating a severe recession. Inflation rose to 16.499%. Government debt slightly increased to 86.693% of GDP. The economy rebounded in 2003, with GDP increasing to 22.025 billion US dollars PPP and GDP per capita at 1,337.7 US dollars PPP. Nominal GDP rose to 6.372 billion US dollars. Real GDP growth surged to 9.785%, reflecting a strong recovery. Inflation was negative at −1.704%, indicating deflationary conditions. Government debt was 85.862% of GDP. In 2004, Madagascar’s GDP grew to 23.805 billion US dollars PPP, with GDP per capita at 1,403.6 US dollars PPP. Nominal GDP decreased to 5.065 billion US dollars. Real GDP growth was 5.257%, showing continued expansion. Inflation increased to 13.956%. Government debt decreased to 81.896% of GDP. The year 2005 saw GDP rise to 25.719 billion US dollars PPP, with GDP per capita at 1,472.1 US dollars PPP. Nominal GDP increased to 5.859 billion US dollars. Real GDP growth was 4.756%, reflecting steady growth. Inflation rose to 18.364%. Government debt further reduced to 74.366% of GDP. In 2006, Madagascar’s GDP reached 27.944 billion US dollars PPP, with GDP per capita at 1,552.8 US dollars PPP. Nominal GDP was 6.396 billion US dollars. Real GDP growth improved to 5.399%. Inflation decreased to 10.766%. Government debt significantly declined to 32.226% of GDP, marking a substantial improvement in fiscal health. The 2007 economic data showed GDP increasing to 30.338 billion US dollars PPP, with GDP per capita at 1,636.6 US dollars PPP. Nominal GDP rose sharply to 8.525 billion US dollars. Real GDP growth was 5.711%, indicating robust economic performance. Inflation was moderate at 10.288%. Government debt further decreased to 28.210% of GDP. In 2008, Madagascar’s GDP grew to 32.996 billion US dollars PPP, with GDP per capita at 1,727.9 US dollars PPP. Nominal GDP increased substantially to 10.725 billion US dollars. Real GDP growth accelerated to 6.713%, reflecting strong economic momentum. Inflation declined to 9.297%. Government debt slightly increased to 31.010% of GDP. The year 2009 saw a decline in GDP to 31.886 billion US dollars PPP, with GDP per capita falling to 1,621.0 US dollars PPP. Nominal GDP decreased to 9.617 billion US dollars. The real GDP growth rate was negative at −3.979%, indicating an economic contraction. Inflation remained relatively stable at 8.954%. Data on government debt for this year was incomplete or unavailable.

In 1993, income distribution in Madagascar exhibited significant inequality, with the lowest 10% of households accounting for only 2.3% of the total income or consumption within the country. This stark disparity was contrasted by the highest 10% of households, which commanded a disproportionately large share, accounting for 34.9% of total income or consumption. Such figures underscored the concentration of wealth among a relatively small segment of the population, reflecting broader socioeconomic challenges related to poverty and wealth distribution. The data from this period highlighted the difficulties faced by the majority of Malagasy citizens in accessing economic resources, which in turn influenced policy discussions on social equity and economic reforms. By 1999, Madagascar experienced a notable growth in industrial production, with the rate estimated at approximately 5%. This growth rate indicated a period of industrial expansion and development, contributing to the diversification of the Malagasy economy beyond its traditional reliance on agriculture and primary commodities. The increase in industrial output was likely driven by improvements in manufacturing, mining, and other industrial sectors, which played a role in enhancing the country’s economic resilience. Such growth also suggested a gradual shift toward modernization and increased participation in regional and global markets, although challenges such as infrastructure limitations and investment constraints remained. Electricity production in Madagascar in 2009 was estimated at 1.35 billion kilowatt-hours (kWh), reflecting the country’s efforts to meet the growing demand for energy amid its development trajectory. The composition of this electricity production was predominantly reliant on fossil fuels, which accounted for 69.5% of the total generated electricity. This heavy dependence on fossil fuel sources indicated both the availability of such resources and the infrastructural investments made in thermal power plants. Hydroelectric power contributed a significant 30.5% to the electricity mix, showcasing Madagascar’s utilization of its abundant water resources to generate renewable energy. Notably, nuclear and other sources contributed 0% to the electricity production, indicating that the country had not developed or incorporated nuclear energy or alternative sources such as wind or solar into its energy portfolio by that time. Electricity consumption in Madagascar during 2009 was estimated at 1.256 billion kWh, which was slightly lower than the total electricity production. This consumption level reflected the energy needs of households, industries, and services across the country. The gap between production and consumption could be attributed to factors such as transmission losses, inefficiencies in the distribution network, or energy storage. The consumption figures also highlighted the relatively limited access to electricity for large portions of the population, especially in rural areas, where infrastructure development lagged behind urban centers. This underscored ongoing challenges in expanding reliable and affordable electricity access to support economic growth and improve living standards. In 2010, Madagascar neither exported nor imported electricity, with both electricity exports and imports recorded at zero kilowatt-hours (kWh). This absence of cross-border electricity trade indicated that Madagascar’s electricity system operated in isolation from neighboring countries and regional power grids. The lack of electricity trade could be attributed to geographical, infrastructural, and economic factors, including the island nature of Madagascar, which limited interconnections with continental power networks. Consequently, the country relied entirely on its domestic generation capacity to meet its electricity needs, emphasizing the importance of internal energy resource management and development. The exchange rate of the Malagasy ariary (MGA) against the US dollar exhibited a trend of gradual depreciation from 2008 through 2012. In 2008, the exchange rate stood at 1,654.78 MGA per US dollar, reflecting the relative strength of the ariary at that time. Over the subsequent years, the currency weakened steadily, with the rate recorded at 1,956.2 in 2009, 2,090 in 2010, and 2,025.1 in 2011. By 2012, the estimated exchange rate had further depreciated to 2,195 MGA per US dollar. This depreciation trend indicated economic pressures such as inflation, trade imbalances, or fiscal challenges that affected the Malagasy economy and its currency valuation. The weakening of the ariary had implications for import costs, foreign debt servicing, and overall economic stability, influencing monetary policy decisions and economic planning during this period.