Madagascar, an island country located in the Indian ocean off the coast from southern Africa, is the fifth largest island in the world, with a land mass of 587,000 km2 and 25.6 million inhabitants. Despite having considerable natural resources, Madagascar has among the highest poverty rates in the world.
Presidential elections were held peacefully in January 2019, marking the first political alternation of power in Madagascar. President Rajoelina won 55.6% of the votes and leads the country alongside his Prime Minister, Christian Ntsay and 24 ministers.
Some ministries were merged to improve the efficiency of public administration. The Malagasy government is finalizing its new 2019-2023 Emergency Plan aimed at stimulating the economy and reducing poverty.
Legislative elections held on May 27, 2019 delivered a massive victory to President Andry Rajoelina’s support platform, with 84 of the National Assembly’s 151 seats. Commune-level elections, held on November 27, 2019, to elect 1,695 mayors followed suit and President Andry Rajoelina’s platform gained seats in the majority of cities..
Prior to the COVID-19 (coronavirus) pandemic, Madagascar was on an upward growth trajectory. Following a prolonged period of political instability and economic stagnation, growth accelerated over the last five years to reach an estimated 4.8% in 2019, its fastest pace in over a decade. The return to constitutional order and peaceful political transition in the last elections was instrumental to this economic revival, as it contributed to restore investor confidence, reopen access to key export markets, reinstate flows of concessional financing, and encourage structural reforms. These positive trends were also reflected in improved labor market conditions and declining poverty rates, although around 75% of the population was still estimated to live below the international poverty line of $1.90 in 2019, significantly higher than the regional average of 41%.
The adverse economic, social, and fiscal impact of the COVID-19 crisis will be very substantial in 2020. Global trade and travel disruptions as well as domestic containment measures are expected to result in a sharp deceleration in economic activity in 2020, with gross domestic product (GDP) growth predicted to slow to 1.2%, compared to an estimated growth rate of 5.2% just prior to the outbreak. Vulnerable populations in urban areas are particularly exposed to economic hardship and poverty traps in these circumstances. Sharply declining tax revenues and COVID-19-related spending will widen the fiscal deficit and create a sudden increase in financing needs.
These developments emphasize the importance of implementing robust emergency measures to save lives, protect vulnerable populations, and safeguard jobs in the short term as well as accelerate reforms to stimulate investment for long-term recovery, strengthen resilience to future shocks, and maintain public debt at a sustainable course. The World Bank is committed to working with the government to achieve those objectives with the fully array of its instruments.
Social Context and Development Challenges
The country’s human capital index ranking is among the lowest worldwide, and Madagascar has the world’s fourth highest rate of chronic malnutrition, with almost one child in two under five years of age suffering from stunting. An estimated 1.4 million children dropped out of primary school in 2012.
Living conditions remain difficult for the vast majority of the population, with a low rate of access to electricity (13%) in particular.
Madagascar is one of the African countries most severely affected by climate change impacts and experiences an average of three cyclones per year.
Last Updated: Jul 31, 2020