From: OVERSEAS BUSINESS REPORTS (MADAGASCAR)
University of Missouri-St. Louis
ch 1 DB Rec# - 20,744 Dataset-MARKET
Source : USDOC, International Trade Administration
Source key :IT
Program key :IT MARKET
Program :Market Research Reports
Update sched. :Monthly
ID number :IT MARKET 111099817
Title :MADAGASCAR - OVERSEAS BUSINESS REPORT - OBR9312
Data type :TEXT
End year :1993
Date of record:08/17/1993
Keywords 1 :
| AFRICA, NEAR EAST AND SOUTH ASIA
| SUB SAHARA AFRICAN COUNTRIES
| SUB SAHARA AFRICAN GROUP
| SUB-SAHARAN AFRICA
MADAGASCAR - OVERSEAS BUSINESS REPORT - OBR9312
This article is derived from a report dated December 1993, prepared at the
U.S. Department of Commerce - Washington, DC. The article consists of 39
pages and discusses the economic and commercial climate in Madagascar, with
emphasis on information useful for potential U.S. sellers and investors. It
includes the following sections:
HOST GOVERNMENT POLICY
MALAGASY GOVERNMENT FINANCES
INTELLECTUAL PROPERTY PROTECTION
TRANSPORTATION AND UTILITIES
BANKING AND CREDIT
SELLING IN MADAGASCAR
GUIDANCE FOR BUSINESS VISITORS TO MADAGASCAR
TABLE OF CONTENTS
HOST GOVERNMENT POLICY
MALAGASY GOVERNMENT FINANCES
Export Crops--Livestock--Fisheries--Subsistence Crops--
Textile Industry--Sugar Industry--Cement Industry
Major Projects--Foreign Aid
Trade Policies--Technical Standards--Documentation--Modes
of Shipment--Duty Exemptions--Import Duties on Petroleum
Products--Exemptions from Import Tax--Exemptions from
Consumption Tax--Import Taxes--Import Licenses--Export
Duties--Preshipment Inspection--Other Import Requirements
Approval of Investments--Bilateral Agreements--U.S.
Investment--OPIC Programs--Rules Covering Investment
INTELLECTUAL PROPERTY PROTECTION
International Patent Cooperation Union--International
Union for the Protection of Industrial Property
Company Tax--Tax Incentives--Individual Income Tax--Other
Taxes--Taxes on Goods and Services
TRANSPORTATION AND UTILITIES
Air--Sea and Port Facilities--Rail--Road
BANKING AND CREDIT
SELLING IN MADAGASCAR
Industrial Markets--Commercial Markets
Newspapers--Magazines--Radio and Television--Billboards--
Market Research--Trade Organizations
GUIDANCE FOR BUSINESS VISITORS TO MADAGASCAR
Overseas Business Reports: $14.00 a year ($3.50 additional for foreign
mailing); single copy price varies. Order from any Department of Commerce
district office or from the Superintendant of Documents, U.S. Governemnt
Printing Office, Washington, D.C. 20402. Single copies are also available
from the Publications Sales Branch, Room 1617, U.S. Department of Commerce,
Washington, D.C. 20230.
Madagascar was the 26th largest market in Sub-Saharan Africa for U.S.
exports in 1987. Major U.S. exports to Madagascar, as in past years, will
be rice, heavy construction equipment, other agricultural products, and
industrial equipment. U.S. Malagasy trade is profiled in Tables 1 and 2.
In 1986, U.S. products achieved a market share of 6.3 percent.
HOST GOVERNMENT POLICY
Madagascar functions as a modified socialist state, with a majority of its
industrial enterprises owned and operated by the government. There are
about 150 public enterprises. Most of these are concen- trated in the
agro-industrial and financial sectors. Virtually all large industrial
enterprises are government owned, as well as the traditionally state-owned
operations of transportation and public utilities, but private investment is
encouraged. Moreover, a legal framework has been created for the formation
of joint ventures between existing public enterprises and domestic or
foreign private companies. The government's political orientation
internationally is with the nonaligned movement.
U.S. GOVERNMENT POLICY
Imports into the United States from Madagascar enjoy most favored- nation
Madagascar is a designated beneficiary country under the U.S. Generalized
System of Preferences (GSP), whereby a wide range of manufactured and
semimanufactured goods from developing countries may enter the United States
duty free. Ninety four percent of Madagascar's GSP-eligible shipments to
the United States entered duty free under the GSP program in 1986.
MADAGASCAR GOVERNMENT FINANCES
Total revenue and grants amounted to $414 million in 1986 or 15.2 percent of
GDP, while total expenditures amounted to $520 million or 19.1 percent of
GDP. Of total revenue, 24 percent is derived from extrabudgetary sources
and grants while 31.4 percent of total expenditures is devoted to
extrabudgetary and on-lending activities.
Export duties have become the principal source of government revenue since
1983; they alone provide 30 percent of total revenues. Taxes on goods and
services represent the second largest category, accounting for 26 percent of
total revenue. Import duties are the third largest source, accounting for 26
percent of total revenue, while income taxes (including corporate)
constitute the fourth largest tax, accounting for 16 percent of total
U.S. EXPORTS TO MADAGASCAR
Directions of Madagascar's Exports
(Millions of U.S. $)
Country 1985 % 1986 % 1987 %
France 99.94 36.4 104.22 33.3 112.69 29.5
United States 38.09 13.9 48.20 15.4 66.45 17.4
Japan 28.64 10.4 35.00 11.2 46.27 12.1
W. Germany 19.39 7.1 21.33 6.8 29.57 7.7
Austria 17.05 4.5
Italy 15.10 5.5 13.48 4.3 17.26 4.5
Spain 2.56 .1 7.53 2.4 12.69 3.3
U.K. 6.24 2.3 5.95 1.9 10.44 2.7
Total 274.23 313.04 382.53
Source: 1988 Directions of Trade Yearbook, pp 265-266
U.S. IMPORTS FROM MADAGASCAR
Directions of Madagascar's Imports
(Millions of U.S. $)
Country 1985 % 1986 % 1987 %
France 130.74 32.6 135.57 30.55 143.90 30.55
USSR 36.17 9.03 37.97 8.56 41.77 8.87
W. Germany 24.68 6.2 25.09 5.65 29.13 6.18
U.S. 22.47 5.61 27.61 6.22 20.35 4.32
23.08 5.76 16.16 3.64 18.58 3.94
Japan 9.75 2.43 24.62 5.50 16.10 3.42
Austria 13.10 2.78
Saudi Arabia 15.72 3.92 11.00 2.48 12.66 2.69
Total 400.54 443.79 470.98
Source: 1988 Directions of Trade Yearbook, pp 265-266
On the expenditure side, of total outlays of $520 million for 1986, $326
million, or 63 percent, went to current expenditures, while $173 million, or
33 percent, was devoted to capital expenditures of which the foreign
financed component is substantial (79 percent). The current expenditures
represented a decline of $10 million compared with the budget level, a
decline attributable to the delays encountered in mobilizing foreign
resources and partly to delays in implementing various domestic financed
Of current expenditures, current budgetary outlays account for 94 percent of
the total. By economic classification, personnel costs comprise the largest
category, accounting for about 57 percent. Expenditures on goods and
services share second place with expenditures on interest on government debt
at 16 percent, while other current transfers and subsidies, a portion of
which is devoted to parastatal support, stand at 12 percent.
By functional classification, general public services, which embrace all
current budgetary expenditures other than those mentioned below (including
military and security), constitute the largest current budget category,
representing 36 percent at $109.4 million.
Education outlays form the second largest category of the budget at 24
percent, while economic (infrastructural) services at 7.9 percent are the
third largest beneficiary of current budgetary appropriations
with major emphasis on agriculture and road maintenance. Outlays for
health are fourth at 7.7 percent, followed by social and community services
at 1.2 percent.
Fiscal performance improved significantly during 1981-86. The overall
fiscal deficit, which peaked at 18.4 percent of GDP in 1980, stood at 3.4
percent in 1986. The deficit reductions occurred through a lowering of
government expenditures rather than through increases in revenue. As a
consequence, the percentage of GDP represented by the budget fell from 30.1
to 19.1 percent. More than half of the accumulated deficit was financed
through external loans.
Madagascar is the fourth largest island in the world, with an area of
226,641 square miles. It lies 250 miles off the southeast coast of Africa,
separated by the Mozambique Channel from Mozambique and Tanzania. Its
population was estimated to be 10.3 million in 1986 and growing at an annual
rate of 2.8 percent. Antananarivo, its capital, lies on a central plateau,
and its population, estimated at approximately one million, is experiencing
rapid growth. Madagascar has a mixed resource base with good potential for
agriculture and is endowed with numerous minerals. The climate is varied
and subject to recurrent cyclones, particularly on the east cost. The size
and rugged topography have contributed to persistent transportation problems.
The Malagasy economy's growth rate slowed in 1986 to 0.7 percent, after a
strong growth of 2.4 percent in 1985. Industrial production in 1986 may
have fallen by about 2 percent from 1985. Much of the 1986 slowdown could
be attributed to the shutdown of the oil refinery in March following the
damage inflicted by a cyclone. The refinery is expected to be closed for
about 1 year. A second factor was the delay encountered in mobilizing
external financial assistance, much of which could only be arranged after
both the stand-by arrangement of the International Monetary Fund (IMF) and
the Paris Club rescheluling had been agreed to. In the agricultural sector,
where nearly half of production is accounted for by paddy rice, 2 percent
growth occurred despite the negative impact of a cyclone. The service
sector grew by 1 percent. Growth in 1985 was centered in the industrial
sector, owing to the full functioning of the oil refinery, which was
previously closed following an industrial accident. Agricultural production
was sluggish in 1985, owing partly to a severe drought. Lower inflation and
interest rates had a positive impact on savings, which were maintained at
the level reached in 1984, while gross fixed investment increased slightly
to above 14 percent of GDP.
Agriculture employs over 90 percent of the Malagasy work force. Numerous
smallholders dominate production of domestic food crops (rice) and export
crops (coffee, vanilla, and cloves), while state-owned and operated
enterprises play an important role in distribution and marketing. The
domestic marketing of the main export crops is open to the private sector,
but exporting, except for vanilla, is limited to the state trading companies.
The volume of agricultural production has increased only slightly since the
late 1970s, partly on account of extensive government intervention in this
sector. The prices of the seven major agricultural crops are
administratively controlled. Producer prices of vanilla, cloves, and
sugarcane are fixed, while floor prices are set for paddy rice, coffee,
wheat, and soybeans. Real producer prices have only partly recovered since
Coffee--The most important export crop is coffee. Total production of green
coffee beans in 1985 was 78,500 tons, of which 46,600 tons were marketed.
Coffee exports accounted for nearly 40 percent of Madagascar's foreign
exchange earnings in 1985 at $119 million. In order to encourage producers
to invest in their coffee stands, the producer price was increased sharply
in 1985 (20 percent) and again in 1986 (52 percent).
Domestic production dropped substantially in 1985, owing mainly to a severe
drought and was expected to recover only slightly in 1986. The cyclone that
hit Madagascar in March 1986 is estimated to have destroyed about 3,500 tons
of coffee. Several projects are under way in the coffee sector to improve
access to the growing areas by rehabilitating feeder roads and improving
Vanilla--The second most important export crop is vanilla, which is
cultivated mainly by smallholders concentrated on the northeast cost.
Madagascar is the world's leading producer of natural vanilla (7,000 tons in
1985), accounting for 75 percent of the world crop. International trade in
vanilla is determined by agreements between the producers (mainly Madagascar
and the Comoros) and the principal importers in which export prices and
traded volumes are fixed. The government does not wish to encourage
production too strongly because the international market is very sensitive,
partly because of the competition from synthetic vanilla (vanillin).
Production dropped by over 50 percent in 1986, as adverse weather conditions
affected the geographically concentrated vanilla-growing areas.
Cloves--The third main export crop is cloves, which are grown mostly by
smallholders. Production follows a 4-year cycle with 2 to 3 years of high
production followed by 1 year of low output. Government policy limits
increases in the production of cloves because of unfavorable world market
prospects. After reaching a cyclical high of 18,000 tons in 1984,
production declined in 1985 to 13,500 tons. Output in 1986 was sharply
affected by a cyclone which was estimated to have destroyed about 35 percent
of the clove trees of Madagascar. Rehabilitation is being undertaken, but
replanting is expected to take several years.
Other Agricultural Crops--Exported in large quantities are sisal, pepper,
butter beans, and cocoa. Sisal is produced on large estates in the south of
Madagascar. Production has been stable over the past few years. Pepper
production has remained stagnant since 1981. Butter beans have been
experiencing problems in seed research; and while marketed production
doubled between 1981 and 1984, it declined in 1985 and stagnated in 1986.
The government is attempting to raise production to the levels of the 1960s
when butter beans were a major export crop. Cocoa is grown by smallholders
as well as on large estates, mostly in the northern part of the country.
Production has increased since 1981, but poor maintenance and lack of
agricultural extension have contributed to a decline in output since 1984.
Cattle raising is the most important livestock activity in Madagascar.
Cattle occupy an important place in the Malagasy culture, and domestic beef
consumption is relatively high compared with other African countries. The
number of cattle has remained steady at about 10 million head because of a
high young animal mortality rate resulting from traditional
livestock-raising techniques. Madagascar has vast natural pastures (60
percent of total land area) and is free of cattle diseases; there is, there-
fore, considerable potential for increasing production.
Madagascar has substantial, but underexploited, freshwater and deep-sea
fishing resources. The potential for offshore fishing is estimated at
150,000 tons a year, and there are highly valuable crustaceans, with a
potential catch of 8,000 tons a year. Traditional fishing is carried out by
some 6,000 fishermen who supply narrow domestic markets. Commercial
maritime fishing is carried out by four joint-venture companies that operate
along the northwest coast and account for most exports. The government is
undertaking substantial investment in deep-sea fishing, especially of shrimp
and tuna. In 1985, 11 new boats were equipped by the four main companies,
and in 1986, four boats were to be added to the fleet.
Rice--Rice is the staple food, and paddy rice is the country's most
important food crop. It is grown by about 70 percent of the population on 3
million acres, about 50 percent of the total area under cultivation.
Smallholders dominate production, and it is estimated that 80 percent of
production is consumed on the farms. Paddy production in 1986 was estimated
at 2.23 million tons, an increase of 2.4 percent over 1985. Prices paid to
rice producers were substantially higher than in 1985, far above the floor
Cotton--The state cotton development agency, HASYMA, has a monopsony on seed
cotton. Cotton output rose by 24 percent in 1984, a further 32 percent in
1985, but stagnated in 1986 due to insect damage. The 1986 crop totaled
Sugarcane--The two sugar parastatals, Sirama and SNCBE, operate four
estates. Smallholders in the vicinity of the estates sell their cane
to the parastatals. While supplying 20 percent of the delivered cane, the
smallholder plots have been the major source of growth in recent years. In
1985, marketed output of sugarcane increased by 6.5 percent; in 1986, it
increased further by over 20 percent, partly in response to an increase in
the producer price. Production was estimated at 1.95 million tons for 1986,
with 1.38 million tons milled and marketed.
Despite a wide variety of large potentially commercial mineral deposits
known to exist on the island, only three commodities are presently being
mined: chromite, graphite, and mica. Madagascar ranks 10th in world
production of both chromite and graphite. While Madagascar is not a major
mineral producer either in an African or world context, the island is the
sole producer of phlogopite mica and the world's largest producer of
high-grade crystalline flake graphite.
A number of projects are under way to develop Madagascar's potential in
other areas of mineral exploitation. The U.S. Government's Trade and
Development Program (TDP) is funding prefeasibility studies for a
ferrochrome plant at Moramanga and a chromite project of Undriamena
conducted by the Mining and Metals Division of Fluor Daniel of Redwood City,
An ilmenite development program is being undertaken by Madagascar-Minerals,
a joint-venture corporation between the government's oil and mineral agency,
OMNIS, and Quebec Iron and Titanium. Exploration results on this
southeastern coast project have been attended with such success that the
extraction on ilmenite is expected to be available for commercial export by
1990. With indications that Madagascar's deposits could contain as much as
50 percent of the non-communist world's supply, the World Bank is seriously
considering a $35 million loan to begin operations with OMNIS and is seeking
cofinanciers for the production of titanuim dioxide.
Additionally, the European Community has voted funds totaling $2.1 million
to conduct studies of the iron ore mining potential at Soalala. Italsider,
an Italian firm, has conducted $4 million worth of preliminary studies on a
deposit it hopes will ultimately produce 2 to 3 million ton levels of high
grade ore from reserves estimated to contain between 170 to 350 million tons.
Led by food processing, overall industrial production increased by 50
percent in 1985, owing particularly to the renewed functioning of the oil
refinery. The cyclone that hit Madagascar in March 1986 did substantial
damage to the oil refinery which is expected to be inoperable for about a
The textile industry is Madagascar's most important manufacturing activity.
It employs the largest share of employees in the manufac- turing sector,
40.5 percent. Exports (4,700 tons) of cotton cloth valued at $12.4 million
account for 48.7 percent of manufactured exports. The industry is dominated
by two large enterprises; the government is the majority shareholder in
both. The two are COTONA (La Contonniere d'Antscrabe) and SOTEMA (Societe
Textile de Majunga). Each is managed by foreign private companies under
management contracts. The textile industry is largely based on domestic
cotton production, but foreign exchange needs are high, especially for spare
parts and equipment. Competition from imported textiles and difficulties in
remaining competitive in export markets have led to major rehabilitation
The sugar industry is the most important food processing activity.
Accounting for 60 percent of the value of food processing output, refined
sugar production increased by 27 percent in 1985 from its low level in 1984
and is estimated to have further increased by 17 percent to 109,000 tons in
1986. SIRAMA (Societe Siramany Malagasy) in Antananarivo and SNCBE, the two
state-owned sugar companies, were the object of extensive rehabilitation in
1985. Though most of the sugar production is destined for the domestic
market, Madagascar has a 1988 export quota to the united States of 5,700
short tons and to the European Community of 10,572.8 metric tons.
Production of cement at the Compagnie des Ciments Malgaches in Mahajanga has
stagnated at around 36,000 tons since 1981, and the plant is reportedly
nearing the end of its economically useful life. A second cement plant was
established at Antsirabe with a production capacity of 120,000 tons per
year. Due to begin full production in 1986, technical problems surfaced,
and the plant did not operate at more than 30 percent of capacity during the
In 1986, the balance-of-payments position strengthened. The trade deficit
narrowed by approximately one-half to $30.5 million, owing to a modest
recovery of exports -- which are expected to increase by 4.3 percent. The
terms of trade remained virtually unchanged, as an estimated decline in
export prices by about 4 percent was offset by a drop in import prices of
about the same magnitude. The reduction in the trade deficit is estimated to
have been accompanied by a small increase in net service payments and a
decrease in private unrequited transfers. As a result, the current account
deficit is estimated to have declined to a level close to that of 1984. In
relation to GDP, the current account deficit is estimated at 10.4 percent,
compared with 11 percent in 1985. Mainly because of a sharp increase in
public transfers and higher drawings on loans, net capital inflows are
estimated to have exceeded the deficit on the current account. The
resulting overall balance-of-payments surplus of $34 million, combined with
net borrowing from multilateral lending institutions, is expected to allow
Madagascar to reduce external payment arrears by a futher $9.4 million and
to increase other net international reserves by an estimated $28.6 million.
In 1986, Madagascar's world imports were valued at $441.54 million with a
U.S. market share of 6.3 percent. In that year Madagascar imported $58.5
million from the United States. The value of oil imports fell by 44 percent
to 13 percent of the total import bill, compared with 23 percent during
1981-85, reflecting mainly a 28 percent decline in prices for petroleum
products. Imports of raw materials and spare parts are expected to continue
their upward trend, increasing by almost one-fourth to $157 million, or 36
percent of the import bill, while imports of equipment/goods are to increase
only marginally. However, an important turnaround is estimated to have
taken place in rice imports. In contrast to the declining trend of the
preceding 3 years, rice imports are to increase in terms of volume by over
60 percent, to 171,600 tons, partly owing to the building of stocks,
especially the intervention stocks in the context of the World Bank rice
management program. Because of a lower average unit price of rice, the
increase in value would be only 14 percent, reaching $40.1 million. Imports
of nonfood consumer goods are to decline by about 18 percent to $49.3
million. In l987, U.S. shipments to Madagascar declined to $18.3 million,
based on U.S. Census figures.
Madagascar's exports continued to stagnate in 1985-86. As in previous
years, exports were dominated by the three traditional crops, coffee,
vanilla, and cloves, which together accounted for over two-thirds of total
exports. In the case of coffee, export volume has fluctuated downward,
reflecting in large part a sharp decline in the real producer price and poor
transport infrastructure, while vanilla and cloves have been affected
adversely by marketing constraints. Other principal exports are shellfish,
cotton cloth, sugar, pepper, essence of cloves, petroleum products,
graphite, and chromite. Export growth has been impeded by excessive
administrative controls, lack of imported inputs, and, in some cases, an
erosion of competitiveness on the world market. Since mid-1986, a number of
important measures have been taken with a view toward improving Madagascar's
export performance. These consisted of (1) a substantial increase in the
producer price of coffee; (2) simplification of export regulations; (3) a
liberalization of the import regime for spare parts, raw materials, and
nonfood consumer goods; and (4) the continuation of a flexible exchange rate
policy. In 1986, exports were expected to have recovered moderately, with
receipts rising by $13.7 million, to $350.7 million. Export volume was
estimated to have declined by about 3.5 percent. A substantial recovery of
receipts from coffee exports by $25.6 million is envisaged because of a 12
percent increase in volume to 50,000 tons. Despite the suspension of
International Coffee Organization's (ICO's) coffee quotas in February 1986,
Madagascar's coffee exports are constrained by available supplies and the
country's infrastructure facilities. The increase in stocks at the end of
1985 provided substantial supplies of coffee for export in 1986. The volume
of coffee exports amounted to 36,800 tons during the first 9 months of 1986,
an increase of about 5 percent compared with the same period in 1985, and
the average unit price is estimated to have increased by about 8 percent.
The second most important gain is to come from exports of shellfish, which
are expected to increase by 32 percent to a record level of $33.8 million.
Small additional gains are expected to come from exports of graphite and
chromite, which continue to benefit from the rehabilitation of mining
equipment and relatively strong world demand, as well as from exports of
cocoa and sisal, in both cases due entirely to higher shipments, as prices
These favorable developments are likely to be partially offset by a decline
in receipts, totaling about $23.5 million, from a number of exports, notably
cloves, vanilla, cotton cloth, and sugar. In the case of cloves, receipts
are expected to fall by $5.5 million, owing to a 3 percent reduction in
volume, mainly because of damage caused by cyclone Honora and an 11 percent
reduction in the average unit price. Madagascar was forced to offer
substantial discounts (a 27 percent reduction in average unit prices) in
order to liquidate accumulated stocks.
Exports of cotton cloth suffered from a decline in volume, which is expected
to fall by 35 percent, reflecting mainly an erosion of competitiveness due
to a sharp increase in wages; export earnings from cotton cloth are likely
to be $4.7 million below the level of 1985.
The decline in receipts from sugar exports was entirely due to lower volume,
which was limited to shipments in respect to Madagascar's regular quota of
10,600 tons to the European Community, while its 1985-86 quota to the United
States was filled in 1985. Reduced receipts are also expected from exports
of petroleum products, cloves, and peppers, while meat exports virtually
stopped. The United States remained a significant purchaser of the island's
products. It imported $68.4 million in 1986 and $73.1 million in 1987. The
leading products were vanilla and cloves.
In 1986, a 5-year development plan calling for total funding of $1.96
billion was inaugurated which set investment priorities through 1990.
Within the plan, the emphasis was on agriculture, which was projected
to receive just under 40 percent of public investment. Approximately
60 percent of expenditure in the agricultural sector was to be for
rehabilitation to increase paddy rice production, with the objective of
attaining rice self-sufficiency by 1990. Production of export crops,
particularly coffee, was to be encouraged, and industrial crops which form
the basis of the manufacturing industry were to be allocated more investment.
Livestock operations and reforestation will also receive attention. A
second focus (up to 25 percent of the plan's funds) will be on the
improvement of the transportation network, especially road, with the
emphasis on rehabilitation.
The following World Bank major projects, now in the planning stage, will be
submitted for international bids: (The amount of development institution
financing is approximate.)
Project: Forestry Management and Protection
Total Cost: $22.6 million
IDA Financing: $7 million
Cofinancing: Switzerland, $6.5 million
Norway, $2 million
Responsible Ministry: Animal Husbandry, Fisheries, Forestry and Water
Focus: Forestry development and institutional development including:
environmental protection program, rural, forestry, soil conservation,
natural forest protection; and Mangoro pine plantation maintenance.
Project: Education Section Reinforcement
Total Cost: Not yet estimated
IDA Financing: $18.5 million
Responsible Ministry: Education
Focus: To improve efficiency of the education system with particular
emphasis on policy and financcial changes regarding higher and basic
Project: Highway VII
Total Cost: To be determined
IDA Financing: $40 million
Responsible Ministry: Public Works
Focus: Maintenance and rehabilitation of highway network and rural roads;
strengthening of Ministry of Public Works and private transportation
Project: Public Sector Adjustment
Total Cost: To be determined
IDA Financing: $110 million
Responsible Ministry: Finance
Focus: To broaden thrust of reforms aimed at improving environment for
commercial enterprises in public and private sectors, restructuring and
rehabilitating the public enterprise sector, and banking sector reforms.
Project: Titanium Mining
Total Cost: To be determined
IBRD Financing: $35 million
Responsible Ministry: OMNIS
Mining and export of mineral sands on the Malagasy east coast for production
of titanium dioxide.
Project: Agricultural Adjustment
Total Cost: To be determined
IDA Financing: $81.7 million
Responsible Ministries: Agricultural Production and Agrarian Reform; Animal
Husbandry, Fisheries, Forest and Water Resources; Commerce
Focus: Second phase of support to major policy reforms in agriculture to
emphasize removal of export constraints, and promotion of investments to
increase and divesify agro-exports.
Project: Fana Plain Development
Total Cost: To be determined
IDA Financing: $13.1 million
Responsible Ministry: Public Works
Focus: Flood control of Antananarivo Plain and institutional strengthening
for flood control, sanitation, and land use.
Project: Economic Management and Social Action Program
Total Cost: To be determined
IDA Financing: $7 million
Cofinancing: Africa Development Bank, United Nations Development Program,
Switzerland, France, U.S. AID
Responsible Ministry: Finances Directorate of General Planning
Focus: To strengthen the government's economic management capabilities by
supporting key macroeconomic management institutions and to initiate a
program to address pressing social questions.
Project: Power Generation
Total Cost: $80 million
IDA Financing: $13.4 million
Responsible Ministry: Industry, Energy, and Mines
Focus: The project will consist of power generation (Ambodiroko Hydroplant)
and distribution. Expansion of the carbonization of Haut Mangako;
industrial energy efficiency projects; contribute to investments in the
least-cost expansion plan of the petroleum subsector; and continuity for
technical assistance for energy and power system planning.
Project: Titanium Mining Engineering
Total Cost: To be determined
IDA Financing: $6.2 million
Responsible Ministry: OMNIS
Focus: To finance OMNIS's share of feasibility study of the Titanuim Mining
Total Cost: To be determined
IDA Financing: $10.3 million
Responsible Ministry: Health
Focus: To assist in the development of population activities and strengthen
primary health care and maternal and child health services, including
import, production, and distribution of essential drugs.
Project: Agricultural Extension
Total Cost: To be determined
IDA Financing: $23.6 million
Responsible Ministry: Agricutural Production and Agrarian Reform; Animal
Husbandry, Forest and Water Resources; Commerce
Focus: To assist government in seeking sustainable increases in
agricultural production through an improved and financially sustainable
agricultral extension system.
Project: Agricultural Research
Total Cost: To be determined
IDA Financing: $11.3 million
Responsible Ministry: FOIFA/Centre National de Recherce Appliquee au
Focus: Establish a national agricultural research policy focusing on real
farmers' constraints; strengthening necessary linkages with agricultural
extension; reinforcing FOFIFA's managing capacity, improving donor
coordination; developing human resources; and rehabilitating research
Projects in the Early Planning Process
Education III, $25 million, to improve the efficiency of the education
system, with particular emphasis on policy and financial changes regarding
higher education and basic education. Ministry of Education.
Energy I, $59.8 million, integrated energy project, including planning and
programing rehabilitation and expansion of power facilities. Ministry of
Industry, Energy, and Mines/National Power Authority (Jirama).
France continues to be the most important bilateral donor and has over the
past 5 years supplemented its project aid with structural adjustment loans
devised as balance-of-payment support to enable public sector purchases of
development-related imports from French suppliers. The 1987 allotment was
for $27.4 million.
The World Bank's International Development Association and the EC's European
Development Fund are the principal sources of multilateral aid. Madagascar
has obtained substantial new aid commitments from OECD donors, Austria,
Belgium, Canada, Federal Republic of Germany, France, Israel, Italy, Japan,
Spain, Sweden, Switzerland, the United Kingdom, and the United States.
Madagascar has received renewed support from the World Bank on concessional
terms. Concessional aid from all sources pledged for 1986 was for $300
million, with a further $330 million pledged for 1987. The majority of aid
is now focused on agricultural development, infrastructure renewal, and
rehabilitation (mainly transportation), and balance-of-payments support
[including compensatory finance and STABEX (Lome Convention
balance-of-payment support) payments
A sixth IMF stand-by arrangement (and a new debt rescheduling) was agreed
upon in September 1986 for $35.2 million. By the time of the IMF's mid-term
review, only $11.7 million had been drawn. There- after, drawings resumed
following the major devaluation at the end of June 1987. This latest
stand-by arrangement expired in March 1988. Debt rescheduling by the Paris
Club, providing some $210 million relief in service payments, was agreed
upon a month after the stand-by.
Madagascar maintains a single-column tariff with dutiable value based on the
CIF price of the landed goods. Duties range from 5 to 35 percent.
Consumption and importation taxes also are levied on imports from all
countries on a nondiscriminatory basis.
All weights and measures are pormulgated according to the Metric System.
Certain documents are required for commerical shipments to Madagascar
regardless of the value or type of transportation. These are:
Bill of Lading (or Air Waybill or Postal Receipt)
Certificate of Origin, though not normally required, may, nevertheless,
be required from time to time by importer, bank, or letter-of-credit
Pro Forma Invoice (to support the importer's license application
Additional documents may be requested by the importer, SGS Control Services
or both to meet requirements under the preshipment inspection system.
Modes of Shipment
Ocean Cargo Services--Mediterranean Shipping Co., S.A., located at 96 Morton
Street, New York, N.Y. 10014 (Tel. (212) 627-5300), provides direct coverage
to Madagascar (Toamasina), from several U.S. ports: New York, Boston,
Philadelphia, Baltimore, Norfolk, Savannah, Jacksonville, and Charleston,
Houston, and New Orleans.
Air Cargo Service--Air France offers air freight service between the United
States and Madagascar by way of Paris, France from Boston, New York,
Chicago, Houston, Los Angeles, and Anchorage, Alaska.
Imports are exempt from the payment of all duties and taxes when the total
amount of the tax payable (customs duty, and import and consumption taxes)
does not exceed 100 FMG (Malagasy francs) and provided that the consignments
in question are not multiple or repeated consignments originating from the
same sender or sent to the same consignee.
No import duties are levied on the following:
-Noncommercial parcels sent by postal packet, parcel post, or by
air, of a value of use less than 10,000 FMG, when no import declaration
-Commercial consignments sent by postal packet, parcel post, or
-Objects imported by travelers;
-Books, publications, and documents referred to in Annex A to
the UNESCO Agreement and originating in the contracting countries; and
-Seeds intended for cultivation tests subject to compliance with
conditions stipulated by the Decree Law of November 6, 1956.
Import Duties on Petroleum Products
Petroleum imports face the following rates of duty in lieu of separately
imposed customs duty, fiscal duty, and value-added tax.
Gasoline 68 percent
Kerosene 14 percent
White Spirit 24 percent
Aviation Fuel 37 percent
Diesel Oil 24 Percent
Lubricating Oil 31 percent
Natural Gas 45 percent
Exemptions from Import Tax
Fresh and dried vegetables intended for cultivation tests subject to
compliance with conditions stipulated by Decree Law No. 304 D-CG of November
6, 1956, are exempt from the import tax, as are arms and munitions intended
for the security forces of Madagascar.
Exemptions from Consumption Tax
The following items are exempt from the Consumption Tax: fixed oils intended
for industrial uses; denatured alcohols when they have been prepared in
conformity with provisions of Articles 150 and 151 of Decree No. 61-467 of
August 14,1981; and crude salt intended for use in sea fishing subject to
compliance with the control measures stipulated by the Director of Customs
and the Head of the Indirect Taxation Department (Decree-law of November 6,
Most merchandise entered for consumption is subject to a transactions
tax. This tax generally is levied at a rate of 12 percent and is based on
the import value of the item, including customs duties and other taxes
levied upon entry.
Chemicals imported for the manufacture of pharmaceuticals bear a 25 percent
import tax, subject to an attestation of destination document certified by
the Minister of Social Affairs entitled Direction des Pharmacies at
Laboratories and by the Minister of Economy and Commerce entitled Direction
A Turnover Tax of 10 percent and a Consumption Tax of 10 percent are levied
on all textile products regardless of country of origin. Imported textile
products, likewise, bear an import tax of 50 to 90 percent in addition to
All imports are subject to an annual import program, the overall value of
which is determined by the Central Bank and the Ministries of Finance and
Economy, and Commerce and Industry. Import licenses are issued to importers
by the Directorate of Imports in the Ministry of Commerce.
The Ministry of Commerce allocates quotas to importers within the overall
limit of the import program, and licenses are issued freely up to the limits
of those quotas. There are two categories of quotas: (1) those open to
merchants and (2) those open to industrial enterprises and end-users of the
imported products. Beginning January 2, 1987, a liberalized import regime
was introduced within the context of the annual import program. Each month,
specific foreign exchange allocations are set aside for imports of inputs
(spare parts, raw materials, and small equipment goods) and non-food
consumer goods. All traders/purchasing agents with satisfactory taxpayer
and legal records may submit applications for imports under this regime.
Owing to severe foreign exchange constraints, it has not been possible to
adhere strictly to the annual import program. In practice, an ad hoc
committee (Comite Technique des Paiments Exterieurs) consisting of
representatives of all ministries concerned, the Central Bank, and the
commercial banks meets on a weekly basis to administer the limited available
foreign exchange and to insure that the actual imports are congruent with
programmed priorities and do not exceed foreign exchange availabilities.
The valid period of a license, any tolerances permitted, and any extensions
to the valid period allowed are spelled out in the license.
Since December 13, 1986, Malagasy importers have had to deposit 10 percent
of their monthly foreign exchange allocation with the Central Bank.
Companies that earn over half their income from exports are exempt from the
import deposit scheme.
These are levied on the f.o.b. value or volume of selected exports. Ad
valorem rates vary from 1 to 25 percent. For vanilla the rate is 15
percent. Coffee and cloves face specific rates, respectively of FMG 19 and
110 per kilogram. There is, in addition, an export surchage in effect.
Only shellfish, sisal, and chrome are exempt. Present rates are 10 percent
on coffee, 11 percent on vanilla, 15 percent on cloves, and 10 percent on
Exports to Madagascar must be inspected prior to shipment in the country of
origin for quality, quantity, and price by the Societe Generale de
Surveillance (SGS) SA of Geneva, Switzerland, before they are eligible for
customs clearance in the host country. SGS's New York office is at 42
Broadway, New York, N.Y. 10004, Telephone: (212)482-8700.
Special Import Requirements
The Government of Madagascar through the parastatal, Regie Malagasy des
Monopoles Fiscaux (RMMF), is the sole importer of alcholic beverages.
Acting as a middleman between Madagascar's wholesalers (importers) and
foreign suppliers, the organization does not buy for its own account.
Imports of parts and accessories for vehicles and motorcycles by air are
subject to the prior authorization of the Ministry of Economy and Commerce.
Textile Regulations--Madagascar has instituted a series of restrictive and
qualifying regulations on textile and apparel imports to protect local
production. All textile imports are subject to global quotas that are
established annually. The following items may not be imported into
Madagascar: silk and silk waste, metallized textiles, wool and other animal
hair, cotton, carpets, rugs, mats, matting, and tapestries, wadding and
felt, twine, cordage, rope and cables, special fabrics, impregnated and
coated fabrics, knitted and crotched goods, articles of apparel and
clothing, and other made-up textiles.
The following articles of textile and apparel may be imported with the prior
authorization of the Ministry of Economy and Commerce: Woven fabrics of
non-silk, advanced waste of sheep's or lamb's wool, and fine or coarse
animal hair, not pulled or garnetted; cottage gauze, stockings and clothing
for babies, gloves and made-up accessories for articles of apparel; and felt
Other Restricted Imports--All vegetable or plant products which might bear
germs, diseases, or parasites are subject to inspection and control. Other
plant and plant products may not be imported or if imported, are admitted
Certain imports of live animals, poultry, other birds, animal carcasses, and
byproducts of all the preceding, require sanitary and other special
certificates. Importers should be consulted in each instance.
Imports of animals and food grain for animal feed are subject to prior
authorization from the Direction de l'Elevage et de la Peche Maritime. Such
animal and food grains should be accompanied by a sanitary certificate and a
certificate of origin issued by the authorities of the country of origin.
The following items are prohibited from importation except as noted:
Micronised and microfined aspirin, except for effervescent tablets or coated
tablets; and toothpaste, except pastes sold in drugstores for exclusively
After years of emphasizing self-sufficiency and creating obstacles to
foreign private investment in Madagascar, the Malagasy Government is
increasingly viewing such outside help as essential for economic growth.
The preferred form of foreign private investment over the last few years has
been long-term financing with management and technical contracts. To a
growing extent, the government seeks to direct foreign participation to
development-related enterprises. The legal framework for this participation
exists under the Code of Investment, Law No. 85.001, adopted in June 1985.
Foreign investors are guaranteed the right to repatriate dividends. Capital
may be repatriated only upon the termination of the invest- ment. The law
does not prevent the guarantee of more extensive benefits covered by
treaties or agreements concluded between Madagascar and other countries.
Foreign investors are subject to national treatment in areas of fiscal and
social obligations, unless specific bilateral agreements provide for an
Private investors, both domestic and foreign, may operate in all sectors of
economic activity except: banking and insurance; the production and
distribution of energy; water supply; shipbuilding (vessels of over a
certain tonnage); exploration, prospecting, surveying, exploitation, and
transportation of hydrocarbons as defined in the Petroleum Code; the
processing and distribution of petroleum products; mining activities as
defined by mining legisla- tion; and activities potentially affecting
national security or law and order. Even in such reserved sectors, however,
the state may enter into agreements under which private sector companies
will be sole or joint operators. Each proposed investment project in the
reserved sector will be considered on a case-by-case basis.
Approval of Investments
All foreign direct investment requires the prior approval of the Minister of
Finance (Antaninarenina, Antananarivo; Telephone: 216-32; Telex: 22339,).
The exact conditions for a specific investment must first be worked out with
the responsible ministry.
Madagascar has bilateral investment agreements with France and West Germany.
U.S. Investment in Madagascar
The U.S. foreign direct investment position in Madagascar was $30 million at
year-end 1985, the latest year for which figures have been released. Exxon
Corporation of New York, N.Y., and Tenneco, Inc. of Houston, Texas, have
subsidiaries in Antananarivo.
The U.S. Government's Overseas Private Investment Corporation can guarantee
American investments in Madagascar under a 1963 agreement between the two
countries. OPIC also provides to U.S. investors loan guarantees and direct
Rules Covering Investment
Preferential Plans--All foreign investments are subject to a preferential
plan that defines the scope of the investment and the investor's
responsibilities and privileges. The plan covers all companies, regardless
of their size or organization, that operate on Malagasy territory in any of
the following industrial projects:
-- Industrial crops
-- Industrial livestock breeding
-- Industrial fisheries
-- Forestry and reforestation industries
-- Industrial preparation and processing of vegetable, animal, or forestry
-- Refrigerated warehousing, storage and handling of food products
-- Surveying, mining or processing of minerals or hydrocarbons
-- Manufacturing industries and craftmaking
-- Production of energy and water supply
-- Tourism and hotel industry
- Public works and construction
-- Transportation and communication
A project is considered eligible for a preferential plan if it meets the
-- It must operate on Malagasy territory and be involved in an unreserved
-- It must contribute to the accomplishment of the goals established by the
-- It must be technically, economically, and financially viable; and
-- It must return a positive foreign currency balance.
Performance Requirements--Preferential plan applications must be accompanied
by a dossier on the legal status of the person or entity filing the
application, and on the technical, economic, financial, and commercial
assessment of the project.
The application must include the commitment of the company to fulfill the
-- To give priority to Malagagy raw materials, goods, and services;
-- To give priority to the employment and training of qualified Malagasy
managers and supervisors;
-- To adopt technical processes that are best suited to the country and
that provide the best technical guarantees;
-- To provide goods and services in accordance with national and
international standards of quality;
-- To protect the ecology of the country; and
-- To provide progress reports to the relevant supervisory ministries.
Any company seeking to benefit from a preferential plan must submit a
document which presents investment goals, production targets, price
forecasts, staff training objectives, and nationalization of management and
profits. The prospective investor must begin implementing the investment
program within 1 year. Failure will result in the invalidation of the
registration. Throughout the duration of the plan, the investor must submit
periodic accounting reports to the respective supervisory ministry.
Preferential plans cannot be transferred between ministries without Malagasy
Priority Registration--Priority registration applies to companies that
provide new production capacity for goods or services, or additional
investments to installed production capacity or to diversify the activities
of existing companies. Priority-registered companies are eligible for
customs, fiscal, financial, economic, and social advantages. They are
exempted from the import tax on factory accessories and equipment. For
hotel projects, this exemption can be extended to cover equipment for these
establishments, if it is not produced locally.
Priority-registered companies are also exempt from the real estate
disclosure tax payable on bank loans for financing registered investments
and on bank endorsements issued as performance bonds for supplier credit
operations undertaken with the foreign country. They also enjoy a 50
percent reduction in preliminary costs for the acquisition of buildings
required for operations.
Priority-registered companies are also exempt from corporate income and
nonsalary income taxes under the following conditions:
(1) Total exemption for the first year of actual operation; the first year
of the tax write-off shall only begin the year after that in which the
period of total exemption terminates; and
(2) A reduction of two-thirds, one-half, and one-third, respectively, of the
tax rate applicable to the last three financial years covered by the
These provisions can also be applied to additional investments or
diversification investments provided that the amount of these new
investments exceeds existing fixed assets after reassessment in accordance
with current legislation.
Should additional or diversification investments fail to meet the above
requirements, tax rates applicable to corporate incomes and nonsalary
incomes are adjusted according to the following equation: new investments
divided by existing fixed assets in accordance with current legislation
muliplied by 100.
Priority-registered companies are allocated foreign currency under the
General Import Regulations. They are authorized to transfer abroad, under
current exchange control regulations, licenses, royalties, fees for
technical assistance to companies, dividends, and also accounts generated
through the termination or liquidation of activities, after due
authorization, based on the contribution invested in foreign currency.
No subsequent regulation or legislation can modify a perferential plan
during the life of the registration; however, a registered company may apply
for more favorable benefits subsequent to the date of registration.
Partnership Contract--A partnership contract legally associates a public
body and one or more foreign or Malagasy private partners when the
government invites partners to participate in a project of economic and
social interest to the country.
In addition to all or part of the advantages deriving from preferential
plans, the partnership contract can specify other advantages designed to
reduce the execution (mobilization) cost of the investment, to otherwise
facilitate execution, to reduce preliminary expenditure, or to reduce
operating costs until such time as the investment reaches full profitability.
Partnership contracts must be signed by the persons or legal entities
who contribute capital to execute the registered investment; these persons
are subject to ratification according to legal procedures.
Investment Disputes--Investment code disputes are to be settled by
arbitration. However, infractions of Malagasy laws or government
regulations, and any involvement of third-party interests in such
infractions subject all parties to the jurisdiction of the Malagasy criminal
INTELLECTUAL PROPERTY PROTECTION
International Patent Cooperation Union
Since its 1978 adherence to the Patent Cooperation Treaty (PCT) (Washington
D.C., 1970), Madagascar has been a member of the International Patent
Cooperation Union, an organization to which the United States and 33 other
countries belong. The PCT is administered by the World Intellectual
Property Organization (WIPO), located at 34 Chemin des Colombettes, 1211
Geneva 20, Switzerland. This treaty provides centralized filing procedures
and a standardized international application format.
According to Foreign Business Practices, published by the Office of Trade
Finance, Internatonal Trade Administration, U.S. Department of Commerce,
1985, "A U.S. national or resident may file, under the PCT, an international
patent application at the U.S. Patent and Trademark Office (PTO) and
designate in that application the member countries in which he desires
patent protection. The filing has the same effect as if that person had
filed several individual applications for the same invention in those member
Internatinal Union for the Protection of Industrial Property
Madagascar is also a member of the Paris-based Union, which, according to
Foreign Business Practices, is "the centerpeice of international treaties on
patent rights (and) the oldest and most important of those in
existence...founded in 1883." The United States has been a party since 1887
(Madagascar since 1963). Presently, 88 countries are members. The
convention applies not only to patents, but also to trademarks, industrial
designs, utility models, trade names, and, under the 1967 Stockholm
Revision, to investors' certificates. The main provisions concern (1)
national treatment and (2) the right of priority.
National Treatment--"Under the national treatment provision, the Paris Union
provides that, with regard to the protection of the aforementioned types of
industrial property, each member country must grant the same protection to
nationals of other member countries as it grants to its own nationals. This
provision guarantees that foreign applicants will be treated at least as
well as domestic applicants in pursuing protection of their industrial
property rights. Madagascar at present does not have its own intellectual
property rights law but is developing such a law which will specify
procedural rules, prices, and terms governing intellectual property rights.
This law is expected to be completed and in effect by the end of 1988.
Until its implementation, all requests by Malagasy nationals for protection
will be handled by (WIPO).
Right of Priority--Under the right of priority provision, on the basis of a
regular application first filed in one of the member countries, the
appplicant may, within a certain period (12 months for patents, 6 months for
trademarks) apply for protection in any of the member countries and have
such later filed applications regarded as if they had been filed on the same
date as the first application.
Other Provisions--The Paris Union also contains provisions designed to
protect patent owners against arbitrary forfeiture of their patents if not
used or worked. It establishes the principle of independence of patents,
meaning that, once a patent has been granted, its subsequent revocation or
expiration in the country of original filing does not affect its validity in
other countries. The convention also provides safeguards against
invalidation of a patent merely because the patented product was imported
into the country of destination. Under a revision of the Paris Union, a
U.S. national may apply for the registration of a trademark in any adherent
country, if it is otherwise a proper application, without the need of a
prior "home country" registration of the same mark in the United States.
The revision also strengthens protection for marks for services, as well as
for those of goods.
All of the data below are presented in Malagasy francs (FMG's).
Net company profits derived from all sources within the country are taxed
annually at the rate of 45 percent. There is, however, a minimum tax which
must be paid by all companies; for l988 that amount was FMG 50,000 plus 0.1
percent of the firm's annual turnover. For joint stock companies in 1988,
the minimum tax was FMG 400,000 plus 0.1 percent of the company's annual
turnover. This amount must be paid in advance of the tax year. The amount
may be applied to the year's tax bill, but no refunds are made.
In addition, there is a tax surcharge of 25 percent on that portion of the
income generated from rents, where the rental income exceeds FMG 100,000.
Nonresident companies are taxed on their profits derived in Madagascar. Oil
companies are subject to a separate tax year.
Partnerships are exempt from the company tax, but each partner is subject to
the individual income tax.
Interest paid by the Madagascar Savings Fund is exempt from taxes, as well
as interest from treasury bonds, investment bonds, and other government
Various tax incentives are granted to investments under the terms of the
1985 Investment Code. The incentives are available for invest- ments in the
areas of agriculture, forestry, fishing, food cold storage, tourism, oil,
energy, water, transportation, communications, and manufacturing. The
incentive period is generally 5 years. The level of incentives varies
according to the value of the investment, the number of jobs created, the
product, export earnings, and location. Incentives may include exemption
from import taxes, from transaction tax, reduced real estate taxes, and
reduced or eliminated income taxes over a set period of years.
Individual Income Tax
Tax on Nonwage Income--The effective minimum tax is 60 percent. Included in
the definition are nonwage income and profits from partnerships or legal
entities not subject to the company tax, derived from sources within
Madagascar whether by residents or nonresidents. Individuals with an annual
turnover of less than FMG 10 million (FMG 5 million for services) may opt
for the estimated income assessment. A deduction of FMG 2,400 is allowed
for each dependent.
Alimony and statutory annuities are tax exempt.
The actual tax rate for an individual is calculated by dividing annual
income by annual income plus FMG 7 million. A 25 percent surcharge is
levied on the part of the tax assessed that corresponds to the share of
rental income should the former exceed FMG 100,000 per month.
The tax on earned income is assessed on wages and salaries, with exemptions
allowed for pensions, indemnities, severance pay, allowances to military
draftees, and honorary awards. A deduction of FMG 200 a month is allowed
for each dependent. The actual tax rate is calculated by dividing the
monthly salary by FMG 1.1 million. The maximum rate is 60 percent. The
system is implemented on a pay as you earn basis, with monthly withholding
varying between FMG 200 and 2,000.
A capital income tax is levied on capital income, attendance fees, prize
bonds, and distributed company premiums. Only 50 percent of the capital
income declared by individuals or companies is subject to this tax.
The rates that apply to the various types of capital income are: 30 percent
on prize bonds, 45 percent on dividends and interest from bearer stocks and
bonds, 8 percent on dividends reinvested in treasury bonds, and 25 percent
on all other types of capital income.
The tax on foreign transfers, at the rate of 15 percent, is levied and
withheld during the year on income transferred abroad to non- resident
persons or companies. Exemptions include scholarships, normal purchase
prices transferred abroad for imports, and capital income subject to tax in
There is a capital gains tax levied on the proceeds of real estate
transfers. Both the portion of the transfer proceeds subject to tax and the
tax rate itself vary; the minimum rate is 10 percent; the maximum, 30
A land tax is levied annually on the estimated productive value of land
based on the type of crop use. Land owned by the Malagasy Government, local
authorities, and public institutions is exempt; newly planted land is exempt
for 5 years (10 years for coffee trees). Rates vary according to usage: FMG
25 per hectare for pasture, FMG 125 for rice, FMG 450 for coffee and sugar,
FMG 1,500 for non- agricultural use.
Buildings are taxed on their rental value. Buildings owned by government,
local authorities, and public institutions are exempt. The rate for
owner-occupied residential buildings is 3 percent; for owner occupied
nonresidential, 5 percent; for nonowner-occupied residential buildings, 6
percent; and for nonowner-occupied nonresidential, 7 percent.
Property transfer duties are levied on the sale, lease, or exchange of
property, company formation, corporate mergers, transfers of shares,
financial claims, and auctions. The tax is based on the declared value of
property or nominal value of the assets involved. Fixed and proportional
rates apply. Proportional rates vary between 1 and 12 percent according to
the type of the transaction.
Taxes on Goods and Services
A value-added tax (VAT) of 15 percent is levied on the value added in each
step of the manufacturing or servicing of a good or service. Various
exemptions are granted as specified in the tax code, namely, exports,
livestock, poultry, monopoly products, and health equipment and products.
The VAT on imports is calculated on the c.i.f. price plus the customs and
fiscal duty assessed.
Excise taxes varying between 5 and 60 percent, are levied on sugar, oils,
tobacco products, beverages, salt, clothing, food products, and furniture
that are produced locally or imported from abroad.
An insurance tax is levied on premiums and related charges collected by
insurance companies. Rates for life insurance are 3 percent; sea, river,
and air transportation insurance, 4 percent; annuity contracts, 5 percent;
fire insurance, 20 percent; and all other insurance, 4.5 percent.
Madagascar levies two types of taxes on motor vehicles. Company vehicles
are assessed a flat tax of FMG 50,000 per car per year. Personal cars face
a tax rate based on engine power; the tax ranges from FMG 250 to 8,000; the
rate is halved for cars more than 10 years old.
Two additional taxes are levied by local authorities: the first is on
professional services, the second on business liquor licenses. The
professional tax is either a fixed rate from FMG 600 to 120,000, according
to the type of service provided; the license fee ranges from FMG 3,000 to
190,000 depending on the type of establishment and level of local population.
A stamp tax is levied on all legal and administrative documents and on all
receipts and commercial instruments. Commercial instruments bear a stamp
tax of 0.5 percent; postal checks, 0.05 percent. All other documents face
fixed rate charges from FMG 10 to 800.
TRANSPORTATION AND UTILITIES
Madagascar's international airport is located 10 miles outside the city of
Antananarivo; its mailing address, phone number, and call letters are
Antananarivo Airport, PB46, Antananarivo. Telephone: 440-98; and TNR,
Regular air cargo service from the United States through Air France is
available from Anchorage, Boston, Chicago, Houston, Los Angeles, and New
York via Paris.
The airports at Mahjanga, Toamasina, and Nossi Be can also accommodate large
By regional standards, Madagascar has developed a dense domestic air
transportation network in response to the distances between population
centers, the rugged terrain, costly construction, and maintenance of surface
transportation. There are 56 airports, of which 17 are built to all-weather
standards, including five suitable for international flights. The remainder
are ground or grass strips.
The international airport at Antananarivo handles 50 percent of all traffic;
15 small airports carry 30 percent of the traffic, while 40 very small
airports share the remaining 20 percent.
Air Madagascar, of which the government owns 80 percent, Air France 18
percent, and private shareholders 2 percent, provides international air
service to Paris, Marseilles, Zurich, Djibouti, Kenya, Mauritius, and
Reunion. Its aircraft fleet includes a Boeing 747 (carries cargo and
passengers) for European service, two Boeing 737s for domestic and regional
service, two Hawker Sideley-748s, and four Twin Otters for domestic
service. A subsidiary operates several smaller aircraft for air taxi and
Sea and Port Facilities
There are four main ports: Toamasina, the main international port, serves
the populated central highlands by means of the railway and handles 55
percent of the total traffic; Mahajanga handles 11 percent; Antsiranana in
the north, 5 percent, and Toliary in the south, about 4 percent. The
remaining 25 percent of traffic is handled by 18 smaller coastal shipping
Foamassina has some 1,1640 feet of wharves and 291,520 square feet of
warehouse space. Crane capacity is 80 tons. A development project is under
way to add two berths, new transit sheds, and warehouses and provide
mechanical cargo handling equipment.
Antsiranana has 984 feet of wharves and about 161,400 square feet of
warehouse space. At Mahajanga and Nossi-Be, cargo is discharged into
lighters. Toliary has piers, but lighters are also used.
Mediterranean Shipping Co. S.A. (MSC) provides surface ocean transportation
to Madagascar from the following U.S. East Coast ports: Boston, New York,
Philadelphia, Baltimore, Norfolk, Charleston, Savannah, and Jacksonville,
and from Houston and New Orleans on the Gulf Coast. From Madagascar, MSC
provides shipping services to Maputo, Mozambique; Dar-es-Salaam, Tanzania;
Mombasa, Kenya; Mogadishu, Somalia; Reunion; and Mauritius. MSC is located
at 50 Broadway, New York, N.Y. 10006, Telephone: (212)363-8970.
The Societe Malgache des Transport Maritimes (SMTM), the state- controlled
international shipping line, operates two cargo vessels for the country's
Although Madagascar relies on maritime shipping for the bulk of its foreign
trade, coastal shipping is important. There is also a navigable canal along
the east coast. Coastal shipping is handled primarily by the Compagnie
Malgache de Navigation (CMN), which is 92 percent state owned and operates
nine vessels of which eight are leased from the government. Several private
operators continue operating one or more vessels each in coastal or
interisland shipping to nearby islands in the Indian Ocean.
Railways are operated by the Reseau National des Chemins de Fer Malagasy
(RNCFM), a parastatal agency under the auhority of MTMT. The railways
consist of two separate and unconnected single-track meter-guage systems.
The northern system (about 435 miles) connects the capital, Antananarivo,
with industrial areas in the high plateau region, the main part of
Toamasina, and the rice and chrome producing area of Lac Alaotra. It is the
more important line and main mode of transportation between the most
populated and developed parts of the country. The southern system (101.3
miles) connects the regional center of Fianarantsoa with the main
coffee-producing area in the south and the port of Manakara.
RNCFM is expected to remain the principal form of transportation for bulk
commodities such as petroleum products, grain, chemicals, and construction
materials from Toamasina to the central highlands.
The road network is comprised of 31,070 miles of roads, of which 3,231.3
miles are engineered earth and gravel and 24,545.3 miles are feeder roads
and tracks. The paved road network, the most important element of the
surface transportation system, consists of a main north-south artery
(1,056.4 miles)--RN4 and RN7--stretching frm the regional center of
Mahajanga in the north to Antananarivo in the center and continuing to
Fianarantsoa in the south-central region and Toliary in the southwest.
Other paved roads branch off from this central axis or are found around the
major coastal towns. The paved and engineered earth road network connects
all regional capitals by all-weather roads. Road links to the southern
region are mainly earth roads or tracks, most of which are in poor
condition, yet with the prevailing dry climate are passable year round.
The total vehicle fleet in 1984 and 1985 numbered about 46,700 vehicles, of
which 42,000 were in working order. They include 17,200 commercial
vehicles, of which 12,000 are pickup trucks for passengers and freight, and
5,200 trucks and semitrucks.
Electricity in Madagascar is available in alternating current (A.C.) at 50
Hertz, 220/380 or 127/220 volts, 1,3 phases, generally 2,4 wires.
JIRAMA, Jiro sy Rano Malagasy (Malagasy Electricity and Water Corp.),
is the national power and utility company, and primary source of electricity
generation and transmission. In 1986, JIRAMA had a total capacity of 204
megawatts (MW), of which 105 MW was derived from 10 hydroelectric plants and
99 MW from 56 diesel plants. Over half of the hydroelectric capacity, 58
MW, is derived from the Andekaleka power plant in the Vohitra River. In
1986, JIRAMA generated about 400 million kilowatt hours (kWh). Independent
producers generated about 80 million kWh.
The transmission system operates on 183, 63, and 35 kilovolts (kV); the
distribution network on 20 and 5 kV. The interior of the island is
JIRAMA's expansion plans concentrate principally on the development of its
hydroelectric resources in order to decrease its dependence on imported
oil. Andekaleka is scheduled to double its capacity to 116 MW, and the
feasibility of a 300 MW plant on the Onive River has been studied. Four
other facilities, totaling 75 MW, are also under consideration. A
coal-fired unit near a mine in Taliary is also under consideration.
Financing has been received for a project to rehabilitate, maintian, and
expand Madagascar's power generation, transmission, and distri- bution
network. The project will provide a cost-effective expansion plan for the
JIRAMA system as well as increase the use of existing surplus hydropower
through expansion of the distribution system.
Madagascar's telecommunications facilities include a system of open wire
lines, coaxial cables, and radio relay links. They also consist
of a submarine cable to Bahrain, one Indian Ocean INTELSAT station, and
96,000 telephones or 0.9 telephone per 100 of population.
Radio-Television Malagasy (RTM) is state owned and conducts radio broadcasts
in French and Malagasy from 36 transmitters.
Radio Madagasikara is a second state-owned broadcasting service that is
programmed in French and Malagasy.
Madagascar's basic monetary unit, the Malagasy franc (FMG), is pegged
to a basket of currencies; the weight assigned to each currency in the
basket is based on the distribution of Madagascar's trade during 1973-80.
In accordance with the movement in the basket, the Central Bank of
Madagascar adjusts the Malagasy franc exchange rate on a daily basis against
the 10 currencies it quotes, namely, the Austrian schilling, the Belgian
franc, the Deutsche mark, the French franc, the Italian lira, the Japanese
yen, the Dutch guilder, the British pound, the Swiss franc, and the U.S.
dollar. The spread between the official buying and selling rates for the 10
currencies quoted by the Central Bank vis-a-vis the Malagasy franc is 1
Average U.S. dollar equivalents in the past 3 years have been as follows:
662.48 FMGs in 1985; 676.34 FMGs in 1986; and 1,069.21 FMGs in 1987. The
value of the Malagasy franc in U.S. dollar terms as of May 31, 1988 was
1,317.43 MFGs to the U.S. dollar.
Financial relations with all foreign countries are subject to exchange
controls administered by the Directorate of the Treasury, Exchange Control
Office, which also supervises the borrowing and lending abroad by residents,
the issue, sale or introduction of foreign securities in Madagascar, all
outward investments, and inward direct investment. Some of the exchange
control approval authority has been delegated to authorized intermediaries.
All exchange transactions relating to foreign countries must be effected
through such intermediaries.
All transactions valued at 10,000 FMGs or more must be handled through an
authorized bank. Central Bank authorization for each transaction is
represented by a certificate, issued by the commercial bank concerned, which
is required to clear the merchandise through customs. An import licence
entitles importers to purchase the necessary exchange (but not earlier than
8 days) before shipment when a documentary credit is opened.
Most payments for invisibles require the prior approval of the Ministry of
Finance. For some types of transactions, the approval authority has been
delegated to authorized intermediaries, either up to specified limits or for
any amount that is properly documented.
The banking sector consists of the Central Bank and three government-owned
banks. The National Bank for Rural Development (BYM) has 50 branches; the
National Bank for Industrial Development (BNI) has 13 branches; and the
National Bank of Commerce (BFV) has 22 branches which have primary
responsibility for providing for agriculture, industry, and commerce,
respectively. The three banks may provide credit to sectors other than
their specialization only as co-financier when the designated specialized
bank participates. In addition to the banks, three government entities are
authorized to take private sector deposits: the Treasury, the Postal
Checking System (CCP), and the National Servings Fund (CNE), the latter two
which operate through the postal system under the administration of the
Ministry of Post and Telecommunications. There are facilities in all post
offices, which make checking and passbook savings accounts accessible to
depositors in most parts of the country. In practice, the Postal System,
whose 250 branches give it the greatest possible representation throughout
the country, caters to the needs of the smallest depositors, but mobilizes a
relatively small amount of total funds.
A National Investment Fund (FNI) was established in late 1979 to mobilize
domestic savings for long-term development projects; its roll has been
U.S. EXPORT ASSISTANCE
To assist U.S. exporters to formulate sound credit policies applicable to
overseas markets, background information on individual Malagasy firms is
available from World Traders Data Reports (WTDRs), which may be obtained
through the nearest district office of the U.S. Department of Commerce.
Such information may also be obtained from private agencies. Some of the
principal private U.S. sources include: Foreign Credit Interchange Bureau
of the National Association of Credit Management, 229 Forth Avenue, New
York, N.Y. 10003; American Foreign Credit Underwriters Corp., 253 Broadway,
New York, N.Y. 10007; and Dun and Bradstreet, Inc., 99 Church Street, New
York, N.Y. 10007.
SELLING IN MADAGASCAR
Opportunities exist for U.S. exports of capital goods, components, and
in-puts for the private and semipublic industrial sector of the Malagasy
economy. To assist U.S. exporters, a listing of key Malagasy firms, by type
of product handled and year established where known, is presented below.
1987 SIC Product Description
0912 COMMERCIAL FISHING
SOMAPECHE-Societe Malgache de Pecherie, BP 324, Mahanga
1061 CHROMITE MINING
KRAOMA-Kraomita Malagasy, BP 936, Antananarivo (1966)
1987 SIC Product Description
1479 SALT MINING (SALT MARSHES)
Cie Saliniere de Madagascar, BP 29, Antananarivo
1499 MISCELLANEOUS NONMETALLIC MINING-GRAPHITE AND MLCA
Societe Malgache d'Exploitation Minieres, BP 266, Antananarivo
2011 MEAT-PACKING PLANTS
Societe Americaine, Grecque et Malgache Industrie de la
Viande, Antrahavola, Antananarivo
202 DAIRY PRODUCTS
Societe Malgache de Produits Laitieres, BP 4126, Antananarivo
CANE SUGAR REFINING
SIRAMO--Societe Siramany Malagasy, BP 1633, Antananarivo (1949)
2082 MALT BEVERAGES
Brasserie Star Madagascar, BP 3806, Antananarivo (1953)
2086 BOTTLED AND CANNED SOFT DRINKS AND CARBONATED WATER
Brasserie STAR Madagascar, BP 3806, Antananarivo (1953)
Societe des Cigarettes Melia de Madagascar, BP128, Antsiriabe
2211 COTTON, BROADWOVEN FABRIC MILLS (TEXTILES)
COTONA--La Contonniere d'Antsirabe, BP 45, Antsirabe
SOTEMA--Societe Textile de Majunga, BP 375, Mahajanga
2298 CORDAGE AND TWINE (Spinning and Weaving of Jute)
FITIM--Societe de Filature et de Tissage de Madagascar, BP 127,
1987 SIC Product Description
2621 PAPER MILLS
PAPMAD--Papeteries de Madagascar, BP 1756, Antananarivo
2731 BOOKS: PUBLISHING AND PRINTING
Editions Ambogontany, PB 40, Antananarivo (religious and school
Foibe Filankevitry Ny Mpampianatra, BP 202, Antananarivo
2731 MadPrint--Madagascar Print and Press Co., BP 9533, Antananarivo
(literary, technical, and historical books)
Maison d'Edition Protestante Antso, BP 660, Antananarivo
(religious, school, social, political, and general books)
Imprimerie Nouvelle, BP 2, Andranomahery, Route de Majunga,
NSPE--Nouvelle Societe de Presse et d'Edition, BP 1734,
Office du livre Malagasy, BP 617, Antananarivo, (Children's and
Edisiona Salohy, BP 7124, Antananarivo
Societe de Presse et d'Edition de Madagascar, BP 1570,
Antanarivo (non-fiction, reference, science, and university
Societe Malgache d'Edition, Antananarivo, BP 659, Ankorondrano,
Antananarivo (general fiction, university and secondary school
Societe Nouvelle d l'Imprimerie Centrale Antananarivo, BP 1414,
Lalana Ravoninahitriniarivo (Science and school textbooks)
Imprimarie Takariva, Antananarivo, (fiction, language, and
TPFLM, Trano Printy Fiangonana Loterand Malagasy, BP 1209,
Antanimena, Antanananarivo (religious, educational, and fiction
Imprimerie Nationale, BP 38, Antanananarivo (government
1987 SIC Product Description
2911 PETROLEUM REFINING
Societe Malgache de Raffinage, BP 433, Foamasina
SOLIMA, SOLITANY MALAGASY, BP 140, ANTANANARIVO
3111 LEATHER TANNING AND FINISHING
Omnium Industriel de Madagascar, BP 207, Antananrivo
314 FOOTWEAR EXCEPT RUBBER
Omnuim Industriel de Madagascar, BP 207, Antananarivo
Omnuim Industrial de Madagascar, BP 207, Antananarivo
3221 GLASS CONTAINERS
Sovema--Societe Verriere Malagasy, BP 84, Foamasina
4911 Electric Services
JIRAMA--Jiro sy Rano Malagasy, 149 Rue Rainandriamampandry,
Limited opportunities also exist for U.S. exports of transportation and
utilities equipment (usually, but not exclusively, by internationally
advertised tenders), and computer and laborsaving equipment for the service
industry sectors. A targeted list of Malagasy contacts appears below.
1987 SIC Malagasy Contacts
4011 LINE-HAUL OPERATION RAIL ROADS
Reseau National des Chemins de Fer Malagasy, BP 259, Soarano,
4412 SEA FREIGHT
CGM Compaigne Generale Maritime, BP 69, Toamasina
Compagnie Malgache de Navigation, BP 1621, Antananarivo
NCHP Navale et Commerciale Havraise Peninsulaire,
BP 1021, Antananarivo
1987 SIC Malagast Contracts
Societe Industrielle et Commerciale de l'Emyrne,
17 Rue Patrice Lumumba, Antananarivo.
Societe Naitonale Malgache des Transports Maritimes,
BP 4077, Antananarivo
SOLIMA Solitany Malagasy, BP 140, Antananarivo
4512 AIR TRANSPORTATION, SCHEDULED
Air Madagascar--Societe Nationale Malgache des Transports
Aeriens BP 347, Antananarivo
4813 TELEPHONE COMMUNICATIONS
Ministry of Posts and Telecommunications Antaninarenina,
4832 RADIO BROADCASTING STATIONS
Radio Madagasikora, BP 102, Antananarivo
4833 TELEVISION BROADCASTING STATIONS
RTM-Radio-Television Malagasy, BP 442, 101 Antananarivo
7011 HOTELS AND MOTELS (Principal)
Relais Aeriend D'Ambohibao
Hotel du Lido
Hotel del France
7383 NEWS SYNDICATS
ANTA--Agence Nationale d'Information "Saratra"
B.P. 386, Antananarivo (1977)
The principal distribution centers in Madagascar are Antananarivo, the
capital; Tommasina, the principal port; Antsitabe, 100 miles south of the
capital, and an agricultural and industrial center (population est. 80.000);
Mahajanga, the country's second largest city; Antsiranana, the country's
only shipyard; and the smaller cities of Fianarantsoa (population est.
70,000), Fort-Dauphin, Nosy-Be, and Fulear. The leading cities and their
populations are presented in Table 5. Almost all distribution, services, and
headquarters of commercial firms are concentrated in Antananarivo, with
branches throughout the country according to the size and importance of the
Antananarivo, Madagascar's capital and metropolitan center, with a
population of approximately 663,000, is the focal point of commerce
and industry. It is the site of the country's international airport and the
focal point of the island's rail and road network. The country's petroleum
company and the nation's banks are all headquartered in the city.
There are approximately 200 importers, wholesalers, and distributors, 124
exporters, and 32 representatives (sales indent/commission agents) in
Madagascar. A product distribution of these firms is presented in Table 6.
The leading business association in the country is the Federation des
Chambres de Commerce, d'Industries et d'Agriculture de Madagascar, located
at BP 166, Antananarivo. SINPA--Societe d'Interet Nationale Malgache des
Produits Agricoles--purchases and distributes all food crops.
SONACO--Societe Nationale de Commerce--administers all imports and exports.
Correspondence may be addressed to it at BP 3187, Antananarivo, Madagascar.
Approximately 10.3 percent of Madagascar's population live in urban areas;
half of those live in the cpaital. The country's literacy rate is 53
Madagascar imposes an extensive system of price controls at both the
producer and consumer levels; however, since l982, efforts have been under
way to reduce the scope of this program. By l986, only 5.4 percent of those
products consumed by modern households fell under price control.
Government buyers purchase not only engineering, architecture, and
construction services, but also equipment and supplies for infrastruc- ture
projects financed by international and other offshore lending institutions,
such as the World Bank and the African Development Bank. Prospective
bidders may learn of upcoming projects financed by the World Bank and its
soft loan affiliate, the International Development Association (IDA), by
subscribing to the World Bank's Monthly Operational Summary by contacting
the Johns Hopkins University Press, Journals Division, 34th and Charles
Streets, Baltimore, Maryland 21218; Telephone: (301) 338-7809.
Madagascar's Urban Population
Source: Africa South of the Sahara, Europa Publications.
Largest Concentration of Importers by Commodity
Commodities Importers Commodities Importers
Ready-Made Cloths 16 Wooden Furniture 9
Textiles 14 Hardware 9
Automobiles 13 Footwear 8
& Supplies 13 Paints 8
Building Materials 13 Steel Furniture 7
Construction Equipment 12 Radio/Phonographic 7
Foodstuffs 12 Batteries 6
Tobacco 12 Fuel Oil 6
Imitation Jewelry 11 Lubricants 6
Agricultural 11 Refrigerators
Novelties 10 Industrial Oils 5
Sewing Machines 10 Tires 5
Sources: SLAM Trade Year Book of Africa, 8th edition
The U.S. Embassy in Antananarivo monitors all bid announcements and promptly
reports them to the U.S. Department of Commerce. Within the Department of
Commerce, the Office of International Major Projects (OIMP) maintains
information on all such projects that exceed $5 million in value within the
following units: electric power generation and transmission, (202)
377-2732; transportation and communications, (202) 377-2835; and minerals,
metals, and fuels production and processing, (202) 377-5225. Information on
tenders under $5 million are received by the Office of Africa's Malagasy
Desk Officer ((202)377-0357).
Product and trade advertisements are popular in Madagascar and are carried
mainly through newspapers, magazines, radio, television, and billboards.
There is no motion picture advertising. There are no advertising
restrictions. The percentage of advertising expenditures devoted to the
various media segments is as follows:
Three newspapers, the Madagascar Matin (a French language daily), the
Midi-Madagasikara (a Malagasy language daily), and the Hebdo-Publicite
(a Malagasy weekly), accept advertisements. The two daily Antananarivo
newspapers are read by a large percentage of the population throughout
Madagascar. Advertising rates in these two newspapers vary from 600,000
FMG ($475) to 700,000 FMGS ($550) per 17 x 21 inch page depending on the
importance of the advertisement and the advertising text, with declining
rates according to the size of the advertisement (half, quarter, etc. page).
Magazines are read by a limited number of persons in the political,
economic, and commercial spheres of readership who represent only about 5 to
10 percent of Madagascar's population. The following periodicals accept
commercial advertisements: Revise de l'Ocean Indiea (Indian Ocean Review),
monthly; Dans les Media Demain (In the Media Today), weekly; Bulletin de la
Fiv. MPA, MA (monthly bulletin of the Association of Malagasy Businessmen);
Bulletin de la Chambre de Commerce, D'Commerce, d'Industrie, et
D'Agriculture (monthly). Advertising rates in the magazines vary from
300,000 FMGs ($240) to 350,000 FMGs ($275) per 8-by 11-inch page.
Advertising in the Bulletin of the Chamber of Commerce is the least
expensive with rates according to the type of text, length, etc.
Radio and Television
Radio-Television Malagasy (RTM) is state owned. Radio broadcasts are aired
in French, Malagasy, and English from 21 transmitters. Television broadcasts
are beamed in French and Malagasy from 36 transmitters. Rates for radio and
television advertisements are calculated on a case-by-case per minute basis,
the numbers of persons reached, translation if needed, and number of persons
who will speak, etc. Radio Madagasikara does not accept advertising.
There is only one billboard advertising company, Dokambarotia Malagasy
(DOMA), meaning Malagasy Advertising. Billboard advertising rates are
calculated according to the size of the sign, designs, length of text, etc.
A limited number of market research firms operate in Madagascar. Those
known to U.S. Department of Commerce follow:
Societe Malagasy D'etudes, Enterprise Mamokatra
D'organisation et de Gestion Boite Postale 3359
22 Avenue Grandidier 101 Antananarivo, Madagascar.
101 Antananarivo, Madagascar.
Cabinet Ramahol Imihaso Societe Sedric
Rue Rajakoba Augustin Boite Postale 4263
Ankadivato 101 Antananarivo, Madagascar
101 Antananarivo, Madagascar.
The following trade organizations operate in Madagascar:
FIV. MPA MA Groupement DES Entreprises DE
Boite Postale 1112 Madagascar (GEM)
101 Antananarivo, Madagascar Boite Postale 1338
101 Antananarivo, Madagascar
148 Route Circulaire OSIP
101 Antananarivo, Madagascar Boite Postale 4466
101 Antananarivo, Madagascar
Of the island's reported 12 million population, 3.5 million make up the
country's work force. The Malagasy Government establishes two sets of
minimum/maximum wages: one for the agricultural sector and another for the
nonagricultural sector. In 1986, the minimum monthly pay for agricultural
workers was $32.82, and the maximum was $118.88. For nonagricultural
workers, the minimum was $32.24 and the maximum, $116.76. Minimum monthly
wages in the agricultural sector are set at a slightly higher level in order
to compensate for the longer work- week. Within 16 professional categories,
minimum wage levels are determined for up to 14 different grades; in
addition, the minimum wages are adjusted for levels of seniority.
It is estimated that approximately 40 percent of employees are paid at the
minimums in their wage category. Minimum wages have increased regularly
since 1978, but the increases have been lower than inflation over the last 8
A distinguishing feature of the labor force is its very high (53 percent)
literacy rate compared to countries of the African main- land. The Malagasy
place a high premuim on education. The majority of the urban work force is
bilingual (Malagasy-French), and English is widely spoken in the capital.
With 88 percent of the population engaged in mostly small-scale agriculture
or private plots and most of the remaining work force employed by the state,
labor disputes characteristic of Western countries are rare. The Malagasy
labor code is based on French practice, and grants workers in the modern
sector certain rights considerably in excess of those granted in the United
States. Government employees (central government, provincial and local
authorities) totaled to 129,000 in 1985, government employment has been
increasing only marginally in recent years. Nongovernment wage employment,
including public enterprises, was estimated at 251,082 employees in 1985.
Apart from agriculture, the main sectors of employment are the construction
industry, where employment declined further in 1985 (latest year for which
calculated), and the textile and leather industries, which registered small
increases in employment. The government is encouraging the maintenance of
jobs through wage restraint and shorter working hours. In the modern
sector, the laying off of employees is subject to many restrictions and can
only be achieved at a substantial cost to the employer. In the case of
collective layoffs, the enterprise must defend its action before a
interministerial committee, which decides whether the proposed cut in the
labor force is justified.
There are presently nine labor organizations in Madagascar. The leading two
are FISEMA (Federation of Malagasy Labor Unions) which has 60,000 members
and FMM (Confederation of Malagasy Workers); these two are politically
independent and not organized by either craft, industry, or location. The
remaining seven organizations chose to endorse the charter of the 1975
revolution, have taken on a political dimension and are most active around
the times of local elections.
The labor union activity tends to focus on the civil service, particularly
in the capital. Other key sectors are the port activity in Diego Suarez,
where FISEMA is particularly strong; the national railway, and the vanilla
workers, through FMM.
GUIDANCE FOR BUSINESS VISITORS TO MADAGASCAR
A visa is required for entry into Madagascar. U.S. citizens may apply for a
visa at the Emabassy of Madagascar, 2374 Massachusetts Avenue, NW,
Washington, D.C. 20008, Telephone: (202) 265-5525 and 5526; the Malagsy
Republic Mission to the United Nations, Room 404, 801 Second Avenue, New
York, N.Y. 10017, Telephone (212) 986-9491; or from the following honorary
Consuls: Mr. John Huffaker, 123 South Broad Street, Philadelphia, Pa.
19109, Telephone: (215) 893-3067; Mr. Jean-Marie de la Beaujardiere, 867
Garland Drive, Palo Alto, Calif. 94303, Telephone: (415)323-7113.
The cost of a visa is presently $22.50 for a stay of 1 month or less, and
$44.14 for a multi-entry visa. Both fees are subject to change without
notice. short-term (1 month and multi-entry) visas commence on the day of
entry and require 48 hours to process. The applicant must present a valid
U.S. passport, four blue application forms, a letter of recommendation from
a travel agency or ticket office verifying possession of round trip tickets,
or from a business or similar organization willing to assume financial
responsibility for the traveler, and four passport photographs.
This visa provides for a stay of more than 1 month commencing on the day of
entry. Issuance of this visa requires authorization from Antannanarivo and
generally takes 2 months. The applicant must present: a passport valid for
at least 1 year; five yellow individually signed application forms; a letter
of recommendation (usually from the organization sponsoring the trip); a
complete resume, with particular emphasis on previous employment and extra
curricular activities; and five passport photographs. The visa fee is
either $87.44 for a stay of more than 3 months and less than 3 years or
$174.02 for a stay exceeding 3 years.
All documents, except passport, vaccination certificates, checks, and
tickets, submitted along with visa applications cannot be returned to the
applicant under any circumstances. If the passport is to be returned by
mail, a self-addressed, stamped envelope for registered mail must be sent
along with the application.
International Certificate of Vaccination
The International Certificate of Vaccination must be submitted with each
visa application. A yellow fever vaccination is required; a cholera
vaccination is required of travelers coming from an infected area.
Antananarivo: Madagascar Hilton, Relais Aerien D'Ambohibao, Hotel Terminus,
Hotel Colbert, Slect Hotel, Hotel du Lido, Hotel de France, Hotel Agip,
Concordia, Holiday Inn.
Legal and Bank Holidays
The following holidays are observed commercially (holidays with movable
dates are listed parenthetically): January 1, New Year's Day; March 29,
Commemoration of the 1947 Revolt; (Easter Monday); April 30, banks observe a
half day; May 1, Labor Day; (Ascension Thursday); (Whitmonday, day following
Pentecost Sunday); June 25, banks observe a half day; June 26, Independance
Banks close on Saturdays and on the afternoons before legal holidays
subject, however, to possible changes resulting from government decisions.
Working hours for businesses, banks, shops and government offices are 8:00
am to 12:00 noon and from 2:00 pm to 6:00 p.m. from Monday through Friday.
Madagasar's climate is more moderate than that of Washington, D.C. Cottons
from October through April, and average-weight woolens from May through
September are advised, as is rainwear.
Reasonable precautions should be taken in preparing fruits, vegetables, and
meats. Tapwater is not potable. Swimming in fresh or salt water should not
be done without local advice.
Long-distance telephone and telegraph services are available but are not
The capital and the main cities have museums and ruins reflecting
Madagascar's history and dynastic struggles. On the coast are remnants of
early Arab and European explorations. The countryside has terraced rice
fields on the plateaus, plantations on the costs, and rugged mountains and
forests in between.
This file extracted from Dept. of Commerce National Trade Data Bank (NTDB)
CD-ROM SuDoc No. C 1.88:993/12. Processed 12/01/1994 by software developed
by RCM (UM-St. Louis Libraries) / OBR_0000