Why Trade in Madagascar?
Madagascar is the dominant global producer of vanilla and a major supplier of cloves, ylang-ylang, and other essential oils, offering unique and high-quality products sought by global food and cosmetics industries.
The country has a robust and competitive garment manufacturing sector, recognized for its ability to produce high-quality items for major international brands, particularly for the US market under AGOA.
With a long coastline and ideal conditions, Madagascar is a growing source for high-quality, sustainably farmed seafood, especially shrimp and fish, for European and Asian markets.
As a beneficiary of both the US African Growth and Opportunity Act (AGOA) and the EU's Economic Partnership Agreement, Madagascar's key manufactured and agricultural goods enjoy duty-free access to the world's largest consumer markets.
The country offers a significant competitive advantage in terms of labour costs, making it an attractive location for labour-intensive manufacturing and processing operations.
The government is working to improve port infrastructure and streamline customs procedures to facilitate smoother international trade.
Madagascar: A Unique Island of Opportunity for Global Trade
Madagascar's trade policy is built on leveraging preferential access to major global markets while deepening its integration within Africa to foster investment and sustainable growth, guided by the national "Plan Emergence Madagascar" (PEM).
- Global & Bilateral Market Access:
- USA (AGOA): AGOA is a cornerstone of Madagascar's industrial policy, supporting duty-free textile exports to the U.S.
- EU EPA: Duty-free, quota-free access to the EU for key exports like agricultural and fisheries products.
- WTO: Member since 1995, integrated into global trade rules.
- Continental & Regional Integration:
- Dual Bloc Membership: COMESA and SADC – access to multiple value chains.
- AfCFTA: Ratified; a platform to boost value-added exports continentally.
- Investment Promotion:
- EDBM: The Economic Development Board of Madagascar acts as a one-stop shop for investors.
Madagascar boasts an exceptionally diverse resource base. Its strategy focuses on adding value to its world-famous agricultural products while developing its significant potential in textiles, mining, and the blue economy.
Current Trade Snapshot:
- Primary Exports: Vanilla, Nickel, Textiles, Cloves, Shrimp.
- Key Imports: Fuel, machinery, vehicles, rice.
Focus on Manufacturing & Value Addition:
- Gourmet Agriculture & Fine Foods:
- Value-added vanilla and fair trade products.
- Lychees and tropical fruits processed for export.
- Textile & Apparel Industry:
- Major AGOA-exporting sector with growth in higher-value, sustainable garments.
- Mining for the Future:
- Nickel, Cobalt, and Graphite for green transition; focus on responsible extraction and local processing.
- Blue Economy & Aquaculture:
- Over 5,000 km of coastline; expanding sustainable shrimp farming and aquaculture.
As a large island nation, efficient port and customs operations are critical. Madagascar is investing in upgrading its key infrastructure and digitalising its trade processes.
- Port Infrastructure – The Toamasina Hub:
- Handles ~80% of Madagascar’s trade.
- Expansion project to double capacity, deepen berths, and add container terminal.
- Digitalisation of Trade:
- GASYNET: Public-private partnership for e-trade systems.
- Single Window (Tradenet): Digital platform to unify import/export processes.
- Logistical Challenges:
- Modernising internal roads and rail is key for linking production zones to ports.
Madagascar — Foreign Direct Investment (FDI) Statistics
FDI is crucial for Madagascar's economy, with inflows primarily targeting the mining and textile sectors. However, political risk and weak infrastructure continue to constrain investment flows.
$415 M
FDI Inflow (Realized)
Down slightly from the previous year, reflecting a slower post-crisis recovery despite major extractive sector activity.
$4.53 B
FDI Stock
Madagascar holds a large cumulative FDI stock, largely driven by mega-mining investments such as Ambatovy and QMM.
22.61%
Gross Capital Formation
GCF as a share of GDP remains moderate but is trending upward, supported by public infrastructure investment and mining sector capital expenditure.
Mining & Textiles
FDI Concentration
FDI is heavily concentrated in extractives (nickel, ilmenite, graphite) and export-oriented textile manufacturing (EPZ).
Top 5 Investors (By FDI Stock)
- Mauritius
- China
- Netherlands
- France
- Canada
These investors dominate due to large-scale mining operations, export processing zones (EPZs), and long-standing commercial links.
Source: IMF / Lloyds Bank Trade (2023)
Where is the FDI Going? (Top Sectors)
-
Mining & Extractives
Rank 1
Large projects in Nickel (Ambatovy), Ilmenite (QMM), Graphite, and Gold—driven by global demand for critical minerals.
-
Textiles & Apparel (EPZ)
Rank 2
Export-oriented manufacturing benefiting from preferential trade (e.g., AGOA).
-
Tourism
Rank 3
Investments in hotel development, eco-tourism, and hospitality infrastructure.
-
Agri-Business
Rank 4
Vanilla, clove, spice processing, and high-value agro-exports.
-
Infrastructure
Rank 5
Major projects in roads, ports, and energy under the Plan Emergence Madagascar (PEM).
Source: UNCTAD, IMF, Lloyds Bank Trade (2023–2024)
Why Invest in Madagascar
Move beyond primary production and invest in the processing of Madagascar's world-famous agricultural products. Opportunities are vast in vanilla extraction, spice processing, essential oil distillation, and manufacturing of organic and fair-trade certified food products.
Leverage the country's highly competitive labour costs and preferential market access (AGOA/EU) to establish or expand labour-intensive manufacturing, particularly in textiles, garments, and light assembly. The Export Processing Zone (EPZ) model is well-established and successful.
With abundant sunshine, numerous rivers, and significant wind resources, Madagascar has immense potential for investment in solar, hydro, and wind power projects to fuel its development and reduce reliance on fossil fuels.
The country's unique flora and fauna and stunning landscapes offer unparalleled opportunities for investment in sustainable eco-tourism, including luxury lodges, nature resorts, and adventure travel operations.
The government has established a legal framework for investment that includes protections for investors and offers attractive incentives, particularly for export-oriented businesses operating under the EPZ status.
The EDBM acts as a one-stop-shop for investors, providing guidance and support through all stages of the investment process, from registration and licensing to operational start-up.
Investment Sectors in Madagascar
Processing of vanilla, cloves, cocoa, coffee, and essential oils. Development of organic farming and certified products. Canning of fruits and vegetables (lychees, beans).
Vertically integrated textile operations, from cotton spinning to garment manufacturing, focusing on high-volume production for major international brands.
Development and management of eco-lodges and resorts. Investment in conservation-linked tourism, diving operations, and cruise tourism infrastructure.
Development of hydropower plants on numerous rivers. Investment in large-scale solar farms and smaller-scale mini-grids to electrify rural areas.
Assembly of consumer goods. Opportunities in IT and Business Process Outsourcing (BPO), leveraging a French-speaking, cost-competitive workforce.
Investment Incentives and Support(Facilitated by EDBM)
These incentives support regional development, integration, and competitiveness across Southern Africa in alignment with Madagascar's economic cooperation goals.
Export Processing Zone (EPZ) Regime
- Tax Exemptions: Exemption from corporate income tax for the first 15 years (depending on the sector). Exemption from customs duties and taxes on imported equipment and raw materials.
- Free Repatriation: Guaranteed free repatriation of profits and dividends.
- VAT Exemptions: Exemption from VAT for investments in renewable energy and other priority sectors.
- Tax Credits: Tax credits are available for investments that are reinvested.
General Incentives
- Land Access: Free repatriation of profits and dividends is permitted.
Business & Operational Support
- One-Stop Shop: The EDBM provides a single point of contact for investors, streamlining procedures for company incorporation, permits, visas, and land access.
Success Stories
Illustrative examples given the scale of the economy; focus on potential and established niches.
Textile Manufacturing Powerhouse
Several large international textile groups, such as Aquarelle and CIEL Textile, operate multiple large-scale garment factories in Madagascar, employing tens of thousands of people and exporting high-quality apparel to major brands in Europe and the US.
Sustainable Resource Development
Companies in the vanilla and spice sector are increasingly working with local farming cooperatives to implement sustainable and fair-trade practices, ensuring a higher quality supply chain and better returns for local communities while meeting global consumer demand.
High-Value Aquaculture
Aqua-Ferme, a pioneer in Madagascan aquaculture, has become a leading producer and exporter of high-quality shrimp and fish to Europe, demonstrating the commercial success of sustainable, large-scale aquaculture in the country.
Madagascar Investment News
Indian Apparel Firm Expands $60M Textile Facility in Madagascar
Major Investment in Green Minerals: Madagascar’s $300M Nickel Project
EU Development Fund Allocates €120M to Madagascar’s Agrifood Sector
Eco-Tourism Gets a Boost: $110M Invested in Madagascar Hospitality Sector
Technology Facts & Figures
The DRC Technology News
Mobile money is the cornerstone of the fintech sector. Opportunities are expanding into digital payments, micro-credit, and insurance services designed for a largely unbanked population.
Developing digital tools to support the country's high-value agricultural exports. This includes supply chain traceability solutions for vanilla and spices, mobile platforms providing market information to farmers, and precision agriculture tools.
Leveraging a cost-competitive, French-speaking workforce to provide services like customer support, data entry, content moderation, and software development for international clients.
Digital platforms for marketing Madagascar's unique eco-tourism offerings, online booking systems for lodges and tours, and mobile apps to enhance the visitor experience.
Technology for managing and monitoring renewable energy projects (solar, hydro). Development of digital platforms for pay-as-you-go solar solutions in off-grid areas.
Creating localised digital educational content to improve access to quality education, particularly in remote areas.
Leading Technology Hubs & Initiatives in Madagascar
The capital is the undisputed centre of Madagascar's tech scene. It is home to key innovation hubs like Orange Fab, co-working spaces, and the majority of the country's BPO and IT outsourcing companies.
A growing number of local and international companies have established call centres and IT service operations in Madagascar to serve the French market, creating thousands of jobs for skilled young people.
Companies like Orange, Airtel, and Telma are not just connectivity providers but are also the primary drivers of innovation, especially through their mobile money platforms and support for startups via incubators like Orange Fab.
Development partners are actively supporting the government's efforts to create a national digital transformation strategy, focusing on e-government, digital literacy, and creating a more favourable regulatory environment for tech startups.
A grassroots community of entrepreneurs is growing, supported by local tech hubs, startup competitions, and a desire to use technology to solve pressing domestic problems.
Madagascar Technology News
Madagascar Technology News
Madagascar Advances National Digital Strategy with Support from Development Partners
Mobile Money Boom: Madagascar FinTechs Expand Access to Unbanked Population
French-Speaking Talent Drives Madagascar's BPO & IT Outsourcing Growth
CleanTech Startups Power Off-Grid Communities with Pay-As-You-Go Solar
Unlock The Potential Of Madagascar
Madagascar is positioning itself as a dynamic investment destination in the Indian Ocean region, leveraging its strategic geographic location, political will for reform, and rich natural resources. With growing investments in infrastructure, a globally competitive textile industry, an expanding mining sector, and targeted government-led development through the “Plan Emergence Madagascar,” the country presents compelling opportunities in agro-processing, green minerals, apparel manufacturing, aquaculture, and eco-tourism. Its access to major markets through trade agreements, investor-friendly institutions like the EDBM, and a strong commitment to inclusive economic growth make Madagascar an attractive choice for international investors and businesses.