Madagascar, a country in southern Africa located in the Indian Ocean east of Mozambique, is the fifth largest island in the world, with a land mass of 587,000 km2 and 24.8 million inhabitants in 2016.
The installation of the Senate in February 2016 completes the establishment of all the democratic institutions of the Fourth Republic. President Hery Rajaonarimampianina and his prime minister have devised a national development plan with their Government, which revolves around three pillars:
- improving governance;
- fostering economic recovery; and
- broadening access to basic social services.
The next presidential elections will be held in late 2018.
At the Conference of Donors and Investors organized by the Malagasy Government in Paris in December 2016 with the support of the African Development Bank, the World Bank Group, and the United Nations Development Programme (UNDP), Madagascar received a commitment of $6.4 billion in support of its development projects over the 2017-2020 period. This figure includes $2.1 billion in already committed but
The Malagasy economy has been steadily improving since the return to constitutional order in 2014. The upturn in public investments, resumption of external aid, and the opportunities presented by access to external markets have boosted local activities, especially the public works, construction and manufacturing industry sectors. An economic growth rate that has exceeded 4% since 2016 reflects this trend (compared to an average annual growth rate of 2.7% during the political crisis of 2009-2013).
However, efforts to combat poverty are hobbled by the country’s extreme vulnerability to climate hazards. In 2017, the agricultural sector, the main source of income for over 80% of the Malagasy population, was particularly hard hit by natural disasters. Rice production is estimated to have fallen by 20% relative to 2016. The reality is that most Malagasy people have not benefited from the improved economic situation: the extreme poverty rate of $1.90 (in purchasing power parity [PPP] terms) remained high at 76.2% in 2017.
Inflation rose sharply in 2017, reaching 9% in December, the highest price increase in seven years. This trend is due to the commodity price hike linked to the decline in rice production.
Yet, as one of the world’s leading producers of vanilla, Madagascar has continued to reap the benefits of soaring vanilla prices on the international market. Vanilla export earnings helped curb the external current account deficit, maintain the value of the local currency, and build up adequate foreign currency reserves.
The medium-term outlook is broadly positive, with a GDP growth rate projected to exceed 5%. However, the uncertainties surrounding the presidential elections slated to be held in late 2018 could have an adverse effect on growth. These elections also provide an opportunity to break the cycle of political crises and ensure reforms remain in place to promote inclusive and sustainable growth.
While Madagascar has great potential, the country has lagged on several development indicators: almost 80% of the population lives on less than $1.90 per day, with one child in two under 5 years suffering from stunting, and Madagascar is the fifth largest country in the world with the highest number of unschooled children. Moreover, the rate of access to electricity is 13%, one of the lowest in the world.
Madagascar is also one of the countries that
Last Updated: Apr 19, 2018