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Madagascar is the world’s fifth largest island, situated in the Indian Ocean off the coast of southern Africa. Despite considerable natural resources, however, its population of about 28 million (2020) has one of the world’s highest poverty rates.

Political Context

  • President Andry Rajoelina and Prime Minister Christian Ntsay have led the country since January 2019. Legislative elections held in May 2019 gave the president’s party a majority in the National Assembly, while communal elections in November 2019, and senatorial elections in December 2020, further consolidated the ruling party’s hold, resulting in majorities in both houses of Parliament.
  • A government reshuffle was carried out in mid-March 2022. The government has 30 ministers, including 9 women.
  • Madagascar’s next presidential elections are scheduled for 2023.

Economic Situation

  • Development prospects in Madagascar continue to be hampered by the country’s low growth potential and its exposure to frequent, deep, and persistent crises. Growth averaged about 3.5% a year in the years between the country’s return to constitutional order in 2013 and the onset of the COVID-19 pandemic in 2020. However, it was followed by a recession about three times deeper than in most of the rest of Sub-Saharan Africa, with the sharp contraction of minus 7.1% in the economy due to the economic impact of pandemic closures on Madagascar’s mining, tourism, transport, and service sectors, and to the impact of drought and livestock disease on agriculture in the South. As a result, the COVID-19 crisis reversed more than a decade of gains in income per capita and pushed the poverty rate to a new record high of 81% (measured against the international poverty line of $2.15/capita/day). The crisis was compounded in the South of Madagascar by historic droughts that led to widespread crop failure, growing food insecurity, and internal migration.
  • Growth had started to recover in 2021 but was interrupted again in 2022 by a third wave of the pandemic followed by a sequence of severe weather events and the adverse effects of the war in Ukraine. This latter is expected to have important repercussions, as it will negatively impact economic prospects in the European Union, Madagascar’s main trading partner. It has already led to significant upward pressure on global energy and food prices. In July 2022, the government raised the fuel price at the pump by an average 34%.
  • Growth projections for 2022 were downgraded to 2.6% (from 5.4%), meaning GDP per capita will stagnate and remain about 8.5 percentage points below pre-crisis levels. Growth is expected to pick up to 4.2% in 2023 and 4.6% in 2024, with structural constraints and slowing external demand preventing a faster rebound. Anticipated recovery in economic activity will translate to a gradual decline in poverty rates, from a historical high of 81.9% in 2020 to 81.2% in 2023 and 80.7% in 2024, thereby remaining above pre-crisis levels.
  • Fiscal policy was able to play a stabilizing role during the crisis, as the government ramped up public spending, but as a result, public debt increased significantly, reaching a projected 53.8% of GDP in 2021. Debt distress risks are currently assessed to be moderate, assuming ambitious efforts to boost revenue mobilization and prudent management of public debt and contingent liabilities take place.

Development Challenges

Growth remains structurally constrained by inadequate human capital and infrastructure, a high prevalence of informality, and self-subsistence agriculture, as well as governance and institutional weaknesses. Madagascar is also one of the African countries most severely affected by climate change impacts.

In the absence of bold reforms, Madagascar might take a decade to reverse the loss in average incomes that occurred during the 2020-22 COVID crisis and more than 70 years to reach current living standards in Rwanda, which is Madagascar’s closest aspirational peer.

Human capital in Madagascar ranks among the lowest worldwide. The country has the world’s fourth highest rate of chronic malnutrition; 97% of Malagasy children aged 10 are unable to read and understand a short, age-appropriate text. Madagascar has a nascent social protection system, covering only 6% of the extreme poor. Safety net spending is very low: 0.3% of GDP, compared to the average of 1.2% of GDP in sub-Saharan Africa.

The food and nutrition situation remains tenuous. According to the UN’s World Food Programme (WFP), as of mid-September 2022, 8.8 million people across Madagascar (about 33% of the population) are food insecure, one million more than three months ago. Further deterioration is expected, especially in Southern Madagascar, between December 2022 and March 2023 , when more than two million people will likely experience high levels of acute food insecurity under the Integrated Food Security Phase Classification (IPC) system used by international organizations to determine food security risks, with 284,600 people facing an emergency.

This represents a nearly 23% increase compared to the situation in the last quarter of 2022, and a nearly 81% increase compared to April-August 2021. According to preliminary IPC Nutrition survey results, nearly half a million (479,000) cases of global acute malnutrition (severe and moderate) are expected in Madagascar between September 2022 and March 2023, a 55% increase over the period ending August 2022.

Last Updated: Oct 07, 2022

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Madagascar: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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Additional Resources

Country Office Contacts

Main Office Contact
1 Rue Andriamifidy
BP 4140
Antananarivo 101, Madagascar
For general information and inquiries
Diana Styvanley
External Affairs Officer
For project-related issues and complaints