Overview

  • Madagascar, an island state 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 25.5 million inhabitants in 2017. Despite its abundant natural resources, it is one of the poorest countries in the world.

    Political context

    The presidential elections were held peacefully in January 2019, and marked the first political alternation of power in Madagascar. President Rajoelina won the elections with 55.6% of the vote and an election manifesto promising to scale up growth and radically reduce poverty. Prime Minister Christian Ntsay was reappointed to the head of government with a cabinet of 22 ministers. Some ministries were merged to improve public administration efficiency. The Malagasy Government is preparing its new 2019-2023 Emergency Plan based on the 13 commitments made by the president. The legislative elections are scheduled for May 27, 2019.

    Economic situation

    The economy remained upbeat with growth estimated at 5.2% in 2018, a level comparable with the last five years. Private sector buoyancy, particularly flourishing service sector growth, was underpinned by positive macroeconomic conditions including a drop in inflation from 8.3% in 2017 to 7.3% in 2018, a relatively stable real effective exchange rate, and a fiscal deficit under control. The financial, logistics, and real property development sectors also posted growth. Good weather conditions brought an upturn in agricultural production in 2018.

    However, these positive economic results barely touched the poverty rate, which inched back from 77.7% in 2014 to 75.1% in 2018. Agriculture, as the country’s leading employer and livelihood of 80% of the population, plays a key role in progress with poverty in Madagascar. Yet agricultural growth has been too low and volatile in recent years, generally trending at less than demographic growth.

    The economy is forecast to stay on its growth course in the coming years, driven by the increase in public and private sector investments, including by public-private partnerships (PPPs). Growth in exports is projected to remain high owing to strong global demand for nickel and vanilla.

    Social context

    Madagascar is among the poorest countries in the world with 75% of the population living on less than $1.90 per day. The country’s human capital index is also one of the lowest worldwide and it has the world’s fourth highest rate of chronic malnutrition, with one child in two under five years suffering from stunting. An estimated 1.4 million children dropped out of primary school in 2012, the fifth highest number in the world.

    Living conditions remain difficult for the vast majority of the population. The rate of access to electricity is just 13%, one of the lowest in the world, and the country is also one of the hardest hit by extreme weather events in Africa, with an average of three cyclones per year.

    Last Updated: Jun 06, 2019

  • World Bank Group Strategy and Engagement

    The World Bank Group’s engagement in Madagascar is steered by the Country Partner Framework (CPF) for 2017-2021. Developed in consultation with the Government and all the other stakeholders (civil society, private sector, etc.) and aligned with the National Development Plan, the CPF aims to strengthen resilience and reduce the country's fragility, while promoting inclusive economic growth. Recommendations drawn from the Systematic Country Diagnostic (SCD), published in 2015, served as a basis for formulating the CPF’s eight objectives:

    • Strengthened children’s human development
    • Enhanced resilience of vulnerable households’ livelihoods
    • Enhanced and effective decentralization
    • Enhanced transparency and accountability
    • Increased fiscal capacity to finance priority social and infrastructure spending
    • Improved business environment and access to finance
    • Strengthened rural productivity
    • Improved access to energy and transport

    This engagement will support the Malagasy Government’s efforts to achieve a number of flagship outcomes, such as:

    • Reduce stunting in children under five years of age by 1 percentage point per annum in regions where chronic malnutrition rates are highest;
    • Increase the number of children completing the primary school cycle by 25%;
    • Increase the rate of access to electricity to 20%.

    To achieve these outcomes, the World Bank Group pledged at the Conference of Donors in late 2016 to invest $1.3 billion in Madagascar over a three-year period, including $1 billion in IDA funds and $300 million in IFC financing for the private sector. To date, IDA18’s indicative envelope for Madagascar stands at $1 billion and nearly 76% of these funds have already been earmarked to finance actions in the areas of early childhood, resilient agriculture, financial inclusion, and energy.

    All told, the World Bank (IDA) is financing the implementation of 16 operations representing a total commitment of $1.24 billion.

    Last Updated: Jun 06, 2019

  • The projects implemented have led to the following outcomes:

    Education

    • Since October 2016, a total of 5.1 million students started the year with a new school kit. Through the production and distribution of textbooks, the number of textbooks per child has risen from 1 per 25 children to 1 per 2 children. For the past three years, 12,074 schools have received grants to purchase school equipment, finance maintenance and repair work, and cover their operating costs. Parent associations monitor the use of these grants and receive training to familiarize themselves with the use of service report cards.
    • Since 2015, nearly 600 schools have been distributing meals to 103,368 children. This strategy has proven to be very effective in ensuring that children continue to attend school, particularly in the southern part of the country, which was affected by severe droughts.
    • 266 classrooms have been built by the Madagascar Emergency Support to Education for All Project (PAUET).

    Health and social protection

    • 508,000 pregnant or breastfeeding women and more than 1.7 million children under the age of five have received free health care by means of a voucher and exemption system.
    • Approximately 1.8 million school-age children received preventive treatment against neglected tropical diseases, particularly helminth infections. Teachers have noted a decline in absenteeism since this treatment was established.
    • A total of 286,194 children under 1 year have been vaccinated against diphtheria, tetanus, and polio (DTP3).
    • 65,000 vulnerable households (totaling over 783,000 individuals) in southern Madagascar are beneficiaries of the FIAVOTA project providing cash transfers combined with health and nutrition interventions to stabilize the incomes of households hit by drought, build their resilience, and improve their well-being. Fifteen months of FIAVOTA project implementation have successfully rolled back food poverty for FIAVOTA program beneficiaries: average household income has risen and is 40% higher than the average income of households not on the FIAVOTA program. The cash transfers have also fostered the creation of small family businesses: in 2018, nearly two-thirds of households had at least two small family-run income-generating activities. The FIAVOTA program has made a marked improvement to the human development and women’s empowerment indicators.
    • 32,000 households are receiving cash in return for public utility work.
    • In the nine project intervention areas, 347 health centers providing basic care have been renovated (installation of solar energy refrigerators to preserve vaccines, for example).

    Private sector development

    • Since 2006, 252,500 property titles have been issued.
    • Between 2015 and 2017, six reforms relating to improvement of the investment climate have been adopted and implemented, tangibly reducing barriers to entrepreneurship and business growth. The total number of direct beneficiaries of the Second Integrated Growth Poles and Corridors Project (PIC2) is estimated at nearly 400,000. In the 77 PIC2 intervention communes, there was an increase of 51% in commune-level revenues 2015 and end-2016, and an increase of 85% in the number of newly formalized enterprises in the 77 PIC2 intervention communes.
    • Eight kilometers of urban roads were rehabilitated in the PIC2 intervention urban communes and passenger traffic, including tourists traveling by air and sea, increased by 37% in the main PIC2 tourism centers.

    Agriculture

    • The rate of deforestation fell by 0.13% per year in protected areas between 2005 and 2013—a significantly lower figure than that for unprotected areas, which is 1.71% per year over the same period.
    • 41,700 hectares of irrigated land were rehabilitated between 2013 and 2017. Rice production yield has increased from 2.5 metric tons to close to 5 metric tons per hectare, bringing direct benefits to more than 76,000 agricultural households.

    Last Updated: Jun 06, 2019

  • The development partners are continuing their intensive cooperation with the Malagasy authorities, which are encouraged to ensure sectoral coordination.

    The World Bank is working hand in hand with the French Agency for Development (AFD) and the Global Environment Facility on the project for the integrated management of natural resources (PADAP) to check the degradation of natural resources in Madagascar and improve access to irrigation systems, agricultural inputs, and agricultural and forestry services.

    With the program to combat chronic malnutrition in children in Madagascar using the new multiphase programmatic approach, the World Bank is working in association with USAID, the World Health Organization, and UNICEF, the GAVI Alliance, the Global Fund, the Power of Nutrition, GIZ, and JICA to round out the interventions designed to improve nutritional indicators.

    Furthermore, the African Development Bank and the World Bank are working together to assess and improve the Malagasy public procurement system so that it can be used in projects financed by international aid.

     

    Last Updated: Jun 06, 2019

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LENDING

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
+261-20-22-560-00
For general information and inquiries
Diana Styvanley
Communications Officer
+261320500127
dstyvanley@worldbank.org
For project-related issues and complaints
madagascaralert@worldbank.org