- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Madagascar crisis puts thousands out of work

Madagascar crisis puts thousands out of work

Published date:
Sunday, 21 March 2010
Mail and Guardian (South Africa)

One year after the overthrow of Madagascar's president, the Indian Ocean island is facing stiffer political penalties and economic sanctions that are plunging thousands into poverty.

A deserted garment factory in the capital Antananarivo is one of the recent victims of the forcible power change that prompted the United States to halt a scheme allowing some African countries preferential access to its markets.

Since the US suspended the Africa Growth and Opportunity Act (AGOA) in December, factory manager Richard Hurnungee has been struggling to liquidate the Cosmos plant.

"Our client turned his back on us as well as my general manager and the financial director," Hurnungee said bitterly, referring to the German Adidas label.

Empty boardroom

"I am left alone in Madagascar to do the liquidation," he added, sitting in an empty board room with a pile of files and a laptop computer before him.

In late January, one phone call from the firm's Hong Kong owners halted production of thousands of items of Adidas apparel, and ordered immediate liquidation.

At its peak, Cosmos was producing between 450 000 and 500 000 pieces of Adidas sportswear every month.

Madagascar has been in a political crisis since the March 17 2009 power grab by then Antananarivo mayor Andry Rajoelina with the backing of the army.

Regional blocs African Union and the Southern African Development Community suspended membership for the vast Indian Ocean island, while Washington halted humanitarian aid to the country after the coup.

Travel bans

On Wednesday, the AU went further by slapping travel bans and economic sanctions on Rajoelina and scores of his supporters, who defied an AU directive to implement accords to end the protracted impasse.

This month, Cosmos's 1 750 staff turned up at the shuttered factory to be paid a paltry 45 000 ariary (€15), half their monthly salary, sparking anger among those who had expected more money.

"Our case is in court. The creditors have frozen our assets," Hurnungee said.

Production manager Parvez Jamdaty said: "We have to wait to see if we can sell what we produced or the machines."

About 30 factories under the AGOA scheme have been affected by the suspension and nearly 20 000 workers have been laid off.

"I have no confidence that AGOA can resume in Madagascar," said Jamdaty. The AGOA programme was set to end in 2015.

Alongside Madagascar, Guinea and Niger also saw the US suspend the preferential market access scheme for disregard for democracy.

Up to last year, Madagascar was one of the largest African textile exporters to the United States -- with sales worth $250-million, the sector employed at least 50 000 workers directly.

In November, Madagascar strongman Rajoelina signed a power-sharing agreement with his political rivals to end the turmoil, but later disregarded the deal.

Madagascar is one of the world's poorest nations, where three quarters of the population live on less than two dollars a day.

“ Latest AGOA Trade Data currently available on

Click here to view a sector profile of Madagascar's bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.

Other regularly updated trade statistics on include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.

  • You are here: Home/News/Article/Madagascar crisis puts thousands out of work