Country Information - Madagascar

ECONOMIC BACKGROUND Note: Madagascar was suspended from AGOA at the end of 2009 Madagascar faces problems of chronic malnutrition, underfunded health and education facilities, a roughly 3% annual population growth rate, and severe loss of forest cover, accompanied by erosion. Agriculture, including fishing and forestry, is the mainstay of the economy, accounting for one-third of GDP and contributing more than 70% to export earnings. Industry features textile manufacturing and the processing of agricultural products. Growth in output in 1992-97 averaged less than the growth rate of the population. Growth has been held back by antigovernment strikes and demonstrations, a decline in world coffee prices, and the erratic commitment of the government to economic reform. The extent of government reforms, outside financial aid, and foreign investment will be key determinants of future growth. (Source: World Factbook, 2002) Click here for Country Map [23kB]

BI-LATERAL TRADE OVERVIEW Note: Madagascar was suspended from AGOA at the end of 2009 Trade between Madagascar and the United States has grown very rapidly over the past few years, although this is largely due to the substantial expansion of Madagascar's exports. Since 1999, the country's exports to the U.S. have grown almost 3-fold, while imports from the U.S. continue to remain low. This has resulted in a 2002 recorded trade surplus of $ 200 million (2001: $ 250 million) in favour of Madagascar. US imports from Madagascar are of a highly concentrated nature, and consist predominantly of 'textiles and apparel' and 'agricultural products'. Other categories play only a relatively minor role. Madagascar qualified for the AGOA 'Wearing Apparel' provisions on March 6, 2001, making it one of the first Sub-Saharan African (SSA) countries to do so. In addition, it is deemed to be a 'Lesser Developed Country', making it eligible - until September 30, 2004 at least - to utilise third country textile inputs in the production of AGOA-eligible garments. The importance of 'textile and garment' exports to Madagascar cannot be overemphasised, although 2002 saw a major decline in its exports to the US. Counting in Madagascar's favour is the fact that it is attracting significant new investment in these sectors from neighbouring countries such as Mauritius, also due to the fact that wage rates in Madagascar are more competitive. In 2002, approximately 84% (2001: 90%) of Madagascar's 'textile and apparel' exports are currently AGOA-eligible, while almost 40% of the country's total exports to the U.S. are AGOA compliant (see link to Country Trade Profile below). Click here for Detailed Trade Profile