Madagascar - Country Commercial Guide
Investment Climate Statement (ICS)
Last published date: 2021-10-17

The U.S. Department of State Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world.  They analyze a variety of economies that are or could be markets for U.S. businesses.

Topics include Openness to Investment, Legal and Regulatory systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

These statements highlight persistent barriers to further U.S. investment.  Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy.  

Executive Summary

Much anticipated momentum on planned policy and institutional reforms and significant infrastructure projects in support of Madagascar’s investment climate did not materialize as investors had hoped in the last year. The Government of Madagascar’s 2019 Plan Emergence de Madagascar (PEM) is the Government of Madagascar’s blueprint for the country’s economic revival. However, it remains without an implementation plan that will translate aspirations into policy and then into action. Combined with the economic shocks inflicted by COVID-19, including several months of nation-wide confinement, growing concerns about transparency in decision-making, uneven anti-corruption measures, and variable respect for sanctity of contract and rule of law, Madagascar presents a more mixed investment landscape than a year ago.

After four years of steady growth, the World Bank had projected that the GDP would grow 5.2 percent in 2020 but instead it shrank 4.2 percent for the year. Sharp declines in exports, increased layoffs and factory closures, disruption of inputs and order cancelations for Malagasy products caused major economic disruptions in the short to medium term. Economic activity picked up in the last quarter of 2020 once the government lifted confinement orders. At the time of writing, COVID-19 case numbers are on the rise again, and the government may be compelled to implement new confinement measures.

A GOM Multi-Sectoral Plan (PMDU) to boost economy activity during the pandemic was not implemented. Instead, GOM financial reporting shows that, as of March 18, 2020, 80 percent of the funding disbursed for COVID-19 response went to subsidize public utility JIRAMA; the remaining 20 percent was split amongst multiple categories including medical outlays, special teacher allowances, social assistance, and assistance to businesses. Many in the private sector viewed this as a missed opportunity to utilize the USD 840 million in donor assistance that Madagascar received during 2020.

2020 saw delays on many fronts: opening of the new international airport terminal; finalizing the terms of the hydroelectric projects Sahofika and Volobé; resolving the concerns surrounding the opening of the Base Tulear mine in the south-west; and finalizing the investment law and the revisions to the mining code. Without new progress on pending high-profile investments which are foundational to Madagascar’s future growth prospects, it is unclear how the GOM will meet its aspirational development and investment goals. Whereas, momentum shifting toward a more business-friendly approach, it would present opportunities for investments and partnerships in infrastructure, textiles, energy, tourism, agri-business, mining, and health.

The Madagascar Investment Climate Statement (ICS) 2021 can be consulted  at