Country Snapshot

Population (2019, millions)¹29.96
Population Projections (2030, millions)¹35.62
Economically active population in agriculture (as % of Economically active population)12, 201980.6
CapitalAntananarivo
Surface Area (km²)²587,040
Weather¹¹In Antananarivo: Hottest month, December, 16-27°C; coldest month, July, 9-20°C; driest month, June, 8 mm average rainfall; wettest month, January, 300 mm average rainfall
Languages³Official: French and Malagasy - Others: English
Main Religions³Christian, indigenous, and  Muslim
Time⁴Eastern Africa Time (EAT) +0300 UTC
Driving Orientation⁵Right Side
Internet Country Code⁶.mg
Country Calling Code+261
Plug, Socket and Voltage⁷ Type C, D, E, J, and K - 127V/50Hz and 220V/50Hz
CurrencyMalagasy Ariary (MGA) - 1/5 = Iraimbilanja
Exchange Rate (As of 29 January, 2019, per USD)⁸3 ,456.15
GDP at Market Prices (2018, current, billions of USD)⁹12.1
GDP Growth (2018, annual %)⁹5.19
Average GDP Growth (2014-2018, annual %)⁹4.02
GDP per Capita, PPP (2018, current international $)⁹1,634
Inflation, Consumer Prices (2018, annual %)⁹7.29
Average Inflation, Consumer Prices (2014-2018, annual %)⁹7.14
Total Reserves in Months of Imports (2018)⁹3.94

Sources:
¹United Nations Population Division, Department of Economic and Social Affairs.
²COMESA Statistics, COMESTAT Data Hub.
³CIA World Factbook.
⁴Time and Date Portal.
⁵Chartsbin Portal, "Worldwide Driving Orientation by Country".
⁶Wikipedia, "List of Internet top-level domains"; and, Internet Assigned Numbers Authority, Root Zone Database.
⁷International Electrotechnical Commission, World Plugs.
⁸Banque Centrale de Madagascar.
⁹World Bank, World Development Indicators 2019.
¹¹Economist Intelligence Unit.
12AFDB Socio Economic Database

Reasons to Invest in Madagascar

Source: Madagascar Embassy in Japan Online Portal. 

Population

Population Projections (millions)

Population (2019)29.96
Population Projections (2030)35.62

Source: United Nations Population Division, Department of Economic and Social Affairs.

Population Residing in Urban Areas (%)

Population Projections (2019)37.86
Percentage of Population Residing in Urban Areas (2030)45.24

Source: United Nations Population Division, Department of Economic and Social Affairs.

Youth Literacy Rates (2017, %)

Youth Literacy Rate, Population 15-24 Years, Both Sexes 81.19
Youth Literacy Rate, Population 15-24 Years, Female 80.67
Youth Literacy Rate, Population 15-24 Years, Male 81.71

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force)

Unemployment, Total 1.65
Unemployment, Female 1.78
Unemployment, Male 1.53

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+, Modeled ILO Estimate)

Labour Force Participation Rate, Total 86.41
Labour Force Participation Rate, Female 83.59
Labour Force Participation Rate, Male89.41
Labour Force, Total (number)13,464,363

Source: World Bank, World Development Indicators 2019.

Economy - Overview

GDP

20142015201620172018
GDP at Market Prices (current, billions of USD)10.679.749.9511.4612.1
GDP Growth (annual %)3.313.114.174.35.19

Source: World Bank, World Development Indicators 2019.

Value Added by Sector (% of GDP)

Indicator20182019
Agriculture 30.9130.81
Manufacturing  16.5016.35
Industry  22.2122.03
Services 65.8866.16
Construction  3.883.85
Electricity, gas and water 1.481.47
Mining and quarrying  0.350.36
Education 2.342.34
Finance, real estate and business services  3.233.21
Public administration and Defense  6.086.08
Health and Social Work 3.003.00
Other services  8.878.90
Transport, storage and communication  30.3530.67
Wholesale and retail trade, hotels and restaurants15.3915.33

Source: AFDB Socio Economic Database.

Trade Profile

Import Partners (Imported Value, thousands, USD)

 20142015201620172018
World3,229,9932,594,0822,926,5653,593,1463,660,812
China501,251478,703624,187744,783812,759
United Arab Emirates580,298162,048164,218281,062437,020
France190,766156,354189,134226,697339,330
India201,604156,380190,579264,701250,064
Pakistan135,18087,66299,416146,068179,424

Source: International Trade Center COMTRADE Statistics.

Export Partners (Exported Value, thousands, USD)

 20142015201620172018
World2,213,6562,020,8012,222,6322,125,0712,355,824
United States of America184,533218,900287,161424,845495,278
France484,218378,983490,481284,979305,394
Japan142,609107,478113,119107,617202,552
Netherlands144,321135,15596,388128,401142,540
China98,880136,961142,133173,138137,413

Source: International Trade Center COMTRADE Statistics.

Madagascar’s Top Import Products (USD ‘000)

ChapterDescription20142015201620172018
 All products       3,229,993        2,594,082        2,926,565        3,593,146        3,660,812 
27Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes          729,505           446,949           471,490           547,417           675,318 
84Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof          203,349           182,629           202,235           281,578           305,751 
10Cereals          170,161             91,574             97,227           256,375           246,686 
87Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof          175,735           140,123           181,693           287,732           233,160 
85Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles          157,537           164,929           172,367           164,524           190,031 

Source: COMSTAT database

Madagascar’s Top Export Products (USD ‘000)

ChapterDescription20142015201620172018
 All products    2,213,656     2,020,801     2,222,632     2,125,071     2,355,824 
09Coffee, tea, mate and spices        260,213         348,749         570,291         945,062     1,034,266 
75Nickel and articles thereof        596,320         511,077         394,688         376,030         416,006 
81Other base metals; cermets; articles thereof          86,716           86,465           77,810         169,737         223,028 
71Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin          27,858           25,693           39,954         111,213         127,348 
26Ores, slag and ash          99,321           71,272           63,368         125,351         106,287 

Source: COMSTAT database

Investment Profile

FDI Inflows (millions of USD)

Year20142015201620172018
FDI Inflows 314 436 451 389 349 

Source: United Nations Conference on Trade and Development, World Investment Report 2019

FDI Outflows (millions of USD)

Year20142015201620172018
FDI Outflows (3.8)1.1 0.1  (0.9)0.1 

Source: United Nations Conference on Trade and Development, World Investment Report 2019

FDI Inward Stock (millions of USD)

Year20142015201620172018
FDI Inward Stock 6,277 5,619 5,882 6,472 6,360 

Source: United Nations Conference on Trade and Development, World Investment Report 2019

FDI Outward Stock (millions of USD)

Year20142015201620172018
FDI Outward Stock16 17 17 16 16 

Source: United Nations Conference on Trade and Development, World Investment Report 2019

FDI Inflows Main Source Countries (in terms of number of projects)

France, India, UK, United States, Canada, Germany, Mauritius, China, Japan, and Kuwait. 

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Sectors (in terms of number of projects)

Financial Services, Communications, Metals, Business Services, Food & Tobacco, Transportation, Chemicals, Coal, Oil and Natural Gas, Minerals, and Real Estate.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Companies (in terms of number of projects)

MicroCred Bank Madagascar, Airtel Madagascar, Symrise, Rio Tinto Group, CMA CGM, Verizon Communications, Forever Living Products International, Bank of India (BOI), Broll Property Group, and Vanco Energy. 

Source: Financial Times, fDi Markets, 2018

Doing Business

Overall Doing Business Ranking

2020161/190
2019161/190

Source: World Bank, Doing Business, 2020

Starting a Business

2020 Rank80/190
Procedures (number)5
Time (days)8
Cost (% of income per capita*)30.2
Paid-in Minimum Capital (% of income per capita*)0.0

*GNI per capita used: USD 440
Source: World Bank, Doing Business, 2020

Paying Taxes

Paying Taxes

2020 Rank134/190
Payments (number per year)23
Time (hours per year)183
Total Tax Rate (% of profit)38.3
Profit Tax (% of profit) 16.6
Labor Tax and Contributions (% of profit)20.3
Other Taxes (% of profit)1.5

Source: World Bank, Doing Business, 2020

Trading Across Borders

2020 Rank140/190
Time to Export: Border Compliance (hours)70
Cost to Export: Border Compliance (USD)868
Time to Export: Documentary Compliance (hours) 49
Cost to Export: Documentary Compliance (USD)117
Time to Import: Border Compliance (hours) 99
Cost to Import: Border Compliance (USD) 595
Time to Import: Documentary Compliance (hours) 58
Cost to Import: Documentary Compliance (USD) 150

Assumptions:
* It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
* It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
* A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
* Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
* If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
* The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
* Time is measured in hours, and 1 day is 24 hours.
* Costs do not include tariffs.
Source: World Bank, Doing Business, 2020

Investment Regime

Legal Framework

Investment Code - Law N. 2007-036 of the 14th of January 2008. 

Key guarantees in terms of investment protection include:

Source: Economic Development Board of Madagascar, Law N° 2007-036 ,14 January 2008 on investments in Madagascar

Investment Incentives

Special Incentives:

1- Companies investing in renewable energy, tourism, industrial, civil work and construction, and transformation:
Companies investing in renewable energy, tourism, industrial, civil work and construction, and transformation can benefit from a tax reduction equal to the tax calculated on 50% of the amount of investment that they realized during the related tax year.
2- Big Investment Mining (Investing more than $50 million)
The big investment mining law provides a minimum income tax exemption, a reduced CIT rate for the transformation entity (i.e. the entity in charge of processing the extracted minerals), exemption from custom and importation duties, and VAT reimbursement on locally purchased equipment and investments.
3- Petroleum code:
The petroleum code provides custom and importation duties exemption for hydrocarbon research, exploration, and exploitation activities.

Source: Deloitte, Guide to Fiscal Information, Key Economies in Africa 2018, PWC Madagascar Tax summary 2019