Madagascar: Invertir a Madagascar
FDI inflows to Madagascar had been declining in the past years due to the country’s political crisis, and in the context of a challenging global environment, that trend continued. Policy and institutional reforms and infrastructure projects that were expected to improve the investment climate did not materialize yet (U.S. Department of State). According to UNCTAD's World Investment Report 2023, the country received USD 396 million in FDI inflows in 2022, up from USD 358 million one year earlier. At the end of the same period, the stock of FDI reached USD 9.1 billion, around 59.7% of the country’s GDP. Mauritius, China, the Netherlands, and France are the main investors in the country (IMF). The main investment opportunities concern the mining, infrastructure, textiles, energy, tourism, and agri-business sectors.
The Malagasy government enacted various reforms to improve the business climate, including some related to company creation, granting construction permits, and trans-border trade. However, the special economic zones have not attracted enough sustainable and quality investment. The Plan Emergence Madagascar (PEM) is expected to attract investments related to the construction of new road infrastructure, the development of water supply, and the energy and mining sectors (Coface). There is no law prohibiting or limiting foreign investment in the country, but many obstacles make investment difficult. Madagascar has enormous natural potential, but the poor and costly quality of infrastructure, limited access to credit and financial instruments, as well as the poor definition of property titles, are all obstacles to investment. Political instability and corruption have blocked all public investment and caused the departure of many investors. Although Malagasy law treats foreign and local investors equally, foreign companies are often subject to criminal prosecution for questionable taxes, labour law violations, or other reasons. A new investment law was promulgated on July 27, 2023, which repeals the old law No. 2007-036. Madagascar ranks 107th among the 132 economies on the Global Innovation Index 2023 and 118th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 358 | 358 | 396 |
FDI Stock (million USD) | 8,338 | 8,696 | 9,092 |
Number of Greenfield Investments* | 7 | 2 | 1 |
Value of Greenfield Investments (million USD) | 354 | 131 | 8 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Madagascar | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 7.0 | 5.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 6.0 | 3.5 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 5.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Reasons to invest in Madagascar include the following:
Several factors still hinder Madagascar's FDI attractiveness:
The Economic Development Board Madagascar, Madagascar's one-stop-shop for investment, manages business registration, which on average is completed within one to two weeks of receipt of complete documentation, one of the shortest times in Sub-Saharan Africa.
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Actualitzacions: November 2024