Madagascar Regional and Global Trade

By | May 21, 2021

Regional and global trade

The export and import rates, which have been rising continuously since the 1990’s, and the resulting trade balance have improved significantly since 2015. Although the import rate is still higher than the export rate, there is an overall upswing, at least in terms of trade dynamics. If one looks at the trade balance in general since independence in 1962, however, it becomes apparent that the trade balance was positive in the 1970’s / 80’s and then clearly negative from 2005. Germany imports significantly more goods (especially vanilla and clothing) from Madagascar than it exports to the island nation.

According to internetsailors, Madagascar exports goods mainly to France (20%) and the USA (20%) and Germany (7.35 percent). Processed goods are mainly imported from China (22%), France (7.8%) and India (67.7%). Here is China as a trading partner, but also as an investor, and more important. The Economic Complexity Index (ECI) tries to relate the know-how or human capital available in a country to the industrial presentation and to evaluate it globally in rankings. Madagascar comes off relatively poorly at 83rd out of 124 countries, but better than Mozambique, for example.

Madagascar’s range of exports remains poorly diversified: only a few products account for 50% of exports: nickel / cobalt with 12%, cloves with 8.4%, textiles with 5.4% and vanilla with an impressive 26% (2017).

In terms of economic policy, Madagascar would like to become more involved regionally in addition to its international orientation (e.g. with Mayotte, La Réunion or the Seychelles). The Commission de l’Océan India (COI) enables simplifications in economic agreements between the islands of the Indian Ocean. Madagascar is an active member, especially when it comes to agriculture.

Madagascar is characterized by regionally different economic development. While the economic dynamism is great in and around Antananarivo as a metropolis, large parts of the highlands, the west and especially the south are practically cut off from the economic center.

Madagascar Global Trade

Development cooperation with Germany

Relations with Germany focus primarily on cooperation in the areas of environmental and resource protection, renewable energies and agriculture, as well as in projects aimed at adapting to climate change. The GIZ is involved since 1962 with interruptions in Madagascar. After the coup in 2009, Germany stopped development cooperation at government level. In 2014 bilateral cooperation was resumed and in 2016 formal government talks were held for the first time since 2008. Germany promised the partner country funds totaling 59.6 million euros, most of which will be used for environmental protection. In addition, it is hoped that improvements in community-oriented development in Madagascar will be achieved through poverty-oriented local development with the focus on creating decentralization measures. The KfW is involved in Madagascar with various projects. In Madagascar, the Friedrich-Ebert-Stiftung is particularly committed to strengthening democratic action and integrating relevant social groups into the political process. Welthungerhilfe’s focus in Madagascar is on food security and waste avoidance / waste disposal. The promotion of university cooperation and the support of higher education are goals of the DAAD in Madagascar.

One of the declared goals of the former President Rajaonarimampianina was to initiate concrete projects for the generation of solar energy in Madagascar with the support of Germany. The promotion and improvement of electrification measures and renewable energies (Fonds National de l´Energie Durable) for rural areas (in cooperation with the rural electrification authority ADER) was a goal. To what extent President Rajoelina will continue the cooperation in these areas remains to be seen.

Telephone and internet

Less than 1% of Madagascar’s population have a landline connection (132nd place out of 221 countries). The three competitors in the mobile phone business Airtel, Orange Madgascar and Telma have stimulated the market in recent years. The international phone code is 00 261 / + 261. The rate of internet users had risen sharply up to 2017 (4.3%) and is likely to continue to grow in the future. However, it should not be forgotten that the great and apparently increasing poverty of the population also limits access to modern communication.

Internet cafés are actually only available in the larger cities, but here too not all hotels have a connection. The connections were improved by leaps and bounds in 2018. However, access to the Internet in the highlands and in the south is still very limited. For the cell phone, it is best to buy SIM cards from one of the well-known telecommunications companies. Most of the German mobile phone companies have roaming contracts with the Malagasy providers, so that calling can be made easier.