Madagascar (also known as the Malagasy Republic) is an independent island republic with a democratic government which lies in the Indian Ocean and forms part of the Indian Ocean Islands group associated with Africa. The capital city is Antananarivo. Other major towns are Antsirabe and Fianarantsoa and the port of Toamasina (Tamatave).
The official languages are Malagasy and French. The economy of Madagascar is predominantly agricultural. The local currency is the Malagasy franc (FMG). (US$ / FMG – current exchange rate).
The international time zone for Madagascar is GMT +3 and the international dialling code for the country is +261. Apart from Air Madagascar, the national carrier, Air France and Air Mauritius fly to Madagascar. Since the mid 1990s, air transport in Madagascar has been liberalised and several new private airlines now serve both domestic and international routes. Under the World Bank sectoral program, the petroleum industry should be liberalised soon. As at September 1995 all nationals require visas in order to visit the country.
Malaria, tuberculosis, hepatitis A, typhoid fever and schistosomiasis may be contracted while travelling in Madagascar. Travellers should be aware that advance payment for medical services may be required. Prescription medicines should be carried in their original containers together with the prescription.
Industry in Madagascar is limited to textile manufacturing and agricultural products processing. The economy of Madagascar is dominated by agriculture. In 2002 agriculture accounted for 27.4% of GDP totaling US$4.5 billion. Industry made up12.8% and services 59%.
Policies implemented after the late 1980s have followed a more pragmatic approach. Price distortions were eliminated, energy prices increased, commodity subsidies eliminated and the exchange rate was floated. The Malagasy government, under the guidance of the World Bank, has made liberalisation and privatisation its key goals for economic reform.
Bank restructuring and privatisation have resulted in a stronger financial sector. The economy’s response to these reforms has been positive. A 3.6% growth and inflation of 5% were prevalent in 1997. Other areas have not, however, shown much growth, and further structural reforms will be necessary to boost the economy. The extent to which the Malagasy government implements reforms and the amount of foreign investment and financial aid that the country receives will determine whether the country reaches its growth potential.
Since the establishment of a duty free export-processing zone in 1990, there has been an increase in light manufacturing, particularly in the clothing and textile sectors. Foreign direct investment in the export processing zone and growth in nontraditional exports had a positive effect on the country’s economy. FDI in 2001 amounted to US$11.1 million .
The country underwent a political crisis in the first half of 2002 and the economy came to a virtual standstill… some of the progress made previously was reversed. The government has put various measures in place to alleviate the effects of the crisis and these seemed to have been largely effective although the effect of the crisis on agriculture was such that food shortages were reported towards the end of 2002 and in the earlier half of 2003.
Madagascar’s main export commodities include cotton, fruit, herbs and spices, meat, minerals, petroleum products, seafood, sugar, tea and coffee, tobaccos and vanilla, while imports include minerals, pharmaceuticals, plastic products, raw materials, chemical products, cocoa beans and products, construction equipment, consumer goods, fuel and crude oil.
Foreign currency may be imported into Madagascar without restriction (provided that a written declaration is made to customs) and the Floating System is in operation.
Import licences are not required, except for a short list of goods which are subject to administrative control for security or health reasons. Before importing, importers are required to submit their “Fiche Statistique d’Importation” (Import Data File) with the proforma invoice to their bank and a copy must be submitted to the Ministry of Commerce.
Madagascar is a contracting party of the Harmonised Commodity Description and Coding System.