Country Info: Madagascar
Economic Background
After discarding socialist economic policies in the mid-1990s, Madagascar followed a World Bank- and IMF-led policy of privatization and liberalization that has been undermined since the start of the political crisis. This strategy placed the country on a slow and steady growth path from an extremely low level. Agriculture, including fishing and forestry, is a mainstay of the economy, accounting for more than one-fourth of GDP and employing 80% of the population.
Exports of apparel boomed in recent years primarily due to duty-free access to the US, however, Madagascar's failure to comply with the requirements of the African Growth and Opportunity Act (AGOA) led to the termination of the country's duty-free access in January 2010 and a sharp fall in textile production.
Deforestation and erosion, aggravated by the use of firewood as the primary source of fuel, are serious concerns. The current political crisis, which began in early 2009, has dealt additional blows to the economy.
Tourism dropped more than 50% in 2009 compared with the previous year, and many investors are wary of entering the uncertain investment environment. Growth was anemic during 2010 to 2012 although expansion in mining and agricultural sectors is expected to contribute to more growth in 2013.
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Madagascar - National AGOA Strategy
The objective of the AGOA strategy is to support the ability of Madagascar’s firms to successfully sell into the U.S. market, leveraging every opportunity that AGOA provides. AGOA has had a clear impact in stimulating Africa-U.S. trade. All exports, including energy-related products, from AGOA-eligible countries have grown over 300 percent, from $21.5 billion in 2000 to $86.1 billion in 2008. It has created more than 300,000 jobs, many of...
Related News
US apparel buyer linked to sourcing opportunities in Madagascar
On August 26-30, the USAID East African Trade and Investment Hub conducted a buyer mission to Antananarivo, Madagascar for a large publicly listed U.S. apparel company. The U.S buyer engaged with apparel companies in Madagascar and identified several sourcing opportunities that could support its production of apparel and related fashion goods across several top...
Madagascar may be more than a few steps ahead of Ethiopia for sourcing
Madagascar may not be getting the same publicity as Ethiopia when it comes to the topic of sourcing in Africa, but the island nation off the southeast coast of the continent has a lot to offer that few are talking about. One thing that sets the nation apart for sourcing is its history in textile manufacturing. Madagascar had already been a go-to source for making apparel in...
AGOA and Dutch Disease: The case of Madagascar
The suspension of Madagascar’s African Growth and Opportunity Act (AGOA) privileges following its 2009 coup offers a natural experiment that allows analysts to study the impact of a tariff preference program on the recipient developing country, and then, subsequently, the impact of its removal. The situation provides two distinct but comparable states: One with...
Federal Register - Madagascar and Guinea comply with AGOA visa system
The AGOA (Title I of the Trade and Development Act of 2000, Public Law 106-200, as amended provides preferential tariff treatment for imports of certain textile and apparel products of beneficiary sub-Saharan African countries. The textile and apparel trade benefits under AGOA are available to imports of eligible products from countries that the President designates as...
Africa: President Obama removes Swaziland, Reinstates Madagascar for AGOA benefits
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Madagascar's exclusion from AGOA to continue for now
The United States will not restore trade privileges to Madagascar this year, according to a statement received Saturday that cited human rights concerns and the failure to restore democracy in the Indian Ocean nation. Madagascar has been excluded from the Africa Growth and Opportunity Act (AGOA) programme since 2009 when then president Marc Ravalomanana was overthrown in a...