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 25.6 million inhabitants. Despite having considerable natural resources, Madagascar has among the highest poverty rates in the world.
- The presidential elections were held peacefully in January 2019 and marked 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 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 objectives aimed at stimulating the economy and reducing poverty. The 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 to elect 1,695 mayors are slated for November 27, 2019.
- The economy remains dynamic, but showed signs of weakness in 2019. After having achieved growth of 5.1% in 2018, driven by the export, transportation, finance, and construction sectors, economic activity slowed in the first half of 2019 under the combined impact of weakening external demand and a slowdown in public expenditure when the new government took office. Nevertheless, growth is projected to reach approximately 4.7% in 2019, which should result in a 2% increase in per capita income this year, far surpassing the Sub-Saharan average of 0.3%.
- Ambitious public investment plans and a resurgence of confidence following the elections are projected to trigger robust growth of up to 5.3% in 2020, before it stabilizes at around 5% in 2021. However, these investments are also expected to result in considerable widening of the budget deficit, while the proliferation of public-private partnership (PPP) projects within a sometimes opaque legal and institutional framework could generate significant contingent liabilities.
- These trends highlight the importance of strengthening the PPP institutional framework and of creating the fiscal space needed to support priority government expenditure. This requires an increased focus on mobilizing tax and quasi-tax- revenue, which remains among the weakest in Sub-Saharan Africa.
Social Context and Development Challenges
- Despite the economy’s sustained growth in recent years, poverty appears to have only slightly decreased, from 77.6% in 2012 (last official statistic) to an estimated 74.1% in 2019, which far exceeds the regional average of 41%. The agricultural sector, the country’s leading employer, plays a key role in making progress with poverty in Madagascar. However, agricultural output growth has been too low and volatile in recent years, generally trending at less than demographic growth.
- Madagascar is among the poorest countries in the world with 75% of the population living on less than $1.90 per day (in purchasing power parity). 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 3 cyclones per year.
Last Updated: Oct 29, 2019