Madagascar, officially the Republic of Madagascar, is a country lying off the southeastern coast of Africa. It is located in the southwestern Indian Ocean and separated from the African coast by the 250-mile-wide Mozambique Channel. It was formerly called the Malagasy Republic.
Although located some 250 miles from the African continent, Madagascar’s population is primarily related not to African people, but rather to those of Indonesia, more than 3,000 miles to the east.
The island’s animal life and vegetation are equally irregular, differing greatly from that of nearby Africa. It is the second largest island country in the world after Indonesia.
In 1958, France, the Island’s colonial masters, agreed to let its overseas territories decide their own fate. In a referendum on September 28, 1958, Madagascar voted for autonomy within the French Community. On March 26, 1960 France agreed to Madagascar becoming fully independent and on June 26, 1960, Madagascar became an independent country with Philibert Tsiranana as its first President.
Most inhabitants of Madagascar speak Malagasy, the national language, which is written in the Latin alphabet. French is also widely spoken and officially recognized. Both languages are used for teaching, especially in the upper grade levels. English is also spoken and its use has increased. Moreover, Comorian is spoken among a sizable community of immigrants from Comoros.
Between 1972 and 1975, Madagascar was under military rule. Socialist political and economic reform was instituted in 1975, and a new constitution was implemented later that year for the renamed Democratic Republic of Madagascar. The public grew increasingly dissatisfied with the political and economic conditions of the country, and by the early 1990s, the demand for change led to a gradual transition to democracy and a free market economy. In 1992, the country adopted a new name, the Republic of Madagascar, along with a new constitution that underwent subsequent revision.
In 2009, following months of political unrest, a transitional regime came to power and a new constitution was passed by referendum in November 2010. The first democratically elected president under the 2010 constitution was inaugurated in January 2014.
Madagascar’s current constitution provides for a unitary republic with a President as the head of state and a Prime Minister as the head of government. The President is elected by popular vote to no more than two five-year terms. The President appoints the prime minister, who is presented by the majority party or coalition in the National Assembly.
The legislative branch is bicameral and consists of the National Assembly and the Senate. The members of the National Assembly are directly elected to five-year terms. The members of the Senate—one-third are presidential appointments, two-thirds are indirectly elected—also have five-year terms.
Presidential elections were held peacefully in January 2019, marking the first political alternation of power in Madagascar. President Andry Rajoelina won majority of the votes and leads the country alongside his Prime Minister, Christian Ntsay and 24 ministers.
Some ministries were merged to improve the efficiency of public administration.
Recent macroeconomic and financial developments
Prior to the COVID-19, Madagascar was on an upward growth trajectory. Following a prolonged period of political instability and economic stagnation, growth accelerated over the last five years to reach an estimated 4.4% in 2019. According to the World Bank, this represented the country’s fastest pace in over a decade.
However, the pandemic has put a brake on Madagascar’s economic growth. After the record GDP growth, the country went into a recession in 2020, with real GDP declining by 4%. Manufacturing, mining, and services were hardest hit because of containment measures, while agriculture performed well.
The crisis also put pressure on the financial sector, prompting the central bank to inject liquidity into the system but prices were contained. However, Inflation was 4.2% in 2020, compared with 5.6% in 2019.
The current account deficit declined to 3.5% of GDP in 2020, compared with 2.3% in 2019. This was because of the drop in exports, an abrupt halt in tourism, and a decline in foreign direct investment.
The pandemic also upset public finance with tax revenues falling whiles spending increased significantly as the government took steps to mitigate the COVID–19 crisis. As a result, the budget deficit depreciated to 6.3% of GDP in 2020 from 1.4% in 2019.
OUTLOOK AND RISKS
The African Development Bank (AfDB) indicated that if the pandemic subsides during the first half of 2021, Madagascar’s outlook is favourable for a return to growth, with real GDP projected to grow 3.5% in 2021 and 4.5% in 2022.
The AfDB also expects that the impact of the crisis will continue to be felt in public finances in 2021. According to the bank, the financing needed for economic recovery was estimated at $820 million in 2021, resulting in a budget deficit of 4.6% of GDP in 2021, which would narrow to 3.8% in 2022.
On the demand side, the recovery should be supported by a rebound in both public and private investment. A resumption of exports of nickel, cobalt, and vanilla is also expected to aid recovery, as the global economy and international trade improve. However, the current account deficit is expected to remain high at 5% of GDP in 2021 and 4.5% in 2022.
Job losses estimated at 27% in the formal sector are also expected to gradually decline in 2021 as the economy recovers. The main risks to the outlook, according to AfDB are a new wave of COVID–19 infections and weather shocks, such as drought, cyclones, and floods.
Madagascar’s debt-to-GDP ratio also declined to 44.8% in 2020 from 38.7% in 2019. In 2020, public debt was mainly external. Madagascar owed foreign creditors an amount equivalent to 32.6% of GDP, while domestic debt was 12.2% of GDP.
Slightly more than three-quarters of the foreign debt was owed to multilateral institutions, 19% was bilateral, and about 5% was commercial. Domestic debt was mostly in treasury bills. AfDB posits that with a low ratio of tax revenues to GDP, Madagascar may need to focus on increased mobilization of public revenues to support the financing of economic recovery and to preserve the long-term sustainability of its debt.
AGRICULTURE, FORESTRY, AND FISHING
Agriculture, including fishing and forestry, is Madagascar's largest industry and employs 82% of its labor force. Madagascar's varied climate, ranging from tropical along the coasts, moderate in the highlands and dry in the south, allows for the cultivation of tropical crops such as rice, cassava, beans and bananas as well as cash crops such as vanilla and coffee.
Sugarcane is grown on plantations in the northwest, around Mahajanga, and on the east coast near Toamasina. Cassava is a staple, grown all over the island, and potatoes and yams are cultivated mainly in the highland region of Ankaratra.
Bananas are produced commercially on the east coast, and corn (maize) is grown mainly on the central plateau, in the south, and in the west. Fruits grown include apples, grapefruits, avocados, plums, grapes, oranges, litchis, pineapples, guavas, papayas, passion fruits, and bananas.
Robusta coffee is grown on the east coast and arabica coffee on the plateau. Other significant crops are beans, peanuts (groundnuts), pois du cap (lima beans), coconuts, pepper, vanilla, cacao, sisal, raffia, tobacco, copra, cotton, and castor beans.
Madagascar’s waters are rich in marine wildlife, including a variety of fish, shellfish, and crustaceans. The country’s industrialized fisheries sector has experienced great expansion, and the export of shrimp and prawns, in particular, provides a significant source of revenue. Overfishing threatens the sector, although fish farming— especially along the western coast— has been increasingly developed as an alternative. There is considerable raising of fish in the irrigated rice fields, mainly for home consumption.
Vanilla is by far the most expensive spice in the world. The Sava Region in north-eastern Madagascar delivers about 80% of world's vanilla.
For a generation, the price languished below $50 a kilo (about 2.2 pounds). But in 2015, it began to rise at an extraordinary rate and for the past years has hovered at 10 times that amount, between $400 and $600 per kilogram— approximately the price of silver
Agriculture is Madagascar’s largest sector thanks in large part to vanilla. Approximately, 10% of Madagascar’s GDP is said to come from the vanilla industry.
Manufacturing is an area of success in Madagascar, greatly inspired by the formation of the export processing zone (EPZ) in 1996, which offers tax exemptions for export-focused industries.
The project has grown to include 150 companies and has generated 80,000 jobs, producing 37.4 percent of Madagascar's foreign trade revenue. Its main products are clothing (48 percent), handicrafts (13 percent), and agro-processing (9 percent).
Textiles are another important export, supported by Madagascar's cotton industry and low wage rates. It also accounts for 15 percent of manufacturing production. Other products include plastics, pharmaceuticals, leather goods, footwear, tobacco, paper pulp, fertilizer, oils, soap, sugar, beer, cement, and foods and beverages.
Industrial centres are located mainly in and around Antananarivo, Antsirabe, and Toamasina.
Madagascar holds an extensive deposit of minerals. Industrial mining activities in Madagascar include the production of chromium, cobalt, ilmenite, and nickel.
Ambatovy, located in Madagascar, off the east coast of Africa, is one of the world’s largest lateritic nickel mines with a production capacity of 60,000 tonnes (132.2 million pounds) of nickel and 5,300 tonnes (12.3 million pounds) of cobalt per year. Valued at US$8 billion, Ambatovy Project is the single largest capital project in the history of Madagascar.
The Ambatovy Project makes a significant contribution to job creation in Madagascar. Since operations began on the site, it has created more than 18,000 jobs at the peak of the construction phase. It currently employs 3,273 people (2,852 men, 421 women) for operations at the mine site and processing plant. Additionally, it employs 5,000 subcontractors in the procurement of 40% of its purchases. 90% of the current Ambatovy employees are Malagasy nationals.
Ambatovy also accounts for approximately 32% of Madagascar’s foreign exchange earnings, a substantial contribution to the economy.
Additionally, artisanal and small-scale mining operations concentrating mainly on gold, precious and semi-precious stones employ over 500,000 people across the country
The country is considered to be a new frontier for oil and gas prospecting, but oil exploration remains limited, both on and off-shore.
Madagascar is one of the world's most biologically diverse areas, and it’s internationally renowned as a wildlife tourism and ecotourism destination, focusing on lemurs, birds, and orchids. The indri is the largest of the lemur species and very popular amongst tourists, who travel to observe them at the Analamazoatra Reserve, four hours away from the capital, Antananarivo. The presence of the indri has helped to make the Analamazoatra Reserve one of Madagascar's most popular tourist attractions.
Also, historical sites can be found throughout the country. The Royal Palace and the sacred hill of Ambohimanga, both located around Antananarivo are very popular tourist sites and amongst the Unesco world heritage listed sites.
However, despite a high potential for tourism, experts say Madagascar’s tourism sector is underdeveloped. Last year, the island’s government set a goal of attracting 500,000 foreign tourists annually, with the aim of using tourism as a driver of employment, private sector growth, and foreign exchange earnings.
The Rajoelina administration intends to leverage Madagascar’s renowned biodiversity to entice foreign and domestic travel and investment across the country, through partnerships with leading hotel chains, tour operators, cruise ships, and the likes.
The banking sector in Madagascar includes eleven commercial banks, of which nine are subsidiaries of foreign banks. The sector is highly concentrated with the four main banks holding 86 percent of loans.
As of December 2019, the assets of all eleven banks totaled MGA 12,198 billion (approximately $3.37 billion) or 24 percent of GDP. Private sector loans amounted to MGA 6,677 billion ($1.8 billion), or 54.7 percent of total assets and 13 percent of GDP.
The official currency is the ariary, which replaced the Malagasy franc in 2003. Prior to that, the Malagasy franc had replaced the CFA (Communauté Financière Africaine) franc in 1963. The Central Bank issues all currency.
The climate is governed by the combined effects of the moisture-bearing southeast trade and northwest monsoon winds as they blow across the central plateau. The trade winds, which blow throughout the year, are strongest from May to October.
The hot, wet season extends from November to April and the cooler, drier season from May to October. The monsoon, bringing rain to the northwest coast of Madagascar and the plateau, is most noticeable during the hot, humid season.
July is normally the coolest month on the Island whiles December is the hottest.
PLANT AND ANIMAL LIFE
About seven-eighths of the island is covered with prairie grasses and bamboo or small thin trees. There also are screw pines, palms, and reeds on the coasts.
Because of the island’s isolation, many zoologically primitive primates have survived and evolved into unique forms. About 40 species of lemurs are indigenous to Madagascar. Several unique hedgehoglike insectivores, such as the tenrec, have evolved there, and there are also many kinds of chameleons of varying size. Birds are numerous and they include guinea fowl, partridges, pigeons, herons, ibis, flamingos, egrets, cuckoos, Asian robins, and several kinds of birds of prey. There are about 800 species of butterflies, many moths, and a variety of spiders.
The only large or dangerous animals are the crocodiles, which occupy the rivers. Snakes on the Island, including the do, which is 10 to 13 feet in length, are harmless.
The coelacanth, referred to as a living fossil and once thought extinct for millions of years, inhabits offshore waters.
ART & CULTURE
Most traditional Malagasy music revolves around favourite dance rhythms; the salegy of the Sakalava tribe, with both Indonesian and Kenyan influences; watsa watsa from Mozambique and the Congo; the tsapika, originating in the south; and the sigaoma, similar to South African music.
The most widely played traditional wind instrument is the kiloloka, a whistle-like length of bamboo capable of only one note.
Textiles have always played a huge part in Malagasy society, with some types of cloth even being imbued with supernatural powers, according to locals. The Merina use cocoons collected from wild silkworms to make highly valued textiles called lamba mena (red silk). The silks are woven in many colors and pattern combinations and used in burial and reburial ceremonies.
The earliest Malagasy literature dates from historical records was produced in the mid-19th century. Modern poetry and literature began to flourish in the 1930s and 1940s. The best-known figure was the poet Jean-Joseph Rabearivelo, who committed suicide in 1947 at the age of 36, reputedly after the colonial administration decided to send a group of basket weavers to France to represent the colony instead of him.
Modern-day literary figures include Michèle Rakotoson, Johary Ravaloson, David Jaomanoro, Elie Rajaonarison, Jean-Luc Raharimanana and Naivoharisoa Patrick Ramamonjisoa, who goes by the pen name of Naivo. Most of their works are published in French.
The three most popular sports on the Island are moraingy, a traditional martial art with similarities to Thai boxing, Petanque, in which the Malagasy have twice been world champions (1999 and 2016), and rugby union, in which they have twice reached the final of the Africa Cup.
However, Football is becoming widely popular on the Island especially after the national soccer team, Les Barea, managed to qualify and reach the quarter-finals of the 2019 African Cup of Nations (AFCON).