RESTRICTED  
  
WT/TPR/S/318  
9 June 2015  
(15-2981)  Page: 1/118  
Trade Policy Review Body   
 
 TRADE POLICY REVIEW 
REPORT BY THE SECRETARIAT 
MADAGASCAR  
This report, prepared for the third Trade Policy Re view of Madagascar, has been drawn up by the 
WTO Secretariat on its own responsibility. The Se cretariat has, as required by the Agreement 
establishing the Trade Policy Review Mech anism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from Madagascar on its trade 
policies and practices.  Any technical questions arising from this report may be addressed to Jacques Degbelo 
(tel.: 022 739 5583) and Catherine Hennis-Pierre (tel.: 022 739 5640). 
 Document WT/TPR/G/318 contains the policy statement submitted by Madagascar. 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Madagascar. This report was 
drafted in English. WT/TPR/S/318 • Madagascar 
 
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  CONTENTS 
SUMMARY ....................................................................................................................... . 8 
1  ECONOMIC EN VIRONMENT ......................................................................................... 11  
1.1  Main features  of the economy ..................................................................................... 11 
1.2  Recent macroe conomic trends ..................................................................................... 12 
1.3  Trade pe rforma nce .................................................................................................... 15 
1.3.1  Merchandise trade .................................................................................................. 16 
1.3.2  Trade in  services .................................................................................................... 19 
1.4  Foreign investme nt .................................................................................................... 20 
2  TRADE AND INVEST MENT REGIMES ........................................................................... 21  
2.1  General framew ork .................................................................................................... 21 
2.1.1  Trade polic y objectives ............................................................................................ 23 
2.1.2  Institutions respon sible for trad e strate gy .................................................................. 24 
2.1.3  Aid for Trade .......................................................................................................... 25 
2.1.3.1  Assistance from the World Trade Organization (WTO) ................................................ 25 
2.1.3.2  Developments in the Enhanced Integrated Framework ............................................... 27 
2.1.4  Other trade assi stance initiatives .............................................................................. 27 
2.2  Trade agreements  and arrang ements ........................................................................... 28 
2.2.1  World Trade Organization (WTO) ............................................................................... 28 
2.2.2  African Union ......................................................................................................... 30 
2.2.2.1  Common Market for Eastern and Southern Africa (COMESA) ....................................... 30 
2.2.2.2  Southern African De velopment Communi ty (SADC) ................................................... 31 
2.2.2.3  Tripartite Free Trade Area (FTA) ............................................................................. 32 
2.2.2.4  Indian Ocea n Commissio n (IOC) ............................................................................ 32 
2.2.3  Relations with th e European Un ion (EU) ..................................................................... 32 
2.2.4  Relations with the Un ited States of America ................................................................ 34 
2.2.5  Other trade agreem ents and arrangements ................................................................ 34 
2.3  Investme nt regi me .................................................................................................... 35 
2.3.1  Investment und er ordinary law ................................................................................. 36 
2.3.2  Free zones and enterprise s (ZEF s)............................................................................. 36 
2.3.3  Business environment ............................................................................................. 38 
2.3.4  Protection of foreign inve stment ............................................................................... 38 
2.3.5  Measures applied to foreign suppliers ........................................................................ 39 
2.3.6  Land  reform ........................................................................................................... 40 
3  TRADE POLICIES AND PRACTICES BY MEASURE ......................................................... 42  
3.1  Measures directly  affecting imports .............................................................................. 42 
3.1.1  Regi stration ...........................................................................................................  42 
3.1.2  Customs procedures ................................................................................................ 43 
3.1.2.1  Customs cl earing agents ....................................................................................... 43 
3.1.2.2  Electronic single window ....................................................................................... 43 WT/TPR/S/318 • Madagascar 
 
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  3.1.2.3  Import documentation .......................................................................................... 43 
3.1.2.4  Customs valuation and inspection ........................................................................... 44 
3.1.2.5  Risk management and the use of  scanne rs .............................................................. 45 
3.1.3  Dispute settlement and appeals procedures ................................................................ 46 
3.1.4  Levies at the border ................................................................................................ 46 
3.1.4.1  Applie d MFN tariff ................................................................................................ 47 
3.1.4.2  Bindings .............................................................................................................  49 
3.1.4.3  Tariff preferences and rules of origin ....................................................................... 51 
3.1.4.4  Internal import taxes ............................................................................................ 53 
3.1.4.4.1  Tax on interm ittent inco me (IRI) ......................................................................... 53 
3.1.4.4.2  Value-added tax (VAT) ....................................................................................... 53 
3.1.4.4.3  Excise duty and other levies ................................................................................ 53 
3.1.4.5  Duty and tax exem ptions and co ncessions ............................................................... 54 
3.1.5  Prohibitions, quantitative  restrictions and licensing ...................................................... 54 
3.1.6  Contingency measures ............................................................................................ 54 
3.2  Measures directly  affecting exports .............................................................................. 54 
3.2.1  Export prohibitions  and other re strictions ................................................................... 55 
3.2.2  Export procedures .................................................................................................. 55 
3.2.2.1  Reimbursemen t of VAT credits ............................................................................... 55 
3.2.2.2  Exchange rate regime ........................................................................................... 55 
3.2.2.3  Export documentation and controls ......................................................................... 56 
3.2.2.4  Export taxes ........................................................................................................ 57 
3.2.3  Free Zones and Ente rprises (ZEF ) regime ................................................................... 57 
3.3  Measures affecting production and trade ....................................................................... 58 
3.3.1  Standards and technical regulations, including sanitary and phytosanitary 
standards and regulations ................................................................................................. 58 
3.3.1.1  Sanitary and phytosanitary (SPS) measures ............................................................. 59 
3.3.1.2  Measures incumbent on the Quality and Packaging Division ........................................ 62 
3.3.1.3  Measures under the responsibility  of the Madagascar Bureau of Standards ................... 63 
3.3.1.4  Responsibilities of the Legal Metrology Division......................................................... 64 
3.3.1.5  Products regulated by the Ma dagascar Medicinal Pr oducts Agency ............................... 64 
3.3.1.6  Measures incumbent on the National Envi ronment Board ........................................... 65 
3.3.2  Ince ntives .............................................................................................................  66 
3.3.3  Competition and price contro l regime......................................................................... 66 
3.3.4  State-trading, state-owne d enterprises and privatization .............................................. 67 
3.3.5  Government  procurement ........................................................................................ 69 
3.3.6  Protection of intell ectual proper ty rights ..................................................................... 71 
3.3.6.1  Overview ............................................................................................................ 71 
3.3.6.2  Industri al property ............................................................................................... 71 
3.3.6.3  Copyright an d related rights .................................................................................. 72 
3.3.6.4  Protection of indu strial proper ty rights .................................................................... 72 WT/TPR/S/318 • Madagascar 
 
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  4  TRADE POLICIES BY SECTOR ...................................................................................... 74  
4.1  Agriculture .............................................................................................................. . 74 
4.1.1  Agricult ural policy ................................................................................................... 76 
4.1.1.1  Inputs ............................................................................................................... . 76 
4.1.1.2  Trade an d tax me asures........................................................................................ 78 
4.1.1.3  Land reform  and inve stment .................................................................................. 78 
4.1.2  Policy by subsector ................................................................................................. 78 
4.1.2.1  Rice, ca ssava and maize ....................................................................................... 78 
4.1.2.2  Cloves ............................................................................................................... . 79 
4.1.2.3  Vanilla ................................................................................................................ 80 
4.1.2.4  Seed cotton ........................................................................................................ 80 
4.1.2.5  Tobacco .............................................................................................................. 80 
4.1.2.6  Lychees and other horticultural products ................................................................. 81 
4.1.2.7  Cocoa ................................................................................................................. 81 
4.2  Livestock and animal products ..................................................................................... 81 
4.3  Fisheries an d aquaculture ........................................................................................... 83 
4.3.1  Overview ...............................................................................................................  83 
4.3.2  Production by Malagasy companies ............................................................................ 84 
4.3.3  Deep-sea fishing ..................................................................................................... 85 
4.3.4  Conservation and sustainable management of fish eries resources .................................. 86 
4.4  Fore stry ................................................................................................................. .. 87 
4.5  Energy and mining products ........................................................................................ 88 
4.5.1  Upstream petr oleum activities .................................................................................. 89 
4.5.2  Downstream pe troleum activities .............................................................................. 90 
4.5.3  Electricity ............................................................................................................ .. 92 
4.5.3.1  Production .......................................................................................................... 93 
4.5.3.2  Transport, dist ribution and charging ....................................................................... 94 
4.5.4  Water .................................................................................................................. . 94 
4.5.5  Other mini ng activities............................................................................................. 94 
4.5.6  Precious st ones and metals ...................................................................................... 96 
4.6  Manufacturing ........................................................................................................... 98 
4.6.1  Overview of  trade po licy .......................................................................................... 98 
4.6.2  Specific industries ................................................................................................. 10 0 
4.6.2.1  Sugar industry ................................................................................................... 100  
4.6.2.2  Textiles and clothing ........................................................................................... 101  
4.7  Transport services ................................................................................................... 101  
4.7.1  Water transport and port services ........................................................................... 102  
4.7.1.1  Maritime an d river tran sport ................................................................................ 102  
4.7.1.2  Port services ..................................................................................................... 10 3 
4.7.2  Road transpor t ..................................................................................................... 104  WT/TPR/S/318 • Madagascar 
 
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  4.7.3  Rail transpor t ....................................................................................................... 1 05 
4.7.4  Air transport an d airport se rvices ............................................................................ 105  
4.7.4.1  Regulation of air transport ................................................................................... 106  
4.7.4.2  Ai rports  ............................................................................................................ 106 
4.8  Tourism ................................................................................................................. 107 
4.9  Telecommunications an d postal se rvices ..................................................................... 110  
4.9.1  Telecommunications services .................................................................................. 110  
4.9.2  Postal services ..................................................................................................... 11 2 
4.10  Financial services ................................................................................................... 112  
4.10.1  Banking and micr ofinance se rvices ........................................................................ 112  
4.10.2  Insuranc e services .............................................................................................. 113  
4.10.2.1  Regulation ....................................................................................................... 114  
4.11  Professional and business serv ices ........................................................................... 115  
 
CHARTS 
 
Chart 1.1 Official development assistance (ODA ), 2006- 2013 ................................................. 11 
Chart 1.2 Trend of the human development inde x, 2000-2013 ............................................... 12 
Chart 1.3 Maximum medium-term lending rate applied by the banks, 2008-2014 ...................... 15 
Chart 1.4 Structure of mercha ndise trade, 2007 and 2014 ..................................................... 17 
Chart 1.5 Direction of merchandise trade, 2007 and 2014 ...................................................... 18 
Chart 1.6 Trade in services, 2007-2013 ............................................................................... 19 
Chart 1.7 Stock of inward foreig n direct invest ment, 2007 -2013 ............................................. 20 
Chart 2.1 Number of participants in WTO technical assistance and training activities, 
2007-2014 ...................................................................................................................... 26 
Chart 2.2 WTO assistance to Madagascar  by sphere of ac tivity, 2 007-20 13 .............................. 26 
Chart 2.3 Imports from va rious partners , 2007-20 13 ............................................................ 28 
Chart 2.4 Madagascar: Network of  Regional Trade Agreements .............................................. 31 
Chart 2.5 Share of imports from the Europe an Union entering duty free, and simple 
average rates und er the EPA ............................................................................................. 33 
Chart 2.6 United States imports from Madagascar, 2007 and 2013 .......................................... 35 
Chart 3.1 Applied MFN and IEPA tariff rates, by product group (WTO), 2015 ............................. 48 
Chart 3.2 Trend in government procurement volu mes, 2007- 2013 .......................................... 69 
Chart 4.1 Net food producti on per capita , 2004-20 13 ............................................................ 74 
Chart 4.2 Fertiliz er use, 2010-20 12 .................................................................................... 77 
Chart 4.3 Rice production, 2007-2014 ................................................................................. 79 
Chart 4.4 Principal exports of  fisheries prod ucts, 2013 .......................................................... 83 
Chart 4.5 Exports of fisheries products from Madagascar and imports from partner 
countries, 2007-2013  ....................................................................................................... 84 
Chart 4.6 Structure of dies el fuel pric es, 2008-2 014 ............................................................. 90 
Chart 4.7 Structure of electricity production, 2013 ................................................................ 93 WT/TPR/S/318 • Madagascar 
 
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  Chart 4.8 Exports of principal minerals, 2007-2013 ............................................................... 95 
Chart 4.9 Gold expo rts, 2005-2011 .................................................................................... 97 
Chart 4.10 Customs duties by manuf acturing indust ry, 2008 an d 2015 .................................... 99 
Chart 4.11 Trade in textiles  and clothing , 1995-201 3 .......................................................... 101 
Chart 4.12 Logistics perf ormance inde x, 2014  .................................................................... 102  
Chart 4.13 Civil aviation in Madagascar , 2008-20 13 ............................................................ 105  
Chart 4.14 Tourism: number of arrivals and earnings, 2000-2012 ......................................... 108  
 
TABLES 
 
Table 1.1 Basic economic indicators, 2007-2014 ................................................................... 13 
Table 1.2 Balance of payments, 2007-2014  ......................................................................... 16 
Table 2.1 New trade related laws  and regulation s, 2007- 2014 ................................................ 23 
Table 2.2. WTO notifications by Madagascar since 2008 ......................................................... 29 
Table 2.3 Fiscal regulations under the ZEF regime, December 2014 ......................................... 38 
Table 2.4 Operating conditions of enterprises in Madagascar and in neighbouring countries, 
2007 and 20 14 ................................................................................................................ 39 
Table 3.1 Goods subject to a minimum import value, 2014 .................................................... 45 
Table 3.2 Taxation of imports,  by category, 2008, 2010-2 014 ................................................ 47 
Table 3.3 Breakdown of MFN rates, 2008 and 2015 ............................................................... 47 
Table 3.4 Estimated non- ad valorem  duties ......................................................................... 49 
Table 3.5 Tariff lines with applied MFN ta riffs higher than th e bound rates, 2015 ....................... 50 
Table 3.6 Madagascar's list of excluded  products in th e SADC framework ................................. 52 
Table 3.7 Differences in excise duty on local and import ed produc ts, 2014 ............................... 54 
Table 3.8 SPS legislation relating to pr oduction and internat ional trad e, 2014 ........................... 59 
Table 3.9 Some companies with State particip ation operating as of 31 December 2014 .............. 68 
Table 3.10 Thresholds for the award of government procurement contracts through calls 
for tender , 2015  ..............................................................................................................  70 
Table 3.11 Applications filed and industrial property titles issued, 2001-2006 and 
2007-2013 ...................................................................................................................... 72 
Table 4.1 Production of food, industrial and cash crops, 2007-2013 ......................................... 75 
Table 4.2.Principal agricultural exports, 2007-2014 ............................................................... 75 
Table 4.3 Principal agricult ural imports,  2007-2 014 .............................................................. 76 
Table 4.4 Exports of fisheries and aquaculture produc ts, 2007 an d 2013 .................................. 84 
Table 4.5 Aquaculture and fisheries legislation ..................................................................... 85 
Table 4.6 Forestry taxe s on export s, 2015 ........................................................................... 88 
Table 4.7 Terms for granting various petroleum licences ........................................................ 90 
Table 4.8 Electricity producti on, trade and consumption ........................................................ 92 
Table 4.9 Trend in electr icity prices , 2008-2 015 ................................................................... 93 
Table 4.10 Obstacles to the performa nce of industrial  enterp rises ........................................... 99 
Table 4.11 Production, import and export of sugar, 2009-2013 ............................................. 100  WT/TPR/S/318 • Madagascar 
 
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  Table 4.12 Indicators for Madaga scar's principal ports, 2013 ................................................ 103  
Table 4.13 Number of hotels and trav el agencies, 2008 and 2011-2 014 ................................. 108  
Table 4.14 Telecommunication s statistics, 2008-2013  ......................................................... 111  
Table 4.15 Premiums received by insurance compan ies, 2008- 2013 ...................................... 114  
Table 4.16 Information on some regulate d professions in Ma dagascar, 2014 .......................... 115  
 
BOXES 
 
Box 2.1 Land reform and foreig n investment in  agriculture..................................................... 40 
 WT/TPR/S/318 • Madagascar 
 
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  SUMMARY 
1. Madagascar is slowly recovering from the soci opolitical crisis which broke out in 2009 and 
was brought to an end by the December 2013 pres idential elections. The economic upturn which 
began in 2014 has been boosted by the strong performance of rice farming and the extraction and 
subsequent exportation of heavy metals such as nickel, cobalt and titanium. Trade reforms, 
especially in the area of trade facilitation, have also played a part. 
2. Madagascar has experienced far-reaching change s in the structure of its merchandise trade 
since the previous review of its trade policy in  2008. The country has become a major exporter of 
nickel and other minerals and ores. Agrifood export s have become more diversified, reflecting the 
immense wealth of Madagascar’s land and of Ma lagasy know-how. Services exports have also 
grown, representing a market of close to US$1.4 billion, in view of the importance of tourism. 
Exports of made-up clothing, traditionally Madagascar's leading export group, plummeted with the 
end of the preferences granted by the United States under the AGOA, which were reinstated in June 2014. 
3. Overall, economic growth in the period 2009-2014 (averaging less than 1% per year) 
remained well below its potential, as Madagascar emerged from its fourth sociopolitical crisis in 20 years. These recurrent crises have discouraged external partners and plunged the population 
into severe poverty: more than 90% of the country's inhabitants (compared to less than 70% 
in 2005) are living on less than 2 US dollars a day, and many people suffer from malnutrition. Madagascar will be unable to achieve most of th e Millennium Development Goals (MDGs) by 2015, 
even those which had been considered achievable before the most recent crisis. 
4. The crisis and its various consequences (including the rundown state of basic 
infrastructure – transport, energy and water in particular, the worsening of the country’s governance problems and the subsequent drying up of all forms of foreign aid), caused a sharp fall 
in government revenue. With operating expenses re maining high, the public deficits which should 
have ensued were contained by cuts in the investment budget. Even so, the fiscal deficit (including grants) amounted to 3.5% of GDP in May 2015. The Central Bank has contributed, in accordance 
with its statutes, to financing the budget deficit,  and the other domestic banking institutions have 
also made contributions. The resulting crowding -out effect, along with a judicial environment 
inspiring but little confidence (including in regard to the realization of bank guarantees), has been instrumental in maintaining lending rates at very high levels approaching 50%. 
5. Inflation in Madagascar, the main determinants of which include the prices of agricultural 
products (especially food products) on local markets and the prices of imported petroleum products, has been gradually lowered from 10.3% in 2007 to around 6% recently, as a result of 
State subsidies in the form of a parallel preferen tial exchange rate (overvaluation of the national  
currency, the ariary) for imports, together with several successful rice-growing seasons. The import subsidies on petroleum products did, however, contribute to the shrinking of the 
country’s international reserves (equivalent, on average, to 2.9 months of goods and non-factor 
services imports between 2008 and 2013), leading to the reintroduction of the requirement that a 
portion of export earnings be repatriated and converted into ariary. The national currency has 
fluctuated somewhat, with an overall trend towards appreciation of the real effective 
exchange rate and, therefore, towards a less competitive domestic economy. Overall, the sharp 
decline in imports and exports of goods and se rvices, which fell from 80% to less than 70% 
of GDP between 2008 and 2014 despite the growth in mining exports, reflected, among other 
things, a slight dip in the importance of trade for Madagascar. 
6. The mining sector owes its strong performance to major foreign direct investment in 
two mining projects, despite the country’s political instability.  Since the start of operations to 
extract nickel, cobalt, titanium and other heavy metals in 2013, the Malagasy economy has 
become essentially mining-based, and now obtains a third of its export earnings from these products. Nevertheless, the mining sector’s contribution to GDP is just 4%, as the products exported are generally unprocessed, and gold and precious stones are extracted and exported for 
the most part on an informal basis. In any event, at present Madagascar does not have the 
infrastructure needed to produce electricity in the quantity normally required by a mineral processing industry. WT/TPR/S/318 • Madagascar 
 
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  7. Restructuring the electricity operator JIRAMA and upgrading the country’s electricity supply 
had already been identified as priorities in Mada gascar’s previous review, in 2008. These priorities 
remain as relevant as ever, and Madagascar’s per capita electricity consumption is less than one tenth of average African consumption. Although the sector is, de jure , open to competition, the 
fact that electricity selling prices are fixed by th e State at low levels (below production cost) does 
not encourage the entry of new operators. Some economic operators are obliged to lease costly and polluting generators in order to produce their own power. 
8. In the petroleum sector, the State has also intervened in many trade-related areas, such as 
price setting, the suspension of duties and taxes,  and a parallel preferential exchange rate. Some 
services, in particular maritime cabotage of petroleum products  and the provision of aviation fuel, 
are currently in the hands of suppliers holding monopolies. In this connection, the drop  in global 
prices in 2014 should prompt the Government to re instate the “true price level” of these products 
on the domestic market and undertake a reform of the sector. Customs duties on mining and 
energy products are 7% on average, with rates ranging up to 20%. 
9. Madagascar’s agriculture has also been through very difficult years since 2010, with virtually 
zero growth over the review period and a sharp decline in 2013, when the rice and maize harvests 
were destroyed by swarms of locusts, a cyclon e, floods and drought. Unlike a number of African 
LDCs, Madagascar appears to have been unable, over the past decade, to adopt the means needed 
to bring about a real increase in food production; in 2013, net food production per capita had fallen back to its 2004 level. As a result, there has been a substantial increase in imports of most food products since 2008. 
10. The agricultural sector also offers tremendous export potential through a range of niche 
products, such as cloves, vanilla, lychees, honey, foie gras, groundnuts, cocoa paste and unroasted coffee. Madagascar still has vast swathes of potentially arable, but still unexploited land 
on which to develop such production, but the land problem is currently one of the key challenges 
to investment in the country. A wide-ranging reform of land legislation, initiated in 2005, has already led to significant progress in making prop erty ownership more secure. It would be sensible 
to broaden this reform to encompass the conditions of access to real estate by foreigners, which 
might be re-examined and published on the Internet. Although foreigners have access only to titled, state-owned land by means of long leas es, many other texts contain references to the 
"acquisition" of land by foreigners, and some companies change nationality or use nominees for 
this purpose. 
11. Madagascar has substantial fishery and aquaculture potential, and its shrimp and crab 
exports are significant. However, deep-sea fishing in Madagascar’s waters takes place under 
trading conditions which are favourable to foreign companies, in that there are no maximum catch 
limits. Reforms are needed in order to achieve sustainable management of resources while maximizing income from fisheries. Forest management has been affected by serious abuses, and 
the authorities have not yet succeeded in halting exports of rare timbers (palisander and 
rosewood), or of crocodiles and other wild anim als, despite commitments made within CITES. The 
average level of protection of the agricultural sect or (including plant, animal, fisheries and forestry 
production) is 14.1%, slightly higher than in 2008 (13.9%). 
12. Provided that appropriate policies are introduced, the manufacturing sector offers 
exceptional opportunities, especially in the agrifood and handicrafts areas, because of Madagascar’s abundant flora and fauna, its rich waters and the wealth of Malagasy know-how. It is 
highly likely that growth in these areas will la rgely come from small-scale SMEs, as long as the 
State does away with the excessive, complicated and less than transparent taxation which is currently discouraging them from moving out of the informal economy. Industries, especially those 
which are export-oriented, are adversely impacted by the high taxes on businesses and 
cumbersome labour legislation, as well as by the difficulty of obtaining foreign currency to purchase inputs and the high rates of duty on the latter, long delays in the payment of VAT refunds, the high cost of customs controls and quality controls, burdensome export documentation 
requirements and, lastly, the requirement that a portion of earnings be repatriated and converted 
into the national currency. 
13. The Free Zones and Enterprises (ZEF) regime, under which a large number of enterprises 
have registered (in many cases fictitiously), could provide a partial solution to the problem. The 
bulk of industrial investment in Madagascar woul d not have taken place without this regime, which WT/TPR/S/318 • Madagascar 
 
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  offers all manner of generous benefits to investor s that undertake to export, in principle, 95% of 
their production. However, as the regime is being widely abused it is a prime candidate for far-reaching reforms, with a view to better integration in the ordinary law regime. 
14. During the period under review, significant progress was made in the area of trade reforms, 
especially as regards trade facilitation. Madagascar continues to grant at least MFN treatment to all 
its trading partners. It has never been involved as either complainant or defendant in a WTO dispute settlement process. The country has recent ly made remarkable efforts to update its WTO 
notifications; its WTO Reference Centre is operational, and local participation in WTO online 
training courses has increased significantly as a result. Madagascar is party to trade agreements covering around 50 trading partners, including COMESA and the SADC, the most recent of these being the interim Economic Partnership Agreement (EPA) between the EU and the Eastern and 
Southern Africa States, which entered into force in 2012. Madagascar grants duty-free entry to all 
its SADC and COMESA partners, on a non-reciprocal basis. Tariff reduction under the EPA began in January 2014. 
15. There have been a number of tariff reductions, essentially on agricultural inputs, bringing 
Madagascar's simple average applied (mainly ad valorem ) MFN rates down from 13% in 2008 
to 12.2% in 2015. However, less than one third of tariff lines are bound; a few of the applied rates 
exceed the bound level; and less than 6% of the applied tariff is zero-rated. Having lowered its 
customs duties, Madagascar would do well to resist the temptation to generate tax revenue from import and export flows by increasing the rates of other duties, as illustrated by the new excise duty on imported vehicles. Import taxes (levied internally and on entry), which account for more 
than half of tax revenue, still figure prominently in the government budget, and this is thwarting 
attempts to eliminate taxes on international trade. 
16. Madagascar has been striving constantly since 2005 to improve its customs services. Since 
March 2015, minimum import values are reportedly no longer being used for customs valuation 
purposes. Significant progress has been made with the electronic Single Window, and the move towards paperless customs clearance procedures is very close to completion. The MIDAC System, 
an integral part of the Single Window, now allows several of the numerous control institutions 
required to approve import and export transactions to transmit their respective authorizations electronically to the Customs. However, work sti ll remains to be done to ensure that the fees 
assessed actually reflect the services provided. Technical and financial assistance to upgrade the 
legislative and institutional framework for standard s and technical regulations, such as sanitary 
and phytosanitary measures, seems essential, particularly in order to boost Malagasy exports. 
17. Government procurement volumes fell sharply in 2009, probably owing to the sociopolitical 
crisis. Foreign sources of supply accounted for a mere 0.6% of total government procurement in 
2013. Madagascar is neither a member nor an observer of the Plurilateral Agreement on Government Procurement concluded under WTO auspices. The country has nevertheless made 
significant efforts to be transparent by publishing its automated government procurement 
management system on the Internet. 
18. The authorities are aware that any reform of trade policy will be ineffective if it is not 
underpinned by improvements in Madagascar’s sociopolitical system. These would involve, in 
particular, strengthening political and constitutional stability and ensuring the rule of law, 
enhancing the legal protection of persons, strengthening real-estate ownership rights and improving governance, including within the many state-owned enterprises. If these reforms are 
achieved, the Malagasy people, who have seen most of their social and economic indicators 
plummet over the past seven years, w ill have renewed cause for optimism. 
 
 WT/TPR/S/318 • Madagascar 
 
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  1  ECONOMIC ENVIRONMENT 
1.1  Main features of the economy 1.1.  Since the start of operations to extract nickel, cobalt, titanium, and other heavy metals 
in 2013, the Malagasy economy has become essentially mining-based, and now obtains the bulk of 
its export earnings from these products. Madagasc ar also has huge swathes of potentially arable, 
but still unexploited land, and substantial fishery and aquaculture potential. Its unique natural and cultural resources make it an ideal tourist destination for a wide range of travel interests. 
There are also promising opportunities in the agrifood processing industries, based on the unique 
features of certain Malagasy products and the kn ow-how of Madagascar's industries, particularly 
in the fish and marine animal, wood product, va nilla, cocoa, coffee, clove and lychee subsectors. 
1.2.  One of the main constraints on the island's development at the present time, particularly 
in relation to its foreign trade, is the rundown state of its infrastructures, particularly for energy 
supply and road and rail transport. Upgrading thes e infrastructures is one of the most pressing 
challenges in order to reduce transport costs for traded goods and services. The island is also 
vulnerable to cyclones, floods, dr ought and locust invasions (Secti on 4.1), which are all the more 
difficult to combat with dysfunctional infrastructure.
1 
1.3.  Madagascar received less than US$400 million in Official Development Assistance (ODA) 
in 2012 (Chart 1.1), which is equivalent to US$17 per inhabitant and far less than what is needed 
to restore its infrastructure. Roughly one quarter of this total ODA consisted of Aid for Trade — a category of assistance that has fallen away sharply since 2007. As the two areas in which Aid for Trade is concentrated are agriculture, and transport and storage, this assistance naturally 
supports two of the Government's current priorities , namely increasing the supply of food products 
and rebuilding infrastructure. Madagascar's public debt represents around one third of its gross 
domestic product (GDP).
2 
Chart 1.1 Official development assistance (ODA), 2006-2013 
US$ million 
0.01.02.03.04.05.06.07.08.0
 0 200 400 600 8001 0001 200
2006 2007 2008 2009 2010 2011 2012 2013All multilateral  and bilateral donors
All multilateral  and bilateral donors / GDP
Aid for Trade / GDP(%) 
 
Note: US dollars at constant 2012 prices. 
Source: Organisation for Economic Co-opera tion and Development (OECD), viewed at: 
http://www.oecd.org/trade/aft/aid-for-tradestatisticalqueries.htm ; and World Bank, 
World Development Indicators . 
1.4.  In October 2014, the Ministry of the Economy and Planning (MEP) was preparing a National 
Development Plan for the period 2015-2019. The International Monetary Fund (IMF) restored links 
with the Malagasy Government after the elections, in March 2014. This has given access to other foreign partners which announced financing for developing the priority sectors defined in this Plan. 
                                               
1 Deputy Prime Minister's Office responsible for the Economy and Industry (2013). 
2 The risk of Madagascar's government debt was most  recently rated as B-stable in 2007 by Standard 
and Poor's. WT/TPR/S/318 • Madagascar 
 
- 12 - 
 
  The World Bank is supporting the Government in its efforts to formulate growth-generating 
policies, such as an environment that promot es both domestic and foreign private-sector 
development, in particular through a second Private-Sector Development Project and the Integrated Growth Poles Project (IGPP). 
1.5.  Monetary policy is the responsibili ty of the Central Bank of Madagascar (BCM)
3, 
which operates a regime of exchange controls applicable to both current payments and capital transfers abroad.
4 Current transactions are approved by authorized banks, whereas capital 
transfers require approval by the Ministry of Fi nance. Given the shortage of available foreign 
exchange, in August 2014 the Government reintroduced the requirement to convert a portion of export earnings into domestic currency, the ariary (MGA).
5 
1.2  Recent macroeconomic trends 
1.6.  In early 2015, the Malagasy economy was sh owing signs of a tentative recovery, driven by 
an upturn in rice production in 2014, new exports of mining products, and the recovery of foreign 
aid flows, according to the IMF, which conducted its first Article IV Consultation in five years.6 
Since the last WTO review of the country's trade policy in April 2008, the Malagasy economy has 
endured five years of a new sociopolitical crisis. The situation after these five years is serious: 92% of the population is living on less than tw o US dollars a day, and many people suffer from 
malnutrition, particularly in the towns. Madagascar will be unable to achieve most of the 
Millennium Development Goals (MDGs) by 2015, ev en those which had been considered potentially 
achievable before the crisis, such as the targets for reducing child mortality, raising the net school enrolment rate, and eradicating extreme poverty. 
1.7.   Nonetheless, as shown in Chart 1.2, although incomes have collapsed, human development 
has been sustained by the high quality of the country's health system (Section 3.3.1.5) and 
education system, which continued to improve despite the crisis. Consequently, Madagascar's 
human development level is comparable to those of higher-income African countries. In particular, 
the country has abundant, generally high-skilled, labour. 
Chart 1.2 Trend of the human development index, 2000-2013 
0.3500.4000.4500.5000.5500.6000.6500.7000.750
2000 2005 2008 2010 2013HDI ‐ Global HDI ‐ Income
HDI ‐ Health HDI ‐ Education
 
Source: United Nations Developmen t Programme (UNDP), viewed at: http://hdr.undp.org/en/data . 
1.8.   Apart from the uncertainties it has imposed on private investment, this crisis has greatly 
accelerated the deterioration of infrastructures mentioned above, owing to a lack of investment 
and financing from most foreign partners, which have been discouraged by the absence of democracy and good governance (Section 2.1). Th is degradation in turn has severely prejudiced 
the economic environment in general and international trade and investment conditions 
                                               
3 Online information from the BCM, viewed at: http://www.banque-centrale.mg . 
4 IMF (2014b). 
5 Order No. 26612/2014-MFB/SG/DGT/DOF/SSOC of 25 August 2014, making it compulsory to 
surrender foreign exchange on the interbank foreign exchange market. 
6 Online information from the IMF, viewed at: http://www.imf.org/external/np/sec/pr/2015/pr1509.htm . WT/TPR/S/318 • Madagascar 
 
- 13 - 
 
  in particular. Restoring infrastructures and combating severe poverty are the two most urgent 
issues facing the Government in 2015. 
1.9.  Madagascar's economic growth rate collap sed from above 6% in 2007-2008 to an average 
of zero in 2009-2013, partly owing to the steep decline in gross fixed capital formation 
over the period (Table 1.1). Nonetheless, the IMF is forecasting GDP growth of 3% in 2014, 
rising to 5% in 2015. 
Table 1.1 Basic economic indicators, 2007-2014 
 2007  2008  2009  2010  2011 2012 2013 2014a 
Miscellaneous         
Nominal GDP (MGA trillion) 13.8 16.1 16.8 18.3 20.0 21.8 23.5 25.7 
Nominal GDP (US$ billion)  7.3  9.4 8.6 8.7 9.9 9.9 10.6 ..  
Growth rate of GDP (at 1984 prices) 6.2 7.1 -4.1 0.4 1.4 3.0 1.0 3.0 
Population (million) 19  20 20 21 22 22 23 21.7  
Inflation (CPI, variation %) 10.3 9.2 9.0 9.2 9.5 5.8 5.8 6.4 
GDP per capita (US$) 379  472 417 414 456 445 464 491  
 (% of GDP)  
National accounts (at current prices)          
Private final consumption 80.2 73.9 81.9 86.7 87.8 88.0 84.8 .. 
Government final consumption  12.3 10.1 10.0 10.6 10.2 9.6 11.5 ..  
Net exports -21.7  -24.3  -23.6  -18.1  -15.6 -15.0 -12.4 .. 
Exports of goods and services 30.3  26.5 22.4 25.0 26.7 29.0 28.5 ..  
Imports of goods and services 52.1 50.9 46.0 43.0 42.3 44.0 40.9 .. 
Gross fixed capital formation 29.3  40.3 31.7 20.8 17.6 17.3 16.1 ..  
Variation in stocks, nominal 0.0 0.0 0.0 0.0 0.0 0.0 0.0 .. 
GDP by sector of economic activity at 
constant 1984 prices  
Agriculture 15.7 15.5 17.7 17.7 17.3 15.2 13.0 12.7 
Livestock and fishing 14.5  13.9 14.6 13.5 14.0 11.9 11.8 11.8  
Forestry 2.9 2.7 3.7 3.7 3.6 2.8 2.7 2.6 
Mining and quarrying 0.2  0.2 0.2 0.4 0.5 1.1 3.4 4.2  
Energy 1.6 1.6 1.6 1.8 1.7 1.5 1.6 1.6 
Manufacturing 9.5  9.2 8.8 8.9 9.3 8.0 8.0 8.0  
Free zones 2.1 2.0 1.7 1.5 1.5 1.3 1.3 1.3 
Construction and public works  4.8 5.7 4.9 5.0 5.2 4.5 4.6 4.6  
Freight transport 11.2 11.3 10.5 10.6 10.4 9.1 9.2 9.3 
Passenger transport 3.2  3.1 2.6 2.8 2.8 2.6 2.6 2.6  
Ancillary transport services 3.0 3.0 2.7 2.7 2.3 2.1 2.1 2.1 
Telecommunications 2.1  2.4 2.9 3.2 3.3 2.9 2.9 2.9  
Commerce 11.3 11.0 11.8 11.7 11.9 10.2 9.7 9.7 
Banking 2.4  2.3 2.8 3.1 3.1 2.8 2.9 2.9  
Insurance 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 
Business services 13.6  13.9 12.3 12.4 12.2 10.4 10.2 10.0  
Administration 5.1 4.9 4.8 4.9 4.9 4.2 4.2 4.1 
Non-imputed banking services -3.0 -2.9 -3.5 -3.9 -3.9 -3.5 -3.6 -3.6  
Central government financial operations  
Total income and grants ..  15.5 11.5 13.2 11.7 10.8 10.9 12.3  
 Total income .. 12.1 9.9 11.2 9.7 9.6 9.6 10.2 
 Tax revenue ..  11.8 9.4 9.8 9.5 9.1 9.3 10.0  
 Taxes on international trade .. 6.3 4.5 4.5 5.0 4.8 4.0 .. 
 Domestic taxes on goods and services ..  5.5 4.9 5.2 4.6 4.3 5.3 ..  
 Non-tax income .. 0.3 0.5 1.5 0.2 0.5 0.3 .. 
 Grants ..  3.4 1.7 1.9 1.9 1.2 1.3 2.1  
Total expenses and net borrowing .. 17.4 14.1 14.0 14.1 13.4 16.0 14.4 
 Current expenses ..  9.7 9.2 9.0 9.9 10.7 12.9 10.5  
 Capital expenses .. 7.7 4.9 5.0 4.2 2.7 3.1 4.0 
Overall balance (accruals basis)  .. -2.0 -2.5 -0.9 -2.4 -2.6 -5.1 -2.1  
Payments in hand .. 0.2 0.0 0.2 -0.1 0.1 0.2 .. 
Variation in domestic arrears (-  = increase) ..  0.0 0.0 0.0 -0.7 -1.4 -2.2 ..  
Overall balance (including grants, cash basis) .. -2.1 -2.5 -1.1 -1.6 -1.4 -3.1 .. WT/TPR/S/318 • Madagascar 
 
- 14 - 
 
   2007  2008  2009  2010  2011 2012 2013 2014a 
 (% of GDP, unless otherwise indicated) 
External sector         
Exchange rate (MGA/US$) 1,874  1,708  1,956  2,090  2,025 2,195 2,207 2,414  
Real effective exchange rate (period average, 
percentage variation)b .. 10.5 -1.6 -0.6 5.8 -0.2 9.5 .. 
Current account -11.9  -18.7  -21.1  -10.2  -7.0 -7.6 -5.8 ..  
Balance of trade in goods and services -16.0  -23.2  -23.7  -14.2  -11.4 -10.5 -8.6 .. 
 Goods exports, f.o.b. 16.9  13.9 12.3 13.2 14.9 15.3 18.1 ..  
 Goods imports, f.o.b. -30.5  -34.1  -31.8  -25.2  -25.0 -26.5 -26.1 .. 
 Exports of services 13.6  13.8 10.1 11.8 11.9 13.3 11.9 ..  
 Imports of services -16.0  -16.8  -14.2  -14 -13.2 -12.6 -12.6 .. 
Gross official reserves (US$ million)  ..  1,013  965 821 1,171 1,045 763 ..  
 In months of goods and non-factor services 
imports .. 2.5 2.9 2.9 3.7 3.3 2.2 .. 
Public debt ..  31.8 33.4 32.0 32.6 33.8 34.2 35.3  
 Foreign .. 24.5 25.7 24.4 24.3 24.3 22.8 26.0 
 Domestic ..  7.3 7.7 7.6 8.3 9.5 11.4 9.3  
.. Not available. 
a Preliminary estimates. 
b A minus sign indica tes a depreciation. 
Source: IMF Country Report No. 14/181, July 2014. National  Institute of Statistics of Madagascar, viewed at: 
http://www.instat.mg/pdf/inflation-madagascar-2000-2013.pdf . IMF Press Release No. 15/09. 
BCM, Rapport annuel 2009 . African Development Bank, African Statistical Yearbook 2014 , viewed at: 
http://www.afdb.org/fileadmin/up loads/afdb/Documents/Publications/African_Statistical_Yearbook_2
014.pdf . IMF, International Financial Statistics , viewed at: http://elibrary-data.imf.org/  
[September 2014]. 
1.10.  Since 2009, macroeconomic balances have been maintained despite the fall in total 
government income, at the cost of deep cuts in its capital expenditure in particular. 
Inflation, heavily influenced by changes in the prices of agricultural products on local markets and 
by the prices of imported oil products, was held below 10% until 2011, after which it stabilized below 7%, thanks partly to a favourable trend in world market prices, despite the collapse of rice 
production in 2013. 
1.11.  The domestic currency depreciated by just 6% per year on average between 2007 
and 2014, reflecting the central bank's policy until mid-2013 of maintaining a degree of stability in the domestic currency. The existence of a second preferential exchange rate (2,000 MGA/US$) 
agreed upon for imports of petroleum products  was the main factor squeezing Madagascar's 
foreign exchange reserves in 2013. Changes in relative prices led to an appreciation in the exchange rate in real effective terms over this period. Monetary policy instruments include 
compulsory reserve requirements, the level of the policy interest rate (which has been fixed at 
9.5% since 2009, however) and repurchase agreements (repos). 
1.12.  The Government's current expenses were partly financed by a credit line with the BCM from 
late 2013 to March 2014. In 2013, this source of funding (MGA 271 billion) represented about 1% 
of GDP and 10% of total government income. Under its statutes, the BCM cannot lend the 
Government more than 15% of its re venue for the previous fiscal year. 
1.13.  In addition, the sharp decline in imports of goods and services since 2007, combined with 
the start of mining exports, made it possible to reduce the significant deficit on the balance 
of merchandise trade, and hence the current a ccount deficit. Nonetheless, the potentially 
inflationary effect of the new mining revenues remains a challenge. 
1.14.  Two of the main obstacles to Madagascar's economic recovery are the fact that interest 
rates are currently at levels that discourage economic activity (Chart 1.3), and the fact that the banks are lending very little for productive acti vities. The Malagasy banking sector consists 
of 11 banks, all of them foreign owned. Despite the crisis, the banking sector as a whole has not 
reported losses since 2008. The squeezing of both  public and private foreign capital flows has 
reduced bank liquidity and further discouraged lending, thereby pushing up interest rates. WT/TPR/S/318 • Madagascar 
 
- 15 - 
 
  Chart 1.3 Maximum medium-term lending rate applied by the banks, 2008-2014 
(%) 
17.6
16.519.0
18.237.138.644.047.8
48.0
0102030405060
2008 Q3
2008 Q4
2009 Q1
2009 Q22009 Q3
2009 Q4
2010 Q12010 Q2
2010 Q3
2010 Q42011 Q1
2011 Q2
2011 Q32011 Q4
2012 Q1
2012 Q22012 Q3
2012 Q4
2013 Q12013 Q2
2013 Q3
2013 Q42014 Q1
2014 Q2
2014 Q32014 Q4 
Note: Maximum rate of each month. 
Source: BCM. 
1.15.  In 2014, the Government launched a priority plan of action to strengthen public finance 
management, focusing particularly on revenue performance since tax revenue does not exceed 10% of GDP. In particular, the tax on intermittent income (IRI) hitherto levied essentially on 
imports (Section 3.1.4.4), was extended in January 2015 to all persons not registered with the 
Tax Directorate and supplying goods and services to any registered entity, with the latter being responsible for withholding tax at a 5% rate and transferring it to the Government. 
1.16.  Other fiscal problems that need to be resolved as a priority include the burden and 
complexity of tax procedures; tax controls considered excessive, the quasi-systematic penalties that accompany them, and the resulting corruption. These problems damage formal operators 
relatively to those in the informal sector, and encourage them to operate informally. 
The Diagnostic Study performed in 2003 (Section 2.1.3.2) had already revealed that the tax system discourages small-scale businesses from gaining the size at which they would be targeted by the tax authorities, thereby helping to restrict the diversification of the economy. 
1.17.  In addition, certain provisions of the Ge neral Tax Code (CGI) are rendered ambiguous by 
numerous orders, decisions, instructions, notices and explanatory notes issued to assist in their interpretation. This gives rise to subjectivity and hence the need for a large-scale regulatory 
reform. Moreover, according to the authorities, the CGI does not cover para-fiscal charges, which 
are not regulated or subject to specific monitoring. Uncontrolled para-fiscal liabilities of this kind increase corporate costs and charges considerably. 
1.18.  Lastly, the labour market is another sphere where major reforms are needed. 
Measures aimed at increasing agricultural supply and rebuilding infrastructures should rapidly provide employment to the population, which has seen the number of enterprises plummet 
over the last few years, with a concomitant increase in the number of job seekers. 
Nonetheless, labour legislation outside the free zones is burdensome and complex, which can slow 
down hiring and economic recovery. 
1.3  Trade performance 
1.19.  Overall, the share of trade in GDP decl ined from 77% in 2007 to less than 69% in 2013. 
The financial account of Madagascar's balance of payments (Table 1.2) was seriously destabilized by the drying up of foreign financing after 2009; and the overall deficit consumed a large 
proportion of the country's international rese rves, which shrank to less than US$800 million 
in 2013 (Table 1.1). In contrast, the weakening of goods imports and the coming on stream of mining projects caused the trade deficit to narrow. The deficit on the services balance also declined thanks to an increase in tourist arrivals. WT/TPR/S/318 • Madagascar 
 
- 16 - 
 
  Table 1.2 Balance of payments, 2007-2014 
US$ million 
 2007  2008  2009  2010  2011  2012 2013 2014a 
Current transactions -877 -1,762  -1,808  -886 -691 -759 -621 -29  
Goods and services -1,178  -2,186  -2,023  -1,242  -1,125  -1,042 -919 -446 
 Trade balance -1,002  -1,904  -1,667  -1,047  -997 -1,114 -848 -547  
  Exports, f.o.b. 1,238  1,310  1,052  1,149  1,473  1,516 1,923 2,195  
  Imports, f.o.b. -2,240  -3,214  -2,719  -2,196  -2,470  -2,630 -2,771 -2,742  
 Net services -176 -282 -356 -195 -128 72 -71 101 
  Services exports 998  1,296  862 1,030  1,174  1,317 1,263 1,302  
  Services imports -1,174  -1,579  -1,218  -1,226  -1,302  -1,245 -1,334 -1,201  
Investment income -56  -50 -91 -130 -155 -315 -336 -297  
 Income 52 63 34 63 85 34 18 15 
 Payments -108  -113 -126 -193 -241 -349 -354 -311  
  of which public-sector interest -11 -14 -21 -16 -18 -18 -18 -19 
Current transfers 358  474 307 486 589 598 634 715  
 Public administration 46 80 6 61 65 68 68 126 
 Other sectors 312  394 301 426 524 530 566 589  
Capital and financial account 1,172  1,812  1,691  945 867 702 368 63 
Capital account 273  247 76 75 184 120 134 129  
Financial account 899 1,564  1,615  870 683 583 234 -66 
 Direct investment (net) 741  1,136  1,269  766 772 778 551 324  
 Portfolio investment 0 0 0 2 0 0 0 -1 
 Other investment 158  429 -251 102 -89 -195 -318 -389  
Errors and omissions -68 55 93 1 -48 -28 -11 -11 
Overall balance 227 104 -24 59 127 -85 -264 24  
Financing -227 -104 24 -59 -127 85 264 -24 
Net foreign assets (- = increase) -227  -104 24 -59 -127 85 264 -24  
IMF net 12 59 0 -2 -4 -7 -9 27 
Other assets (- = increase) -239  -164 24 -57 -124 91 274 -51  
a Provisional. 
Source: BCM, Rapports annuels 2009 et 2010 ; and information provided by the authorities. 
1.3.1  Merchandise trade 
1.20.  Madagascar experienced far-reaching change s in the structure of its merchandise trade in 
the period 2007-2014. On the export side, the co untry became a major exporter of nickel and 
other minerals and ores (Chart 1.4 and Section 4.5.5). In contrast, exports of clothing and other manufactures, which had traditionally comprised the main group of products exported by Madagascar, plummeted in the wake of the trade sanctions imposed by Madagascar's trading 
partners (Sections 2.2.4 and 4.6.2.2). 
1.21.  Exports of plant products also grew, consis ting of cloves, vanilla, cocoa beans, groundnuts, 
lychees, unroasted coffee, beans and Cape peas. In the case of products produced by the food 
industries, sugar exports grew vigorously thanks to a remarkable increase in export volume and 
a slight improvement in the export price. In contrast, exports of animal products declined in both value and volume terms, reflecting the sharp reduction in shrimp exports (Section 3.3.1). 
1.22.  There were also major changes in the geog raphic structure of Madagascar's export markets 
(Chart 1.5). In the space of six years, the country's export markets have become highly diversified, with the shares accounted for by the European Union (EU) and the United States declining considerably, while those of Middle Eastern and Asian countries, and to a lesser extent 
African countries, have grown. The EU share, in particular, has shrunk from 63% of total Malagasy 
exports in value terms in 2007 to less than 49 % in 2014. Within the EU, France remains the 
leading export market, despite a sharp reduction in its share. Similarly, the United States' share 
of Malagasy exports plummeted from almost 18% to 8.5%. 
1.23.  Within the Southern African Development Community (SADC) (Section 2.2.2.2), the share 
of exports absorbed by Mauritius, which was Madagascar's leading export outlet thanks to the 
substantial volumes of Mauritian direct investment in Madagascar, has dropped from 2.9% to less 
than 1.5% in value terms. In contrast, exports to South Africa have grown almost tenfold to nearly US$80 million. The fastest-growing exports were not only nickel and cobalt, but also clothing, which has lost the North American market. Madagascar has also strongly developed its exports to 
Seychelles and Mozambique. WT/TPR/S/318 • Madagascar 
 
- 17 - 
 
  Chart 1.4 Structure of merchandise trade, 2007 and 2014 
(%) 
2007 2014
(a)    Exports, including re-exports (f.o.b.)
Agriculture  
27.3%Other
1.3Minerals and 
other ores
5.1%Fuels
3.7%
Nickel
(SITC 6831)
27.0%Manufactures
31.6%Clothing
20.6%Textiles
2.5%
Other 
manufactures
5.5%
Cobalt 
(SITC 6898)
3.9%Chemicals
3.0%
Total:   US$1.3 billion Total:   US$2.2 billion
(b)    Imports (c.i.f.)
Fuels
16.6%Agriculture  
15.6%Manufactures
67.0%Chemicals
7.3%Other semi-finished 
products
9.2%
Other
0.4%
Machinery and 
transport equipment
24.5%Textiles
17.1%Other 
manufactures
8.8%
Mining and 
quarrying
0.3%Manufactures
55.3%
Agriculture  
18.9%Chemicals
10.5%Other semi-finished 
products
8.3%
Other 
manufactures
8.8%
Other
0.3%
Fuels
22.1%Mining and 
quarrying
3.4%Textiles
9.7%
Machinery 
and transport 
equipment
18.0%
Total:   US$2.4 billion Total:   US$3.3 billionFuels
4.2%Other
0.3%Textiles
3.2%
Minerals and 
other ores
2.9%Clothing
37.0%Chemicals
1.6%
Agriculture
31.4%Manufactures
61.2%Other 
manufactures
19.4%
 
Source: WTO Secretariat calculations, based on data  from the UNSD Comtrade database (SITC Rev. 3), 
and information provided by the authorities. WT/TPR/S/318 • Madagascar 
 
- 18 - 
 
  Chart 1.5 Direction of merchandise trade, 2007 and 2014 
(%) 
2007 2014
(a)    Exports, including re-exports (f.o.b.)
Other
5.3%Asia 
24.8%Africa 
9.7%
EU (28)
48.4%China
4.5%
Other Asian 
countries
7.6%
United States
8.5%
Other American 
countries
3.2%Japan  
6.4%
Rep. of Korea
6.3%
Total:   US$1.3 billion Total:  US$2.2 billion
(b)    Imports (c.i.f.)
EU (28)
23.1%China  19.1%
Other
1.4%Other 
European 
countries
5.1%Asia
36.1%
Other Asian 
countries
12.2%
America
5.9%India 2.9%
South Africa
5.3%Other African 
countries
5.9%United Arab 
Emirates
0.8%Bahrain
15.2%Other Middle 
Eastern countries
1.1%
Pakistan  2.0%
EU (28)
21.3%China
15.5%
Asia
35.1%
Other
0.6%Other 
European 
countries
2.3%Other Asian 
countries
9.4%
America
5.6%India
6.3%
South Africa
4.6%Other African 
countries
6.1%United Arab 
Emirates
17.4%Bahrain
4.0%Other Middle 
Eastern countries
2.8%
Pakistan  
4.0%
Total:   US$2.4 billion Total:   US$3.3 billionAfrica
6.0%
Other
5.1%Asia 
7.3%
Other Asian 
countries
4.6%EU (28)
62.8%
China   2.0%
Japan 0.7%
United States
17.7%Other American 
countries
1.1%Rep. of Korea
0.04%
 
Source: WTO Secretariat calculations, based on data  from the UNSD Comtrade database, and information 
provided by the authorities. 
1.24.  Madagascar's exports to China attained a level of US$130 million, representing 4.5% 
of the total compared to 2% in 2007. This increa se is largely due to exports of nickel and other 
ores of HS code 2615. Similar growth rates were posted by Malagasy exports of nickel to Japan 
(total exports of US$83 million in 2013), and titanium to both Canada (US$82 million) and 
Viet Nam (US$15 million), while exports to the Re public of Korea (US$92 million in 2013) have 
grown by 138% per year, driven mainly by the nickel trade. WT/TPR/S/318 • Madagascar 
 
- 19 - 
 
  1.25.  On the import side, the steepest fall occurred in machinery and transport equipment, 
reflecting the decline in infrastructure investment, followed by textile inputs. The share of fuels in total imports increased sharply, reflecting the rise in prices in 2008, while agricultural products, particularly rice, almost tripled their shar e during the period (Section 4.1.2.1.). 
1.26.  Imports from the European Union plummeted, while the United Arab Emirates (UAE) 
became one of Madagascar's main suppliers, accounting for over 17% of its imports in value terms in 2014, while China ranks second with a 15.5% share in 2014. The UAE provides Madagascar with 
medium and heavy oils, along with numerous manufactured products. Imports from India have 
also grown significantly in terms of market share,  rising from 2.9% to 6.3% of total Malagasy 
imports, mainly rice. 
1.3.2  Trade in services 
1.27.  Madagascar's services exports represent a ma rket of close to US$1.4 billion, equivalent to 
about 40% of the country's total exports of goods and services, basically reflecting the importance 
of tourism as a key export sector (Chart 1.6). Income from travel (spending by foreign visitors to 
Madagascar) has grown substantially since 2009 (+32% per year on average) to over 
US$600 million, mainly accounted for by hotel and restaurant revenues and thereby illustrating the importance of tourism for the Malagasy economy. 
Chart 1.6 Trade in services, 2007-2013 
US$ million 
 0 200 400 600 8001 0001 2001 400
2007
200820092010201120122013 0 200 400 600 8001 0001 2001 4001 600
2007
2008
2009
20102011
2012
2013
Transport Travel Other commercial services Public administrationExports Imports
 
Note: The category "Other commercial services" includes communication, construction, insurance, 
financial, information technology and information services, royalties and licence fees, other business services, and personal, cultural  and recreational services 
Source: UNCTAD-ITC-WTO Trad e in Services database. 
1.28.  Transport services, which generate about US$400 million in export earnings, represent air 
tickets sold to non-residents by the national airline Air Madagascar (Section 4.7). Exports of other commercial services have flat-lined, while exports of public administration services, namely the expenses of foreign diplomatic personnel in Madagascar, dropped sharply, 
from US$158 million per year to just US$7 million in 2012. Imports of transport services basically 
represent freight expenses. Imports of other comme rcial services are significant, although their 
growth has also stalled. WT/TPR/S/318 • Madagascar 
 
- 20 - 
 
  1.4  Foreign investment 
1.29.  Since 2007, Madagascar has received sustained flows of foreign direct investment (FDI) 
(Chart 1.7), surpassing 10% of GDP in the three years 2009-2011, before easing to 8% thereafter 
until 2013, according to a study on foreign investment in Madagascar published every year by the 
National Institute of Statistics (INSTAT). This situation reflects the undertaking of two large-scale 
investments in the mining sector since 2006 — QIT Madagascar Minerals (QMM) and the Ambatovy project. These two projects have enabled the country to accumulate an FDI stock 
estimated at US$5.45 billion.
7 The other main FDI destinations are financial activities (FDI stock 
of US$586 million), telecommunications (US$457 m illion), manufacturing (including free-zone 
manufacturing) and construction activities, and build ing and public works. The bulk of investment 
undertaken in Madagascar is direct; portfolio investments represented just 0.1% of foreign 
investment entering Madagascar in 2011. 
Chart 1.7 Stock of inward foreign direct investment, 2007-2013 
US$ million 
010203040506070
 01 0002 0003 0004 0005 0006 0007 000
2007 2008 2009 2010 2011 2012 2013Mining and quarrying
Telecommunications
Finance
Manufacturing
Other
FDI (% of GDP, RH scale)(%)
 
Source: Online information from the United Nations Conference on Trade and Development (UNCTAD), 
viewed at: http://unctadstat.unctad.org . [January 2015]. 
1.30.  The four leading investor countries are those whose companies are active in the large 
mining projects: United Kingdom, Canada, Japan, the Republic of Korea and France. According to 
the INSTAT study, the reasons why foreign investors have shown interest in Madagascar include its low wage costs and the quality of its telecommunications infrastructure. Nonetheless, three key 
factors hinder the development of foreign-investment enterprises in Madagascar: the political 
environment, insufficient demand, and financial constraints. For these reasons, the number of jobs in foreign-investment enterprises fell sharply from 80,767 in 2008 to 61,160 in 2011. 
 
 
                                               
7 INSTAT (2012). WT/TPR/S/318 • Madagascar 
 
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  2  TRADE AND INVESTMENT REGIMES 
2.1  General framework 2.1.  The Government, aware that the current soci opolitical and legal system is not conducive to 
international trade and foreign investment in Madagascar, has announced a series of reforms in 
areas regarded as having high priority. These include strengthening political and constitutional 
stability, enhancing the legal protection of persons, improving governance, including that of state-owned enterprises, strengthening real-estat e ownership rights and facilitating the business 
environment, especially by improving access to credit and energy. 
2.2.  A succession of political crises have taken their toll on trade and investment. The outcome of 
the December 2013 presidential election brought an end to Madagascar's most recent political 
crisis, which had lasted almost five years following a coup d'état in March 2009 that caused the 
Constitution to be suspended for the fourth time in 20 years. December 2010 saw the 
establishment of a new Constitution.
1 Among the changes, the minimum age of the President was 
reduced to 35 and the possibility of passing legislation governing foreigners' access to real-estate 
ownership was introduced (Section 2.3.6). 
2.3.  Aside from their economic and social consequences, these political conflicts severely damage 
confidence in the sustainability of government po licies and, therefore, confidence in the country's 
long-term stability, which is vital for investment and trade. Measures envisaged with a view to 
strengthening the country's political and constituti onal stability and improving governance include 
the creation of a High Council for the Defe nce of Democracy and of the Rule of Law.2 
2.4.  The 2010 Constitution introduced no major changes over the 2007 Constitution in respect of 
executive power, which continues to be exercised by the President of the Republic, who is elected 
by direct universal suffrage for a term of five  years, renewable once only. Presidential and 
parliamentary elections were held at the end of October 2013, with a second round of voting on 
23 December 2013; the next elections are scheduled for the end of 2018. Under Articles 63 et seq . 
of the Constitution, the Government implements th e general policy of the State and is responsible 
to the National Assembly. The Prime Minister, who is Head of Government, conducts the general 
policy of the State, initiates legislation and ensures its implementation. The ministries prepare 
draft legislation in their respective areas of competence, for submission to the Council of Ministers. The present Government took office on 25 February 2015, replacing the Government of 18 April 2014. 
2.5.  Legislative power is exercised by the Parliament which should, according to the Constitution, 
consist of two chambers: the Senate and the National Assembly. The deputies in the National Assembly are elected by direct universal suffrage for a five-year term. The latest 
legislative elections took place in December 2013. The Senate, whose responsibilities were to 
include representing the decentralized territorial authorities, was still not in existence in 2014. 
Madagascar is divided into six provinces and 22 re gions, subdivided into communes; in principle, 
they are to move progressively towards administrative and financial autonomy. 
2.6.  To be adopted, draft laws must be approv ed by the National Assembly. The President of the 
Republic promulgates draft laws that have been  passed, after their cons titutionality has been 
reviewed; he signs international treaties and agr eements, and promulgates them after ratification 
by the National Assembly. Under the Constitution  (Articles 137 and 138), the President negotiates 
and ratifies treaties. He is informed of any negotiations for the conclusion of international agreements which are not subject to ratification. Th e ratification or approval of trade agreements, 
treaties or agreements relating to international or ganization, and treaties or agreements that have 
financial implications for the State, including external borrowing, must be authorized by law. The Prime Minister negotiates and signs international agreements that are not subject to ratification. 
2.7.  Duly ratified or approved treaties or agr eements take precedence over laws once they have 
been published, subject in each case to their application by the other party. Ratified international 
                                               
1 Independent National Electoral Commission for Transition, viewed at: http://www.ceni-madagascr.mg . 
2 Two other texts have been adopted: Law No. 2014-043 of 9 January 2015 on the High Court of 
Justice, and Law No. 2014-007 of 12 July 2014 institutin g the Independent National Commission on Human 
Rights. WT/TPR/S/318 • Madagascar 
 
- 22 - 
 
  treaties and agreements are followed in importance by the Constitution, and then laws, 
ordinances3, decrees and orders. All of these texts, apart from orders, are subject to mandatory 
publication in the Official Journal of the Republic  (OJ), which is available only as a printed 
document of which there are currently insufficient copies. The authorities would like technical and 
financial assistance to publish the OJ electronically on the Internet; legislation would be required 
for this purpose. In addition to its own website,  the Ministry of Justice hosts the website of the 
National Commercial and Companies Register ( http://www.rcsmada.com ). The LEGIS Centre in the 
Office of the Prime Minister is also tasked primarily with modernizing the collection, management 
and free dissemination of Madagascar's legislation.4 
2.8.  As a result of the political crisis, until 2014 there was very little legislative activity, including 
in international trade-related areas. The principal new laws and ordinances and new regulations 
affecting trade are listed in Table 2.1. Moreov er, in September 2014 Madagascar acceded to the 
United Nations Convention on Contracts for the International Sale of Goods (UNCITRAL), which is due to enter into force in September 2015. No  reforms were required for this accession. 
Madagascar is not a member of the Organization for the Harmonization of Business Law in Africa 
(OHADA), but its company law framework is based on the OHADA Uniform Act on Commercial Companies.
5 The Business Law Reform Commission, which was established in 1997 under the 
auspices of the Office of the Prime Minister and includes government, civil society and business 
representatives, is tasked with the reform of business law. 
2.9.  In 2014, several reforms were undertaken with a view to strengthening governance and the 
rule of law, intensifying the fight against corruption and reforming various legislative and 
regulatory frameworks. Interministerial coordination could also be enhanced; indeed, as the OECD 
has pointed out6, lack of coordination among government  agencies, especially border agencies, 
is one of the main factors in border delays and overall border costs (Section 3.1.2). 
2.10.  Moreover, it would also be useful to systematically publish draft laws, decrees and orders so 
that interested parties can comment on them prior to  their final enactment. At present, only in the 
case of the Finance Law is submission to Parliament preceded by an informal private sector 
consultation process. Similarly, Madagascar has yet to introduce a permanent structure for 
public-private dialogue and the State relies primar ily on ad hoc consultation mechanisms. In 2015, 
the new Ministry of Industry and Private Sector  Development was tasked with enhancing this 
dialogue. 
2.11.  The authorities are fully aware that weak legal governance poses a serious problem for the 
Malagasy economy7 even though, since 2004, the World Ba nk, the European Union (EU) and the 
African Development Bank (AfDB) have funded a number of projects aimed at governance 
enhancement and institution building. Further external  financial assistance will be required in order 
to provide training and capacity for monitoring the functioning of the courts and combating corruption. According to the Independent Anti -Corruption Bureau (BIANCO), which has been 
responsible for implementing the national anti-corruption strategy since 2004 and lacks the means 
to perform its task, overall there has been no progress to date. 
                                               
3 Pursuant to Article 99 of the 2007 Constitution, the Parliament, by an absolute majority of votes, 
may authorize the President of the Republic to take meas ures by ordinance which normally require legislation. 
Ordinances are adopted by the Council of Ministers and en ter into force upon publication in the Official Journal 
of the Republic. 
4 LEGIS Centre, viewed at: http://www.cnlegis.gov.mg . 
5 Law No. 2003-036 of 30 January 2004, viewed at: 
http://www.edbm.gov.mg/fr/content/download/478/2743/version/1/file/societe_commerciales_loi_n_2003-
036_30012004.doc . 
6 See OECD Trade Facilitation Indicators – Madagascar, viewed at: http://www.oecd.org . 
7 The judiciary consists of the Supreme Court, comp osed of the Court of Cassa tion, the Council of State 
and the Court of Auditors; Courts of appeal and the lower courts attached to them; and the High Court of Justice. Judges are appointed by the Pr esident of the Republic, by decree. On 27 August 2014, the President of 
the Republic opened the Malagasy Bar Association's Nati onal Conference on "The credibility of the judicial 
system for the effective rule of law" , noting the importance of "restoring public confidence in respect of 
impunity, the fight against corruption, illicit wealth and other problems, to contribute to our development". Viewed at:  http://www.presidence.gov.mg/?p=2480 . WT/TPR/S/318 • Madagascar 
 
- 23 - 
 
  Table 2.1 New trade related laws and regulations, 2007-2014 
Field Instrument/text  
Value added tax, excise duties and 
customs border levies General Tax Code (published annually) and annual Finance Laws 
Management of petrol prices Successive half-yearly decrees  
Ozone-depleting substances Decree No.  2007-327 of 24  April 2007 regulating the importation and use of 
ozone-depleting substances 
Single Window for investment  Decree No.  2007-396 of 7  May 2007 repealing Decree No.  2003-938 of 
9 September 2003 establishing the Single Window for investment and the development 
of enterprises (GUIDE) 
Law on Investment (LI) Law No. 2007-036 of 14  January  2008 on investment in Madagasca r 
Free zones and enterprises (ZEFs) Law No. 2007-037 of 14  January  2008 on ZEFs in Madagasca r 
Conditions of concession or other allocation of public property Law No. 2008-013 of 23
 July 2008 on public property; Implementing Decree 
No. 2008-1141 of 1 December 2008 
Rights of persons under public law to 
real estate and movable property 
capable of private ownership Law No. 2008-014 of 23  July 2008 on the private property of the State, of decentralized 
authorities and of legal entities under public law 
Constitution Constitution of the Fourth Republic (11  Decembe r 2010)  
Requests for land >2,500 hectares Circular No.  321/10/MATD/SG/DGSF of 25  Octobe r 2010  
Responsibilities of the Ministry of Livestock Decree No.
 2011-373 of 1  June 2010, amended and supplemented by 
Decree No. 2011-487 of 6 September 2011 establishing the responsibilities of the Ministry of Livestock 
Medical professions, SPS controls  Law No. 2011-002 on the Health Code  
Civil aviation Law No. 2012-011 on the Malagasy Civil Aviation Code  
Food safety and quality  Decree No.  2013-260 of 9  April 2013 on the organization and functioning of the Agency 
for the Monitoring of Food Safety and Quality  
Trade in scrap metal and aluminium and copper waste Decree No.
 2013-428 of 14  Novembe r 2013 suspending the purchase and sale of 
scrap metal and aluminium and copper waste 
Marketing of vanilla Interministerial Order No.  35 255/2013 of 8  Decembe r 2013 regulating the general 
conditions for marketing vanilla 
Regulation of the telecommunications sector Decree No.
 2014-1650 setting out the procedures and measures to be applied by the 
Regulatory Agency for the regulation of the telecommunications sector 
Regulation of telecommunications 
(backbone) Decree No.  2014-1652 establishing the framework for the sharing of 
telecommunications infrastructure 
Regulation of telecommunications networks and services Decree No.
 2014-1651 of 21  Octobe r 2014 regulating telecommunications networks 
and services 
Trade remedies Decree No.  2014-1726 of 19  Decembe r 2014 on the establishment, organization and 
functioning of the National Authority for Trade Remedies 
Cybercrime Law No. 2014-006 of 17  July 2014 on combating cybercrime 
Commercial companies Law No. 2014-010 of 21  August  2014, amending and supplementing Law No. 2003-36 
of 30 January 2004 on commercial companies 
Businesses Law No. 2014-015 of 21  August  2014, amending and supplementing Law No. 2003-38 
of 3 September 2004 on businesses 
Security Law No. 2014-016 of 21  August  2014, amending and supplementing Law No. 2003-041 
of 3 September 2004 on security 
State-invested companies Law No. 2014-014 on state-invested commercial enterprises 
Electronic transactions Law No. 2014-024 of 10  Decembe r 2014 on electronic transactions 
Electronic signature Law No. 2014-025 of 10  Decembe r 2014 on electronic signature 
Confidential data Law No. 014-038 of 9  January  2015 on the protection of personal data 
Copyright and related rights Law No. 2013-015 of 24  February  2014 authorizing the ratification of the WIPO Treaties 
on copyright (WCT) and related rights (WPPT)  
 Decree No.  2014-745 of 4  June 2014 ratifying the WIPO WCT and WPPT Treaties  
 Law No. 2013-016 of 20  February  2014 authorizing the ratification of the 
Rome Convention on related rights 
 Decree No.  2014-746 of 4  June 2014 ratifying the Rome Convention on related rights  
Source:  Malagasy authorities. 
2.1.1  Trade policy objectives 
2.12.  As part of the preparation of the National Development Plan, which was under way in 2015, 
the Ministry of Trade and Consumer Affairs (MCC) id entified a series of operational priorities aimed 
at enabling trade to contribute effectively to ec onomic recovery, while endeavouring to meet the 
Millennium Development Goals (MDG), especially poverty reduction, and continuing to focus on sustainable development and respect for the environment (Section 3.3.1.6).
8 
                                               
8 Viewed at: http://www.commerce.gov.mg . WT/TPR/S/318 • Madagascar 
 
- 24 - 
 
  2.13.  Domestically, the Ministry aims to im prove market fluidity and protect consumers, 
while easing administrative procedures in order to facilitate trade; to improve the provision of information to operators; and to foster accountability among all stakeholders. Internationally, the stated objective is to open up new markets for Madagascar and set up 
specialized export services in the different regi ons, particularly in fields where Madagascar has 
exceptional export capabilities. A concurrent objective is to improve the compliance of Malagasy products with international standards, so that th ey can compete on export markets. The following 
have been identified as priority export sectors: mining, agriculture (including organic), 
fisheries and aquaculture, the textile/clothing and agrifood industries, handicrafts, information and communication technologies (ICT), and tourism. Each ministry is responsible for promoting exports in its own sphere.  
2.1.2  Institutions respon sible for trade strategy 
2.14.  In addition to the MCC, which is responsible for WTO matters and bilateral and regional 
trade agreements, the Ministry in charge of financ e is also heavily involved in the implementation 
of trade policy, particularly through the Customs where tariff and trade facilitation matters are 
concerned. Malagasy Customs, with its partner GasyNet (Section 3.1.2), operates a Single Window for both exports and imports of goods. This electronic platform interconnects those involved in 
customs clearance, and therefore plays a central role  in coordinating import and export processes. 
2.15.  The Economic Development Board of Madagascar (EDBM), another of the entities involved in 
export promotion, is a Single Window for investment which offers promotion and facilitation services, including in the ZEFs (Section 2.3.2) . The International Trade Board of Madagascar 
(ITBM) is a private association dedicated to export promotion and international trade, which was 
set up in 2010 by the principal employers' orga nizations, with the assistance of the French 
Development Agency (AFD). It offers support and capacity building to enterprises. 
Closer integration of the activities of the Cust oms, the EDBM and the ITBM would be beneficial. 
2.16.  Indeed, in March 2015 the ITBM was intending to develop a (third) single window to 
expedite and facilitate administrative formalities at exportation, as a means of boosting exports.
9 
Once operational this single window, like the one operated by Customs (TradeNet, Section 3.1), 
should enable those engaged in export and expo rt production to lodge standardized data and 
documents at a single location. Moreover, there is already a (fourth) one-stop window to facilitate export formalities for mining products (Section 4.5.6).
10 
2.17.  In general, coordination between the different ministries and agencies involved in trade 
matters could usefully be improved, including in the areas of trade facilitation and aid for trade 
(described below, Section 2.1.3). The MCC's leadership of the trade integration strategy could be 
strengthened by better interministerial cooperation and additional technical and financial 
resources. Rapid establishment of a national trade facilitation committee within the MCC could assist in that direction. 
2.18.  No national body is responsible for the evaluation of Madagascar's trade policy, 
but impact assessments may be carried out (for  example, concerning the EPA with the EU). 
The evaluation of trade policy could be a task for the National Trade and Competition Institute, established by decree in 2013.
11 
2.19.  A number of employers' and trade union orga nizations contribute to the elaboration of trade 
policy in Madagascar, again on an ad hoc basi s. They include the Industrial Trade Union 
of Madagascar, the Madagascar Employers Group, the Chamber of Agriculture, the 
Madagascar Enterprises Group and the Group of Free Enterprises and Partners. The Federation 
of Chambers of Commerce and Industry of Madagascar (FCCIM, see also below), a public sector professional body, federates the network of 24 Chambers of Commerce and Industry established 
by a law of 2006.
12 It is funded by a State subsidy and by the local Chambers' subscriptions. 
                                               
9 Viewed at: http://www.itbm.mg . 
10 Interministerial Order No. 12506/2003/MEFB – MEM of 11 August 2003 establishing a Single Window 
for commercial exports of precio us stones, semi-precious stones, precious metals and jewellery. 
11 Viewed at: http://www.commerce.gov.mg/i mages/Infohebdo/textefin1.pdf . 
12 Law No. 2006-029 of 24 November 2006. WT/TPR/S/318 • Madagascar 
 
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  The Chamber of Mines of Madagascar represents  the collective interests of some 20 major 
companies engaged in mineral exploration, production and processing. 
2.1.3  Aid for Trade 2.20.  The trade development assistance received by Madagascar from its external partners has 
decreased significantly since 2007 (Chart 1.1). The MCC and the other institutions tasked with 
developing Madagascar's trade (Customs, EDBM, ITBM, FCCIM, etc.) cooperate on technical assistance and aid for trade with a number of main counterparts, whose actions would benefit from 
more effective coordination. Thus, in October 2014 the WTO, the United Nations Conference on 
Trade and Development (UNCTAD), the Internatio nal Trade Centre (ICC), the United Nations 
Development Programme (UNDP), the World Ba nk, the IMF and the Enhanced Integrated 
Framework were engaged, concurrently, in ac tions aimed at promoting Madagascar's foreign 
t r a d e ;  m u c h  m o r e  s h o u l d  b e  d o n e  i n  t h e  way of integration and exchanges between the 
protagonists of the different projects, perhaps in the framework of the TPR follow-up workshop. 
2.21.  The MCC considers that its ability to coordinate the various assistance programmes 
effectively is hampered by a lack of financial and technical resources.
13 The authorities are looking 
to this third review of the country's trade poli cy to identify priorities and determine their 
trade-related technical assistance needs, with a view to achieving the various objectives 
(Section 2.1.1). 
2.1.3.1  Assistance from the World Trade Organization (WTO) 
2.22.  Assistance to Malagasy officials by the WT O Institute for Training and Technical Cooperation 
averaged around CHF 250,000 per year during the period 2007-2013. The number of officials 
receiving WTO training fell sharply after 2010, with the total number of participants dropping from 
an average of around 160 per year in 2007-2010 to an average of 80 in 2011-2013. Training 
in which the trainers are physically present accounted for most of the decrease, with online course 
attendance remaining stable in 2007-2012, averaging around 20 participants per year, followed by 
a sharp increase to 50 participants in 2013 and then 171 in 2014, which testifies to the usefulness of WTO courses to Malagasy participants despite the crises and the lack of financial resources for 
physical attendance at courses (Chart 2.1.). This increase also reflects the revitalization 
of Madagascar's WTO Reference Centre in 2013 (see below). 
2.23.  Irrespective of the mode of training (that is, online or involving physical attendance), 
general courses on the WTO continued to form the bu lk of the activities in which Malagasy officials 
participated. Three topics stand out as having been the subject of several specific training courses. 
They are: intellectual property rights (Section  3.3.6), WTO rules, and services (Chart 2.2). 
                                               
13 The Ministry had a total budget of US$4.2 millio n in 2014, including an international contribution 
of US$2.4 million. WT/TPR/S/318 • Madagascar 
 
- 26 - 
 
  Chart 2.1 Number of participants in WTO te chnical assistance and training activities, 
2007-2014 
16
1923
2615
1950171
122174
99154
5165
47
9
020406080100120140160180
2007
2008
2009
2010
2011
2012
20132014Number of participants
Online coursesCourses involving physical 
attendance
 
Source: WTO Secretariat. 
Chart 2.2 WTO assistance to Madaga scar by sphere of activity, 2007-2013  
010203040506070
Agriculture
NAMA
Environment
Development
Dispute Settlement
General
RTA
Rules
Services
SPS
TBT
Trade Facilitation
TPR
TRIPSShare of number of participants (Total: 880)
Share of number of activities (Total: 175)
Share of total cost (CHF 1.7 million)%
 
Source: WTO Secretariat. 
2.24.  Another WTO technical assistance initiati ve aimed at fostering trade was the setting up 
of a Reference Centre in the MCC's premises. The Reference Centre facilities are well maintained, 
well used and accessible to the public, which can thus obtain timely information about the WTO. In 2013 the WTO provided new computer equipment for the Reference Centre, and its coordinator received training at a symposium in Geneva. WT/TPR/S/318 • Madagascar 
 
- 27 - 
 
  2.1.3.2  Developments in the Enhanced Integrated Framework 
2.25.  Madagascar was one of three pilot countries selected in 2001 for the implementation of the 
"Integrated Framework", a trade-related assistance programme aimed specifically at least developed countries.
14 Almost 15 years on, it has to be acknowledged that this has produced little 
in the way of tangible results. A Diagnostic Trade Integration Study (DTIS) which looked 
at mainstreaming trade in the national econom ic development strategy was carried out in 
2001-2003, with the assistance of the six participating agencies (WTO, WB, IMF, UNCTAD, ITC and 
UNDP). The DTIS included a "Matrix of Priority Actions", which was validated in July 2003 after the 
study process had been suspended in 2002 becaus e of another political crisis. The 2003 DTIS 
listed 52 areas for action. Two programmes, one on capacity building and the other on export development support, were then delivered for Madagascar. 
2.26.  In 2005, after the Integrated Framework had been "enhanced" (EIF) by additional funding 
from international organizations or donor countries so that the needs identified in the DTIS could be met, two funding windows were established: Tier 1 is aimed at supporting capacity building for 
national civil servants, while Tier 2 is for priori ty projects to build trade-related and supply-side 
capacities. A first review of the Action Matrix in 2008 showed that only 60% of the activities identified had been carried out, and even thes e had been completed late. As the evaluation 
was activity-based as opposed to results-based, this percentage may have significantly 
over-represented the impact of the activities. Among the principal reasons for this low level 
of implementation were lack of capacity with in the MCC, and the provision of only limited 
support by external partners because of the political crisis. Madagascar has not yet submitted 
any Tier 2 projects. 
2.27.  At the end of 2014, funding was available again for an update of the initial Study and 
a review of progress in the area of trade reform s. The Government therefore requested that the 
DTIS be reviewed and reached agreement with  the World Bank, as implementing agency, 
on general terms of reference for this exercise. It should be noted that the TPR follow-up workshops could be of great assistance for the DTIS in particular. 
2.1.4  Other trade assistance initiatives 
2.28.  The ITC, for its part, has recently turned its attention to non-tariff barriers affecting 
import-export enterprises in Madagascar.
15 It is also helping the Malagasy authorities to mobilize 
resources for the establishment of the ITBM's Sing le Window for exports (see above). In addition, 
it has financed information activities on the be nefits of the WTO Agreement on Trade Facilitation 
for the private sector, and is supporting Madagascar with the formulation of Category C projects to 
be submitted to donors for possible funding.16 The ITC is also working with the MCC on a Trade 
and Export Development Support Project which would be financed by the UN International Fund for 
Agricultural Development (IFAD). This US$9.4 m illion programme would focus on developing the 
export competitiveness of non-traditional subsectors such as essential oils, organic cocoa, pepper, 
Cape peas and organic vanilla. 
2.29.  IFAD has also set up the Support Programme for the Rural Microenterprise Poles and 
Regional Economies (PROSPERER) in Madagascar.17 The project involves encouraging producers to 
enter into formal contracts with market operators, so that they can become better integrated into 
subsectors offering high potential and enjoy better market access. PROSPERER has made it 
possible to organize certain agricultural subsectors, in partnership with the FCCIM which has received resources enabling it to offer services  tailored to the needs of rural enterprises. 
2.30.  The World Bank also has a trade-related technical assistance project – the Integrated 
Growth Poles Project (IGPP).
18 This project aims, inter alia , to construct and rehabilitate critical 
                                               
14 Enhanced Integrated Framework website: http://enhancedif.org/en . 
15 ITC (2014). 
16 Category C measures are provisions of the Trade Fa cilitation Agreement that developing countries will 
need external technical assistance to implement. 
17 Viewed at: 
http://operations.ifad.org/web/ifad/operations/country/project/tags/Madagascar/1401/project_overview . 
18 Viewed at: http://www.worldbank.org/projects/P110405/ mg-integrated-growth-poles-additional-
financing-credit?lang=en . WT/TPR/S/318 • Madagascar 
 
- 28 - 
 
  infrastructure essential for sustained economic activity in the tourism, manufacturing, 
agri-business and mining sectors, and to put in place appropriate incentive measures to achieve rapid, equitable and sustainable growth. The IGPP is classed as Aid for Trade, in that it helps to boost agricultural and manufacturing exports, as well as promoting tourism. As for the AFD, 
it is pursuing its Trade Capacity Building Programme (PRCC), which assists export enterprises by: 
(i) strengthening their internal business capabilities; (ii) improving market research; and (iii) promoting Madagascar's image on certain foreign markets.
19 
2.2  Trade agreements and arrangements 
2.31.  Madagascar is party to a number of trade agreements and arrangements as described in 
this section. As can be seen from Chart 2.3, the granting of tariff preferen ces to members of these 
agreements has not been followed by an increase  in the Malagasy import market share of the 
preferential partners concerned, while the EU's  share of imports into Madagascar contracted 
sharply during the period 2008-2013 (Section 1.3). 
Chart 2.3 Imports from various partners, 2007-2013  
05101520253035404550
 0 100 200 300 400 500 600 700 800 9001 000
2007 2008 2009 2010 2011 2012 2013EU (28)
SADC
COMESA
IOC
Group of EU(28), SADC, COMESA, and IOC (% of total)
UAE (% of total)
China (% of total)(US$ million)(% of total imports)
 
Note: Certain countries belong to more than one grouping. 
Source: WTO Secretariat calculations, based on data from the UNSD Comtrade database. 
2.2.1  World Trade Organization (WTO) 
2.32.  The previous review of Madagascar's trade policy (its second TPR) took place in April 2008. 
Madagascar signed the Marrakesh Agreement on 15 April 1994, and became a WTO Member on 
17 November 1995 following ratification by its Parliament.20 Before that Madagascar had been a 
member of the GATT since September 1963, that is , three years after independence from France 
in 1960. It is recognized as a "least developed country" (LDC). It is not a signatory to any plurilateral agreement or to any of the protoc ols and agreements concluded under WTO auspices, 
with the exception of the Protocol of Amendment to insert the Trade Facilitation Agreement into 
Annex 1A of the WTO Agreement, adopted in November 2014.
21 As an LDC, Madagascar will have 
one year to ratify the Protocol (and notify its Category A, B and C measures) after its entry into 
force, which will occur when 106 WTO Members have ratified it. 
2.33.  Madagascar grants at least most-favoured-nation (MFN) treatment to all its trading 
partners. Its GATT and, subsequently, WTO tariff bindings are contained in Schedule LI22 for goods 
                                               
19 Viewed at: http://www.diplomatie.gouv.fr/fr/IMG/pdf/OMD_8_PRCC_Madagascar.pdf . 
20 Law No. 95-008 of 10 July 1995 authorizing ratification of the Agreement Establishing the WTO 
(OJ No. 2312 of 24 July 1995); and Decree No. 95-555 of 22  August 1995 ratifying the Agreement Establishing 
the WTO (OJ No. 2321 of 4 September 1995, p. 2355). 
21 Viewed at: https://www.wto.org/english/tratop_ e/tradfa_e/tradfa_agreement_e.htm . 
22 WTO document G/MA/TAR/RS/362 (including Table containing bound duties), viewed at: 
http://docsonline.wto.org/imrd/gen_redirectSearch.asp?query=(@meta_Symbol+%20WT/Let/988) . WT/TPR/S/318 • Madagascar 
 
- 29 - 
 
  (Section 3.1.4.2). Its commitments on trade in services are specified in document GATS/SC/51. 
Between 1995 and 2005, Madagascar participated as a third party in four WTO dispute settlement proceedings, concerning export subsidies on sugar and trade in bananas; it has not participated in 
any proceedings since that time.
23 Since 2010, Madagascar has done a great deal of work on 
updating its WTO notifications (Table 2.2), including its Integrated Database (IDB) notifications. 
Table 2.2. WTO notification s by Madagascar since 2008 
Agreement and  
notification date WTO document Content 
Import Licensing Procedures (Article 7.3) 
19 May 2011 G/LIC/N/3/MDG/6  No changes to the import licensing systems  
1 April 2009 G/LIC/N/3/MDG/4  No changes to the impo rt licensing systems notified in document 
G/LIC/N/3/MDG/3 of 19 September 2008 
26 January 2010 G/LIC/N/3/MDG/5  Description of new procedures  
23 Septembe r 2014 G/LIC/N/1/MDG/3  No change  
Subsidies and Countervailing Measures  (Article XVI:1 of the GATT 1994  and Article 25)  
22 June 2010 G/SCM/N/186/MDG  No prescribed measures  
7 Octobe r 2013-23 March 2015  G/SCM/N/220/MDG  
G/SCM/N/253/MDG 
G/SCM/N/202/MDG No prescribed measures  
Regional Trade Agreements (Art icle XXIV:7(a) of the GATT 1994)  
10 February 2012 WT/REG307/N/1  Establishment of a free trade area for trade in goods  
Trade-Related Aspects of Intelle ctual Property Rights (Article  63.2)  
15 February 2011 IP/N/1/MDG/1 Legislation on industrial property protection in Madagasca r 
17 February 2011 IP/N/1/MDG/I/2  Industrial property protection regime in Madagasca r 
IP/N/1/MDG/C/2  
IP/N/1/MDG/E/2 Decree No.  98-434 of 16  June 1998 on the status and functioning of 
the Malagasy Copyright Office (OMDA) 
IP/N/1/MDG/E/1  Decree No.  92-994 establishing and organizing the Malagasy 
Industrial Property Office (OMAPI) 
IP/N/1/MDG/C/3  
IP/N/1/MDG/E/3 Decree No.  98-435 of 16  June 1998 establishing general regulations 
on the collection of fees on copyright and related rights 
IP/N/1/MDG/C/4  
IP/N/1/MDG/E/4 Interministerial Order No.  12226/2006 establishing measures to more 
effectively combat counterfeiting of literary and artistic works 
IP/N/1/MDG/I/1  Ordinance No.  89-019 establishing an industrial property protection 
regime in the Democratic Republic of Madagascar 
IP/N/1/MDG/C/1  Law No.  94-036 on literary and artistic property 
Anti-Dumping Practices (Articles 16.4 and 16.5)  
26 February 2010 G/ADP/N/193/MDG  No prescribed measures  
Agreement on Agriculture (Articles 10 and 18.2)  
19 Septembe r 2011 G/AG/N/MDG/3  No export subsidies in the years 2000-2010 
7 July 2014 G/AG/N/MDG/4  Domestic support commitments in the years 2000-2012 
Sanitary and Phytosanitary Measures 
11 April 2008 G/SPS/N/MDG/2  Draft Food Law  
11 April 2008 G/SPS/N/MDG/1  Draft decree regulating the veterinary  profession, livestock sector 
activities, animal health requirements and the various penalties under Law No. 2006-030 of 24 November 2006 on livestock farming in 
Madagascar 
9 April 2010 G/SPS/N/MDG/3  Order No.  3669/2010 of 1  March  2010 establishing varroasis control 
measures  
23 April 2010 G/SPS/N/MDG/9  Order laying down specific hygiene rules for food of animal origin  
23 April 2010 G/SPS/N/MDG/8  Order laying down specific rules for the organization of official controls 
on products of animal origin intended for human consumption 
(excluding fisheries and aquaculture products) 
23 April 2010 G/SPS/N/MDG/6  Order laying down the sanitary control measures for certain 
substances and residues in honey and honey products  
9 April 2010 G/SPS/N/MDG/4  Order laying  down the health requirements for crustaceans and 
products thereof 
23 April 2010 G/SPS/N/MDG/7  Order on the hygiene of foodstuffs  
13 April 2010 G/SPS/N/MDG/5  Interministerial Order regulating the conditions for the granting of 
approval to and the sanitary control of establishments engaged in the 
treatment and marketing of guano 
31 Octobe r 2011 G/SPS/N/MDG/11  Ministerial Order No.  29179/2011 of 11  Octobe r 2011 designating the 
authority responsible for the phytosanitary inspection and certi ﬁcation 
of plants for human consumption intended for export 
31 Octobe r 2011 G/SPS/N/MDG/10  Interministerial Order No.  25482/2011 of 29 Septembe r 2011 
establishing sanitary control measures for certain substances and 
residues found in plants and plant products for human consumption 
intended for export 
Source: WTO Secretariat. 
                                               
23 European Communities - Regime for the Importation, Sale and Distribution of Bananas  (DS27); 
European Communities - Ex port Subsidies on Sugar , DS265, DS266 and DS283. WT/TPR/S/318 • Madagascar 
 
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  2.2.2  African Union 
2.34.  Madagascar is a founding member of the African Union (AU).24 Eventually, the AU aims to 
be an economic and monetary union. To this end, the African Economic Community (AEC) was founded in June 1991 under the terms of the Treaty of  Abuja, which provides for the creation of an 
African common market in six stages spread over 34 years, i.e., up to 2025. The integration 
process is based on the coordination and harmonization of tariff and non-tariff measures between several Regional Economic Communities (RECs), with a view to establishing firstly, 
a continent-wide customs union, and subsequently an economic area. 
2.35.   Madagascar belongs to two of the eigh t RECs recognized by the AU, namely the Common 
Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). In order to rectify the problems posed by this dual membership, 
the AU recommended that these two RECs and the East African Community (EAC) (Chart 2.4) 
establish a Tripartite Free Trade Area (FTA) in December 2014 (see below). 
2.2.2.1  Common Market for Easter n and Southern Africa (COMESA)
25 
2.36.  Although Madagascar is one of the foundin g members of the Treaty establishing COMESA 
(signed in 1993), having ratified the Treaty in July 1995, its name does not appear in the list of countries contained in the 1995 notification made to the WTO under the Enabling Clause of 
the GATT 1994.
26 It is therefore desirable that Madagascar notify the WTO of its membership 
of the Treaty. 
2.37.  The COMESA tariff reduction programme began on 1 November 2000. Its guiding 
principle is the exchange of preferences on originating products on a reciprocal basis. 
Nevertheless, Madagascar grants duty-free market access to all COMESA members without 
a reciprocity requirement. The COMESA member countries apply the Harmonized System (HS) 2002, the Automated System for Customs Data (ASYCUDA) and EUROTRACE. 
2.38.  Moreover, COMESA has a draft Common Extern al Tariff (CET), the rates being 0% for raw 
materials and capital goods, 10% for intermediate products and 25% for finished goods. In March 2015, Madagascar had submitted three provisional lists to the COMESA Secretariat in this 
context: List I for products whose MFN rates are already aligned on the CET; List II for sensitive 
products whose rates will take longer than the transition period to align (no more than 30% of national tariff lines); and List IIIa for products not covered by the CET. 
2.39.  The COMESA Fund provided for by the Treaty was adopted in 2002; it consists 
of two windows: the COMESA Adjustment Facility (CAF) and the COMESA Infrastructure Fund 
(CIF). The CAF is financed by the European Union through the Regional Integration Support Mechanism. The Funds are intended to assist economies with the adjustment process 
during the implementation of regional integration programmes. 
                                               
24 The Charter establishing the Organization of African Unity was signed on 25 May 1963. 
The Constitutive Act of the AU was adopted at the summit held in July 2000 in Lomé (Togo). 
25 Viewed at: http://www.comesa.int . 
26 WTO document WT/COMTD/N/3 of 29 June 1995, viewed at: 
http://rtais.wto.org/UI/PublicShowMemberRTAIDCard.aspx?rtaid=121 . WT/TPR/S/318 • Madagascar 
 
- 31 - 
 
  Chart 2.4 Madagascar: Network of Regional Trade Agreements  
Madagascar 
South Africa  Libya  
Sudan  
Angola 
Namibia  
Lesotho  Swaziland Malawi  
Botswana  Zimbabwe  Zambia  Rwanda  
Burundi  
Comoros Seychelles 
Tanzania  Kenya  Uganda  
Dem. Rep. 
of Congo Egypt 
Eritrea 
Djibouti 
Ethiopia 
Southern African Customs Union 
(SACU ) East African Community (EAC) Southern African Development 
Community (SADC) Common Market for Eastern and Southern Africa (COMESA) 
Mauritius Mozambique 
 
Source: WTO Secretariat. 
2.40.  The Eastern and Southern African Trade and Development Bank finances foreign trade 
transactions and projects by public or private investors resident in one of the member States.27 
It is currently shifting its focus towards activities aimed at improving the efficiency of clearing operations, to complement the services offere d by commercial banks; providing traders with 
political risk insurance for their intra-regional trade; and facilitating the harmonization of monetary 
and fiscal policy within the region. 
2.2.2.2  Southern African Development Community (SADC)
28 
2.41.  Madagascar has been a member of the SADC (established in 1992) since 18 August 2005, 
but its name does not appear on the notification  made to the WTO by Tanzania. This agreement 
was notified to the WTO in May 2007 pursuant to Article XXIV of the GATT 1994, and was 
examined by Members in May 2007.29 It would be helpful if the authorities could notify the 
Secretariat accordingly.30 At the SADC Extraordinary Summit held in Swaziland in 2009, 
Madagascar was suspended from the Organization's activities because of its ongoing political crisis and did not take part in any negotiating meetings until 2014. Since then, Madagascar has resumed 
its participation in the various SADC meetings. 
2.42.  Within the FTA, trade in goods considered  as SADC-originating has been completely duty 
free since 2012, with a few exceptions (Section 3.1.4.4). The institutional framework of the SADC 
is comprised of the Conference of Heads of St ate and Government, the Council of Ministers, 
the Secretariat, headquartered in Gaborone (Botswana), a Court, established in Windhoek, and technical committees (for example, the Council of Ministers responsible for trade matters 
(CMT)). The SADC Protocol on Trade (and the amendment thereto), applicable 
                                               
27 Not all COMESA members are members of the PT A Bank. Equally, countries that are not COMESA 
members may join the PTA Bank. 
28 SADC web portal: http://www.sadc.int . 
29 WTO document WT/REG176/N/1/Rev.1 of 27 August 2004, see the RTA database at: 
http://rtais.wto.org/UI/PublicShowRTAIDCard.aspx?rtaid=45 . 
30 By sending an email to: rta@wto.org . WT/TPR/S/318 • Madagascar 
 
- 32 - 
 
  from 1 September 2000, progressively established an FTA from 2008 onwards31; Madagascar 
deposited its instruments of ratification on 21 February 2006.32 
2.2.2.3  Tripartite Free Trade Area (FTA) 2.43.  In 2008, the COMESA, EAC and SADC Heads of State and Government ordered the 
expeditious establishment of a Tripartite FTA. They  also agreed that the Tripartite FTA would build 
upon the acquis and the tariff liberalization achieved within the FTA of each REC. At the Second Tripartite Summit, held in Johannesburg in June 2011, the negotiating principles and 
structures were endorsed, together with a roadmap for establishing the Tripartite FTA and 
a Declaration launching the negotiations. The Declaration was not signed by Madagascar, pending an impact assessment of its accession to this new organization. 
2.2.2.4  Indian Ocean Commission (IOC) 
2.44.  Madagascar is a founding member of the IOC, which was established in 1984 by the Victoria 
Agreement with a Secretariat based in Quatre Bornes (Mauritius). The IOC has five members: Comoros, Madagascar, Mauritius, Réunion (France) and Seychelles. Almost 70% of the IOC's 
activities are funded by the EU, through the European Development Fund (EDF).
33 
2.2.3  Relations with the European Union (EU) 2.45.  Madagascar is one of the 79 countries making up the African, Caribbean and Pacific Group 
of States (ACP), with which the EU concluded the Cotonou Agreement in June 2000.
34 
As from 1 January 2008, the trade provisions co ntained in Chapter II of this Agreement were 
replaced by those contained in European Council Regulation No. 1528/2007 20 December 2007.35 
This Regulation applies to products originating in Madagascar, as in all the ACP countries or 
regions (listed in Annex I to the Regulation) which have signed (or "initialled") an Economic 
Partnership Agreement (EPA) with the EU. 
2.46.  An interim EPA (IEPA) of this kind was concluded in August 2009 between the EU 
and four countries of the Eastern and Southern Africa (ESA) group, namely Madagascar, 
Mauritius, Seychelles and Zimbabwe.36 The WTO notification was made on 9 February 2012.37 
The IEPA entered into force on 14 May 2012.38 It deals with three areas: market access, fisheries, 
and development cooperation.39 
2.47.  One of the main declared objectives of th is Agreement is to promote economic cooperation 
and good governance in the ESA region (Article 2(b)).40 Another objective is "to establish an 
                                               
31 Implementation of the SADC Protocol on Trade commenced on 1 September 2000. The SADC 
members that have acceded to the Protocol are: the five members of the Southe rn African Customs Union 
(SACU: Botswana, Lesotho, Namibia, South Africa an d Swaziland), Angola, Madagascar, Malawi, Mauritius, 
Mozambique, Tanzania, Zambia and Zimbabwe. 
32 According to the authorities, Madagascar has sign ed and ratified the Protocol on Immunities and 
Privileges, the Protocol on the Tribunal, the Protocol on  Education and Training, the Protocol on Health and the 
Protocol Against Corruption. 
33 Online information from the IOC, viewed at: http://www.coi-ioc.org . 
34 The Agreement was signed on 23 June 2000 in Cotono u (Benin), and officially entered into force on 
1 April 2003 after its ratification. The Agreement replaced the Lomé Convention, in effect since 1975, whose fourth extension expired at the end of February 2000. 
35 Council Regulation (EC) No. 1528/2007of 20 December  2007 applying the arrangements for products 
originating in certain ACP states provided for in agreements establishing, or leading to the establishment of, Economic Partnership Agreements. Viewed at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:348:0001:0154:FR:PDF . 
36 Malagasy Customs, Interim Economic Pa rtnership Agreement (IEPA), viewed at: 
http://www.douanes.gov.mg/?page_id=569  [11 June 2014]. 
37 WTO document WT/REG307/N/1, viewed at: 
http://rtais.wto.org/UI/PublicShowMemberRTAIDCard.aspx?rtaid=469 . 
38 Prior to the entry into force of the IEPA, trade with the EU was governed by Market Access 
Regulation No. 1528, under which preferential access was provided for all products except rice and sugar. 
39 Viewed at: http://www.douanes.gov.mg/?page_id=569 . 
40 Interim Agreement establishing a framework for an Economic Partnership Agreement between the 
Eastern and Southern Africa States , on the one part, and the European  Community and its Member States, WT/TPR/S/318 • Madagascar 
 
- 33 - 
 
  agreement consistent with Article XXIV of General Agreement on Tariffs and Trade 1994 
(GATT 1994)" (Article 3). The IEPA specifies that  the liberalization of trade will take place 
asymmetrically (pursuant to Article 4(c)). The EU is maintaining the full duty-free and quota-free market access conditions provided for by Regula tion No. 1528/2007, except in the case of sugar: 
part 5 of Annex I specifies that the EU may, during the period between 1 October 2009 
and 30 September 2015, impose the MFN duty on products of tariff heading 1701 originating in ESA States, imported in excess of specified levels, if such imports are deemed to distort the 
EU sugar market.
41 
2.48.  Madagascar's tariff reduction schedule, covering the period 2014-2022, is set out in 
Annex II of the IEPA.42 As can be seen from Chart 2.5, customs duties will be reduced 
progressively, but only at the very end of the phas ing-out period, that is, in 2022, will there be full 
duty-free access. The January 2014 duty reductions  related essentially to capital goods and raw 
materials. Some 200 tariff lines are totally exempt from liberalization; they account for around 19.2% of average imports in 2004-2006. These are goods such as certain meats, fish, other 
products of animal origin, vegetables and beverages.
43 
Chart 2.5 Share of imports from the Europe an Union entering duty free, and simple 
average rates under the EPA 
0102030405060708090100
02468101214
NPF APE 2014 2015 2016 2017 2018 2019 2020 2021 2022Simple average rates
Share of duty‐free tariff lines (right‐hand scale)(% of all tariff lines) (%)
Estimates based on the initial EPA implementation schedule 2015 applied tariffs
 
Note: Calculations based on the 6-digit HS. 2 015 applied tariff based on the HS12 nomenclature. 
EPA schedule (to 2022) based on the HS07 nomenclature. 
Source: Estimates based on tariff inform ation supplied by the authorities. 
2.49.  Article 17 provides for the elimination, upon entry into force of the IEPA, of all restrictions 
and prohibitions affecting trade among the partie s, other than the customs duties, taxes, etc. 
provided for under Article 7. Products traded among the parties may not be made subject to new taxes arising out of agreements concluded with third parties subsequent to the signature of the IEPA (Article 18). 
2.50.  Protocol 1, Article 38, deals with dispute settlement. In all cases the settlement of disputes 
between the importer and the customs authorities of the importing country is to take place under 
                                                                                                                                               
on the other part, viewed at: http://eur-lex.europa.eu/resource. html?uri=cellar:75184c8b-f721-4002-87c8-
e301d4adef11.0002.01/DOC_2&format=PDF  [13 June 2014]. 
41 Viewed at: http://eur-lex.europa.eu/resource.html?uri=cellar:75184c8b-f721-4002-87c8-
e301d4adef11.0002.01/DOC_2&format=PDF  (p. 32). 
42 Viewed at: http://eur-lex.europa.eu/resource.html?uri=cellar:75184c8b-f721-4002-87c8-
e301d4adef11.0002.01/DOC_2&format=PDF . 
43 IEPA, viewed at: 
http://eeas.europa.eu/delegati ons/madagascar/docum ents/eu_madagascar/a pe_interimaire_fr.pdf  
[11 June 2014]. WT/TPR/S/318 • Madagascar 
 
- 34 - 
 
  the legislation of that country.44 Also, provisions on the settlement of disputes between the 
governments of the parties are set out in Article 54; Article 53 contains a rendez-vous clause with 
a view to the conclusion of an EPA that includ es an elaborated dispute settlement mechanism. 
2.51.  In addition to the market access agenda, there is a development component which provides 
for technical and financial assistance, in particular for the funding of the priority development 
projects listed in the regional and national matr ices. EU funding of €950,000 is foreseen for the 
implementation of the IEPA, in order to finance these projects. 
2.52.  According to the authorities, the IEPA also includes an additional quota of 2,500 tonnes 
of "non-ACP originating" tuna that national tuna industries will be able to import, and then re-export canned as an originating product, that is, duty free to EU markets, creating a foreign exchange surplus and more jobs for the Malagasy tuna industry, as well as satisfying European 
market demand. 
2.53.  Furthermore, Madagascar continues to benefit from preferences under the EU's Generalized 
System of Preferences (GSP), which incorp orates the "Everything but Arms" initiative
45 under 
which the EU has granted duty-free access sinc e 2001, with no quantitative restrictions, 
to products (except for arms and ammunition) originating in least developed countries, including Madagascar. 
2.2.4  Relations with the United States of America 
2.54.  In June 2014, Madagascar rejoined the group of 37 countries eligible for the programme set 
up by the United States in 2000 under the African Growth and Opportunity Act (AGOA)
46, having 
been excluded from the programme in December 2009 as a result of the 2009 coup d'état. 
The beneficiary countries are granted duty-free an d quota-free access to the United States market 
for a range of products, including certain agricultural and textile products.47 
2.55.   As can be seen from Chart 2.6, the 2009 exclusion was followed not only by a sharp drop in 
US imports from Madagascar, but also by a radical change in their structure, with the end of the 
AGOA preferences halting production and exports of textiles and clothing to the United States (Section 4.6.2.2). 
2.56.  Madagascar is also eligible for United States preferences under the GSP, which Malagasy 
economic operators used more extensivel y during the AGOA preferences stoppage. 
Also, it is granted preferential access for its sugar, within the limits of a 7,258-tonne quota 
which is, however, not filled (Section 4.6). 
2.2.5  Other trade agreements and arrangements 
2.57.  Several other countries extend (non-reciprocal) preferential tariff treatment to goods 
originating in Madagascar under the GSP, includ ing Canada, China, India, Japan and Morocco. 
Each of these countries has its own rules of origin which should be complied with in order to 
benefit from tariff preferences under these arrangements. Madagascar has also signed bilateral trade agreements with some 15 countries. These agreements establish an overall framework for 
trade cooperation, without gr anting tariff preferences. 
                                               
44 Viewed at: http://eur-lex.europa.eu/resource.html?uri=cellar:75184c8b-f721-4002-87c8-
e301d4adef11.0002.01/DOC_2&format=PDF  (p. 1 038). 
45 WTO document WT/COMTD/57 of 29 March 2005. 
46 Viewed at : http://www.ustr.gov . 
47 African Growth and Opportunity Act, viewed at: http://www.agoa.gov/index.html . WT/TPR/S/318 • Madagascar 
 
- 35 - 
 
  Chart 2.6 United States imports from Madagascar, 2007 and 2013  
Duty‐free
12.9%Taxed
3.0%GSP
0.7%
Apparel
(HS 61 and 
HS 62)
83.3%
Other
0.003%AGOA
83.3%
GSP
2.0%Taxed 
13.3%Nickel (HS 
750210)
26.8%
Vanilla 
(HS 
090510)
24.9%
Other
33.0%Duty-free
84.7%(% of total imports)
2007    US$337.9 million 2013   US$178.2 million
 
Note: "Taxed" includes products subject to non-zero duty rates, and products eligible for preferential 
programmes which have not been availed of (3.0% and 1.0% of total imports in 2007 and 2013, respectively). 
Source: US International Trade Commission, viewed at: http://dataweb.usitc.gov . 
2.3  Investment regime 
2.58.  One of the particularities of Madagascar's investment policy regime, which has not changed 
significantly since 2008, is that on the whole the re levant legislation applies identically to Malagasy 
citizens and foreigners, and to domestic and foreign (direct or portfolio) investment. UNCTAD has a website that lists all texts containing provisions relating to international investment in 
Madagascar.
48 In March 2015 the UNCTAD Secretariat was in the process of preparing an 
Investment Policy Review of Madagascar. 
2.59.  Enterprises can invest in Madagascar under three principal regimes, which are not 
cumulative although it is possible to switch from  one to another. They are: (i) the ordinary law 
regime, contained in the Law on Investment in Madagascar (LI)49, which applies to enterprises 
that sell the vast majority of their products on the local market; (ii) a specific framework 
established for large-scale mining investment (Section 4.5)50 and investment in hydrocarbons; 
and (iii) an exceptional regime, contained in the Law on ZEFs in Madagascar, which applies to enterprises that export at least 95% of their production. 
2.60.  However, it is also possible to make an investment under a special arrangement concluded 
with the State, the provisions of which are governed  by decree. It was not possible to obtain a list 
of the special arrangements in force. 
2.61.  Since 2007, the EDBM
51 has become one of the key institutions for promoting and 
supporting investment in Madagascar, and for the application of the country's investment regime. 
All companies (apart from sole proprietorships), whether Malagasy or foreign-owned, must be registered with the EDBM when they are set up; th is should facilitate the monitoring and analysis 
of trends in the domestic and foreign investment  which is so necessary for economic recovery. 
                                               
48 UNCTAD – Investment Policy Hub, viewed at: 
http://investmentpolicyhub.unctad. org/IIA/CountryIris/125#iiaInnerMenu . 
49 Law No. 2007-036 of 14 January 2008 on investment in Madagascar, viewed at: 
http://www.banque-centrale.mg/index.php?id=m4_4_1_11 . 
50 Law No. 2001-031 of 8 0ctober 2002 establishing a special regime for large-scale investment in 
Madagascar's mining sector (LGIM), amended by Law No. 2005-022 of 17 October 2005, viewed at: 
http://eiti-madagascar.org/loi-sur-les-grands-investissements-miniers-lgim-2005 . 
51 Decree No. 2006-382 of 31 May 2006. Information on the EDBM was obtained from its web portal: 
http://www.edbm.gov.mg . WT/TPR/S/318 • Madagascar 
 
- 36 - 
 
  2.62.  The EDBM has a website which is operational and is updated regularly, where most of the 
regulations relating to domestic economic activity can be accessed.52 The EDBM has also assumed 
the responsibilities of the Single Window for investment and the development of enterprises (GUIDE)
53, set up in 2004 to group together all of th e services concerned with business start-up 
formalities, which could be completed within four days, without costs. At present, the only 
documents still being issued by the EDBM are applications for approval under the ZEF regime, as well as the investor visa, the foreign worker visa
54 and the family reunification visa. According to 
information received in connection with this report, the EDBM no longer deals with applications for 
land access authorization55, or authorizations for setting up tourism establishments; neither does 
the EDBM issue the professional identity card for self-employed foreigners (CIPENS), which remains a requirement for foreign investors (Section 2.3.5). 
2.3.1  Investment under ordinary law 
2.63.  Under the LI, both Malagasy and foreign legal and natural persons may establish businesses 
in all areas of activity and hold 100% of an enterprise's capital, subject to the provisions applicable 
to certain sectors which are specifically regulated, including banking, insurance, mining, 
petroleum, telecommunications, and medical, paramedical and pharmaceutical activities. The LI offers the customary guarantees for foreign investors in respect of security of capital and 
investment, compensation for expropriation, equal treatment, and freedom to make both current 
and capital transfers abroad, although the latter must be declared. 
2.64.  In order to facilitate foreign investors' work arrangements, the LI allows their entry and 
short-stay visa to be extended and converted into a "professional category resident visa", 
whether they have a contract of employment with a Malagasy enterprise or are occupying a senior 
management or executive position in that enterpri se. This professional visa authorizes holders and 
their families to reside in Madagascar. The provisions of the Malagasy Labour Code apply. 
2.65.  The LI offers no fiscal privileges to (foreign or domestic) investors, but is aimed specifically 
at "maintaining a simple, fair and growth-friendly tax environment" (Article 6). Enterprises are subject to personal and corporate income tax (IR) , the rate of which has been reduced from 30% 
to 20% with a minimum leviable amount.
56 In order to revive the economy, IR reductions for 
newly established enterprises, which had been abolished during the 2007 tax year, were reintroduced in 2015 for a whole range of sectors, curiously not including agrifood activities. 
2.66.  Pursuant to the CGI (Article 02.02.32), any domestic or foreign direct or portfolio 
investment, in any sector (including mining), is also subject to the tax on capital formation (DA) 
amounting to 0.5% of the capital invested. Investments are also subject to miscellaneous duties and charges on the purchase of buildings (by Malagasy companies) or the long-term rental of 
buildings (by foreign companies). 
2.67.  In 2008, the flat-rate transfer tax was ab olished and replaced by a tax on income (IR). 
This is a 10% tax on payments and transfers by Malagasy companies for the benefit of natural or 
legal persons abroad who are not taxed in Madagascar. It therefore relates to imports of services 
under mode 1 in the WTO General Agreement on Trade in Services (GATS). 
2.68.  Existing tax treaties with France (1984) and Mauritius (1996) are designed to prevent 
double taxation of nationals resident in one or the other of the partner countries. 
2.3.2  Free zones and enterprises (ZEFs) 
2.69.  Enterprises (whether domestic or foreign) wishing to manufacture in Madagascar for export 
can operate under Law No. 2007-037 of 14 January 2008 on Free Zones and Enterprises in 
                                               
52 Viewed at: http://www.edbm.gov.mg . 
53 Decree No. 2003-938 of 9 September 2003. This decree was repealed by Decree No. 2007-396 
of 7 May 2007 which incorporated the ac tivities of the GUIDE in the EDBM. 
54 Order No. 18638/05 of 1 December 2005. 
55 For example: http://www.tana-cciaa.org/download.php?cat=invest&file=dd529608eaab.pdf . 
56 General Tax Code (CGI). WT/TPR/S/318 • Madagascar 
 
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  Madagascar, which applies to enterprises that export at least 95% of their production.57 
In March 2015, seven years after the promulgation of this law, there was – for the first time – a draft decree on its implementation.
58 Such a decree would help bring clarity to operations under 
this regime, where abuses are currently rife; it  appears that in 2015, several hundred enterprises 
that were not exporting were operating under th e regime, on the basis of false documentation. 
2.70.  The crisis prompted a sharp drop in the number of ZEFs operating in Madagascar 
from 2008. A majority of these (foreign-owned ) enterprises had been set up to serve the 
US garment market, which was closed to them wh en the AGOA preferences were halted in 2009 
(Section 2.2.4). With the resumption of the AGOA, apparently there are already 13 new, eligible companies. 
2.71.  The conditions for ZEF eligibility are: firstly – in principle – the sale abroad of goods or 
services originating in Madagascar. Eligible enterprises may sell on the local market a maximum 
of 5% of annual production actually exported (Article 7), or they may sell directly to other ZEFs. The second condition is to be engaged in one of  the categories of activity specified by the 
Law: industrial processing enterprises are engaged in manufacturing
59; intensive basic production 
enterprises are active in agriculture, livestock farming and the exploitation of fisheries resources; for services enterprises, eligibility is confined to the following activities: film and video production; 
software design and development; computer data processing; technical testing and analysis; 
product certification; telemarketing and telecommunications; and banking operations. Applications for approval are evaluated in an interministerial file. The EDBM is responsible for issuing approvals. 
2.72.  Unlike the ordinary law regime, the ZEF regi me offers significant tax benefits (Table 2.3) 
which seriously distort the conditions of competition between local enterprises and ZEFs; the fact 
that these benefits are additional to the following advantages explains the high number of fraud cases: 
 freedom to borrow abroad as well as in local currency; 
 freedom to pay all export earnings and payroll income into foreign banks abroad; 
 free access to foreign exchange locally (for payments to suppliers, remittance 
of dividends, etc.), subject to availability; 
 freedom to transfer available funds at th e end of a contract or on closing down, 
provided that debts incurred in Madagascar have been settled in full; 
 no administrative authorization required for the sale of shares, or of a business, 
between non-residents; 
 exemption from the income tax on payments or transfers abroad (formerly flat-rate 
transfer tax); 
 freedom to enter into subcontracting arrangements with companies under the ordinary 
law regime; 
 exemption from the 0.5% tax on capital formation; and 
 freedom to sell fully or partially depreciated plant and equipment. 
                                               
57 Law No. 2007-037 of 14 January 2008 on free zones and enterprises in Madagascar, viewed at: 
http://www.edbm.gov.mg . 
58 Draft Decree implementing Law No. 2007-037 of 14 January 2008 on free zones and enterprises in 
Madagascar. 
59 The industrial processing enterprises eligible under the Law are defined by the decree as 
manufacturing industries, or as "manufacturing" under the United Nations International Standard Industrial 
Classification (ISIC). WT/TPR/S/318 • Madagascar 
 
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  Table 2.3 Fiscal regulations under  the ZEF regime, December 2014  
Eligibility Fiscal provisions 
Enterprises  
Corporate income tax (IR)a  
 - Industrial processing enterprise  Exempt for 5 years, thereafter liable to IR at 10% 
 - Intensive basic production enterprise Exempt for 5 years, thereafter liable to IR at 10% 
 - Services enterprise Exempt for 2 ye ars, thereafter liable to IR at 10% 
Persons  
Taxes on distributed dividends 10% without grace period 
Taxes on payroll income Maximum of 35% of the tax base (for expatriates) 
Goods  
Customs duty Exempt 
Value added tax General principle: all VAT payments to be the subject 
of automatic reimbursement 
Export duties and taxes Exempt 
Excise duty Exempt 
a In 2014, the normal IR rate was 20%. 
Source: Malagasy authorities. 
2.73.   Moreover, the ZEF legislation offers flexibility in the application of labour laws; in particular, 
it permits night work by women. ZEFs are free to  determine how many expatriate specialists they 
employ. This is a significant advantage in practice, as it can take up to a year to obtain work 
permits for skilled workers and this has an obviou s impact on the competitiveness of enterprises 
requiring skilled staff. Expatriate staff also receive a professional resident visa, valid for the duration of their employment contract. 
2.3.3  Business environment 
2.74.  In 2015, improving the business environment is a government priority. In order to promote 
sustainable growth and job creation, notably through investment, the Government must work to 
enhance the operating conditions of enterprises, particularly the micro, small and medium-sized 
agribusinesses that account for the bulk of econom ic activity. Madagascar is showing mixed results 
under the World Bank's Doing Business indicators (Table 2.4). Although there has been little 
improvement in its ranking since the previous review, significant progress has been made 
regarding the cost and number of days needed to st art a business, which is probably a reflection of 
the EDBM's endeavours. Where starting a business is concerned, Madagascar is in an enviable position compared with neighbouring countries. As is shown by Table 2.4, trading across borders is 
another area that has seen major improvements, es pecially in terms of the time required and the 
number of procedures, reflecting recent efforts by the Customs (Section 3.1.2). 
2.75.   On the other hand, one of the main problems facing investors is access to credit, and here 
there has been a significant deterioration; obtainin g loans is often cited as the biggest obstacle to 
production and trade. The second obstacle to starting a business is the transfer of title, 
which remains very expensive; Madagascar is poorly ranked for granting construction permits and registering property (Section 2.3.6). Thirdly, access to electricity remains particularly problematic 
because of mismanagement of the sector (Section 4.5.3). 
2.3.4  Protection of foreign investment 2.76.  There are a number of agreements that include measures for the protection of foreign 
investment in Madagascar. The 11 bilateral agreements on investment promotion and protection 
signed by Madagascar, nine of which are in force, are available on the UNCTAD website; agreements ratified since the previous review include an agreement with Switzerland which was 
ratified in 2014.
60 These agreements generally provide for national treatment and 
most-favoured-nation treatment (on a reciprocal basis) for investors from other parties; compensation for expropriation; freedom to tran sfer funds earned from investment activities; 
and dispute settlement. 
                                               
60 Law No. 2014-029 authorizing the ratification of  the Agreement concluded on 19 December 2008 
between the Government of the Republic of Madagascar and the Swiss Confederation on the reciprocal 
protection and promotion of investment, viewed at: http://www.admin.ch /opc/fr/federal-
gazette/2009/769.pdf . WT/TPR/S/318 • Madagascar 
 
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  Table 2.4 Operating conditions of enterpri ses in Madagascar and in neighbouring 
countries, 2007 and 2014  
 Madagascar Mauritius Mozambique South Africa 
 2007 2014 2007 2014 2007 2014 2007 2014 
Ease of doing business (ranka) 149 148 32 20 140 139 29 41 
Starting a business          
- Ranka 110 29 30 19 153 95 57 64 
- Costb 35.0 12.9 8.0 3.6 85.7 18.7 6.9 0.3  
- Number of days 21 8 46 6 113 13 35 19 
Trading across borders          
Ranka 131 115 21 12 141 131 67 106 
Number of documents to export 9  5 4 4 7 7 7 5  
Time to export (days) 49 22 13 10 28 21 25 16 
Cost to exportc 1,182  1,195  683 675 1,055  1,100 1,087 1,705  
Number of documents to import 11 9 6 5 9 9 7 6 
Time to import (days) 48  21 13 10 36 25 35 21  
Cost to importc 1,282  1,555  683 710 1,185  1,600 1,195 1,980  
Getting credit (rank) 159  180 83 42 83 130 33 28  
Registering property         
- Rank 162  155 156 65 105 152 69 99  
- Number of procedures 6 6 6 4 8 8 7 7 
- Costd 11.6 10.3 15.8 10.6 10.4 7.7 9.0 6.1  
a The 2007 and 2014 rankings are based on 175 and 189 countries and economies, respectively. 
b As a percentage of per capita income. c In US$ per container. d As a percentage of the value of the property. 
Source: World Bank (2006) and (2014), Doing Business, viewed at: 
http://www.doingbusiness.org/reports /global-reports/doing-business-2014 . 
2.77.  On the latter point, Madagascar offers foreign investors a choice between referral to 
a national arbitration body or court, and arbitration by the International Centre for Settlement 
of Investment Disputes (ICSID) at which, in 2013, a case concerning Madagascar was registered for the first time since 1982.
61 This was also the first case involving a dispute between a private 
investor and the State. A Mauritian private enterprise filed a case with ICSID against the 
State of Madagascar, invoking the investment protection agreement between the two countries.62 
2.78.  Madagascar's membership, since 1989, of the Multilateral Investment Guarantee Agency 
(MIGA) offers investors the possibility of guarantees against non-commercial risks. In 2014, 
there were eight projects guaranteed with MIGA.63 Cover against political risk is also available to 
investors, through the African Trade Insurance Agency (ATI). The Cotonou ACP-EU Agreement provides for the protection of European investments in the ACP countries (Articles 260-262); 
this protection is also provided for in the Economic Partnership Agreement (Section 2.2.3). 
2.3.5  Measures applied to foreign suppliers 2.79.  A 1962 Law on Immigration Control, amended in 1995
64, applies to all foreign nationals 
wishing to engage in a "professional activity"; it therefore has the potential to affect market access 
for foreign investors, including traders wishing to conduct import-export activities. 
2.80.  The Law divides such foreigners into two categories – employee and self-employed, 
and identifies three classes of professional ac tivity: (1) Farming; (2) Industry and crafts; 
                                               
61 ICSID 2014 Annual Report, viewed at: 
https://icsid.wo rldbank.org/apps/ICSIDWEB/resources/Documents/ICSID_AR14_FRE.pdf . 
62 UNCTAD (2014). 
63 Viewed at: 
http://www.miga.org/projects/advsearchresults.cfm?srch=s&hctry=137c&hcountrycode=MG . 
64 Law No. 62-006 of 6 June 1962 on the organization and control of immigration, amended by 
Law No. 95-020 of 27 November 1995and its Implementing Decree No. 97-1154 of 19 September 1997, 
viewed at: http://www.droit-afrique.com/images/textes/Madagascar/Madagascar%20-
%20Code%20du%20travail.pdf . WT/TPR/S/318 • Madagascar 
 
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  and (3) Commerce. Foreigners may be barred from  certain professions (which currently are not 
clearly specified), or may require an authorization granted by order of the President in order to engage in them. 
2.81.  Moreover, foreigners cannot take up employment without authorization from the relevant 
ministry, and must hold a CIPENS card stating the class of profession (one class only) in which 
they are permitted to work. The usefulness of the CIPENS card is debatable – it contains 
information which is already available elsewhere, notably in the taxpayer identification record and 
the Commercial Register, and makes the investment and import-export process unnecessarily 
burdensome; it should therefore be reviewed. In  March 2015, however, the possibility of making 
a charge for the card and reducing its validity period was being considered. 
2.3.6  Land reform 
2.82.  The land problem is currently one of the main challenges to investment in Madagascar. 
In 2005 the Government initiated a wide-ranging refo rm of land legislation which is still ongoing, 
and has already led to significant progress with the registration of property (Box 2.1). The reform 
resulted in a Law
65 which introduced, in particular, a National Land Ownership Programme (PNF) 
aimed at enabling Malagasy citizens to obtain secure land tenure.66 The Law has, inter alia , 
created new property rights, including that of pr ivate ownership of untitled land, thus offering 
users the choice, for securing their property rights, between the traditional procedure based on 
registration and a certification procedure. A network of 500 land offices is operational. 
Box 2.1 Land reform and foreig n investment in agriculture  
In 2005 the Malagasy Government, aware of the importance of land both as property and as a production 
factor, was one of the first in Africa to enact genuine la nd reform. New laws were pass ed, defining in particular 
land statuses and the legal regime of  private ownership of untitled land (PPNT). Land offices were established 
in the communes to facilitate land certification. Land policy implementation is carried out by the 
Ministry of State in charge of land, in particular th rough the National Land Ownership Programme and the Land 
Reform Coordination Unit. A Land Observatory has been  set up to produce studies on the follow-up to the 
reform, initiate discussions about the results and advise policy-makers. In particular, a national land inventory 
is being drawn up and will be used as a reference tool by all stakeholders.  
This means that since 2005, land which is untitled but occu pied no longer belongs to the State; instead there is 
a presumption of PPNT. Moreover, the land reform has given the communes new powers: the local land offices 
can formalize users' property rights to PPNT plots and issue individual or collective certificates. Thus, two types 
of legal entities (State property services and communes ) are responsible for land administration, and there are 
two possible means of formalizing ownership, that is, titling and certification, the latter approach being 
considerably less costly.  
As a result of this reform the State, through its property services, may not, in principle, assign land unless it is 
part of the State's private domain, which has been significantly reduced in size since the reform and now 
consists of land to which the State holds title, and land which is untitled and unoccupied. It may not assign 
land belonging to private persons whose ownership rights ha ve been recognized by title (PPT), or land held as 
PPNT. Moreover, foreign investors (like national entrepre neurs or enterprises, where large areas of land are 
concerned) may not obtain title to land . The State must hold title to the land, which it then leases to investors 
for a period of 30 to 99 years.  
Nevertheless, the Government did initiate the assignment of large areas of land to investors, including 
foreigners, wishing to engage in agricultural producti on. At the end of 2008, civil unrest was exacerbated by 
press reports of the Daewoo company's plans to take a 99-ye ar lease on 1.3 million hect ares of arable land, to 
grow corn and oil palms. In March 2009, following violent protests and the fall of the Government, 
the agreement with Daewoo was rescinded; but there were another 50 or so agricultur al investment projects 
waiting in the wings.  
These events showed that the legal recognition of ri ghts does not guarantee their effective protection. 
Technical difficulties associated with the extent of the land make it challenging to comply with land legislation. 
Often, the land tenure documents are not up to date. Also , a failure to inform and consult rights holders during 
field visits, a lack of familiarity with the new land laws and a desire in certain quarters to see agricultural 
p r o j e c t s  d e v e l o p  c a n  o f t e n  m e a n  t h a t  i n v e s t o r s '  r e q u e s t s  f o r  a c c e s s  t o  l a n d  a r e  f a v o u r a b l y  r e c e i v e d  a t  t h e  
outset, without a proper cost-benefit analysis and with out considering the views of all the affected parties. 
                                               
65 Law No. 2005-019 of 17 October 2005 determining the principles governing land statuses in 
Madagascar, viewed at: http://www.maep.gov.mg/lois_fonciere.htm . 
66 For further details, see the State portal: http://www.foncier.gov.mg ; and the Land Observatory 
portal: http://www.observat oire-foncier.mg . WT/TPR/S/318 • Madagascar 
 
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  Since 2008, around 150,000 hectares have been taken up by foreign direct investment, primarily for the 
production of biofuels (especially Jatropha oil). Most  of this production is for export. Information on 
agro-industry projects is not publis hed at present. The Observatory plan s to publish an inventory of such 
projects on a dedicated website. The EDBM is responsible for welcoming investors, including in the agricultural 
sector (Section 4.1).  
The period from 2005 to 2014 saw land requests submitted for a total of more than 3 million hectares, 
a substantial area when compared to the 2 million hect ares currently under cultivation by some 2.5 million 
family farms. Currently, the number of projects under way or in the pipeline in the agricultural sector has fallen 
to around a dozen, focusing on the production of Jatrop ha-based biofuels and, to a lesser extent, cereals and 
oilseeds. Between 2005 and 2014, around 60,000 hectares were leased out in the agricultural sector, but less 
than 4,000 hectares were actually put to productive use.  
When a land registration or lease request is made by an investor, the State's property services require that 
a multi-stage process be conducted to ensure that the land  concerned is neither titled or certificated to private 
individuals, nor occupied. In 2009 and 2010 there were two ministerial circulars requiring investors to obtain 
a series of formal approvals in order to gain access to land (approvals gran ted by an interministerial committee 
for areas in excess of 250 hectares, and in the Council of Ministers for those in excess of 2,500 hectares). 
The certificates are still too recent and too few in number to allow their impact on the land market to be 
evaluated. According to the Land Observatory, there is no mechanical link between a legal deed of property 
and access to loans. Few households are able to obtain lo ans, although many would like to. 
Moreover, small farmers and microfinance institutions share strong misgivings about the use of property 
deeds, much preferring physical collateral (bicycles, ze bus, sacks of rice, etc.), that is, assets which are not 
worth as much but are easier to resell if the loan is not repaid (risk of social backlash, and of there being few 
buyers for an indebted owner's land). 
Source: Law No. 2005-019 of 17 October 2005 determining the principles governing land statuses. 
Law No. 2006-031 of 24 November 2006 establishing the legal regime of private ownership of untitled land, and its Implementing Decree No. 2007-1109 of 18 December 2007. Law No. 2008-014 establishing the legal regime of land owned privately by the State and by territorial authorities, and its Implementing Decree No. 2010-233. Instructions for dealing with requests for large areas of land. Circular No. 321-10/MATD/SG/GDSF of 25 October 2010. Andrianirina Ratsialonana R., and P. Burnod (2012), " Entre le légal et le légitime: état des lieux de 
la gouvernance foncière à Madagascar ", Antananarivo, Landscope, Notes by the Madagascar 
Land Observatory. Burnod P., R. Andrianirina Ratsialonana, and A. Teyssier (2013), " Processus d'acquisition foncière 
à grande échelle à Madagascar: qu elles régulations sur le terrain? ", Cahiers Agricultures, 22 (1). 
2.83.  It would be sensible to broaden this reform to encompass a review of the conditions of 
access to real estate by foreigners; the current regulations could be examined and be published on the Internet, which is not the case at present. Although the purchase of real estate by foreigners is prohibited (foreigners have access only to titled, state-owned land, such access being by means 
of 18 to 99-year leases)
67, many laws and regulations contain references to the "acquisition" of 
land by foreigners.68 This has created a grey area, with certain companies changing nationality or 
using nominees in order to circumvent the law. Over all, the administration of the property register 
is frequently described as archaic. Land disputes are common and constitute a serious disincentive 
to foreign investment, especially in the key area of tourism. 
 
 
                                               
67 Law No. 2007-036 (of 14 January 2008 on Investment in Madagascar) states, in Article 19.2, 
that "Under no circumstances shall such authorization cons titute a title deed for the property concerned; it is 
simply the document which allows the parties to conduct the necessary legal formalitie s for the transfer of real 
estate.". Moreover, Article 18.b of th e same law reaffirms that "Foreign na tural or legal persons cannot have 
direct access to land ...". 
68 Examples include Law No. 62-006 of 6 June 1962 on the organization and control of immigration, 
amended by Law No. 95-020 of 27 November 1995; Law No. 96-016 of 13 August 1996, and Law No. 2003-028 of 27 August 2003. WT/TPR/S/318 • Madagascar 
 
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  3  TRADE POLICIES AND PRACTICES BY MEASURE 
3.1  Measures directly affecting imports 3.1.  Madagascar has been striving constantly since 2005 to improve its customs services. 
Substantial changes to economic procedures were introduced under the Customs Code in 2006, 
in particular with the incorporation of provisions of the Revised Kyoto Convention (RKC) on the 
simplification and harmonization of customs procedures. Amongst other things, the inward and outward processing procedures were integrated and the industrial warehouse procedure was 
abolished. Further changes have been made th rough successive finance laws, with provisions 
being formulated to offer much greater clar ity or to improve compliance with the RKC. 
3.2.   Much progress has been made followin g the establishment and use of the TradeNet 
Electronic Single Window by GasyNet. In July 2014, the law on cybercrime was adopted 
(Table 2.1) and the dematerialization of customs clearance procedures decreed.
1 The MIDAC 
(Ministries, Departments and Control Agencies) System, an integral part of TradeNet, now allows several of the numerous control institutions that must approve imports to transmit their 
authorizations electronically to the Customs. 
3.3.  All the texts are in principle available online on the Customs website, which also contains 
recent statistics.
2 Since 2011, the Customs Administration has been gradually introducing 
an Observatory of Customs Clearance Time (ODD) across five offices. It brings together all 
bodies and institutions involved in the customs clearance process, and aims to identify any bottlenecks occurring in the clearance process as well as the nature and causes of them, and to suggest solutions. 
3.1.1  Registration 
3.4.  As stated in Section 2, practising as a trader in Madagascar is still subject to at least 
two formalities that could be streamlined to good advantage: registration in the National 
Commercial and Companies Register
3 and obtaining a tax identification number (NIF) from the tax 
administration. These two systems are interconne cted electronically. Lack of an NIF or the 
existence of any irregularity pertaining to it will result in the assessment of the tax on intermittent 
income (IRI) at a rate of 5%, which amounts to an  additional charge on imports (Section 3.1.4.4 
below). For example, all personal imports of vehicles, whether or not for professional purposes, give rise to payment of the IRI. 
3.5.  The requirement that foreigners hold a professional identity card for self-employed foreigners 
(CIPENS) to be able to practise commercial professions creates differences between Malagasy and 
foreign nationals (Section 2.3.5). Besides, cu stoms procedures can only be carried out by 
approved customs clearing agents (Section 3.2.2 below). 
3.6.  Since 2007, exporters have been required to fill out the cargo tracking note (BSC) in advance 
if the value of the shipment dispatched to Madaga scar is higher than or equal to the equivalent 
of €100 f.o.b., including personal effects and non-commercial relocations.
4 
3.7.  To do this, the exporter (to Madagascar) must set up a BSC account by supplying a number 
of documents, which are listed on the BSC webs ite, including an excerpt from the Commercial 
Register to be obtained in his country.5 Unlike other countries, however, the cost of the BSC is 
incorporated in the charges levied by GasyNet (see below). 
3.8.  The BSC largely duplicates the main el ements of the import declaration (see below). 
The documents required for the BSC are the detailed final invoice, the contract of sale, the bill of lading for maritime shipments, and the customs export declaration, which enables more 
                                               
1 Decree of the Ministry of Finance and Budget on the dematerialization of customs clearance 
procedures. 
2 Viewed at: http://www.douanes.gov.mg . 
3 Laws No. 99-018 of 2 August 1999 and No. 99-025 of 19 August 1999. 
4 Decision No. 01-MFB/SG/DGD of 23 March 2007. 
5 Viewed at: http://www.bscmg.sgs.com . WT/TPR/S/318 • Madagascar 
 
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  effective tracking of goods. According to th e Customs, the BSC has greatly reduced customs 
clearance times. 
3.1.2  Customs procedures 3.1.2.1  Customs clearing agents 
3.9.  The customs formalities relating to commercial imports, more specifically to the detailed 
declaration, may be performed only by approved customs clearing agents.
6 Any operator with the 
appropriate training and the necessary financial standing may seek approval for a specific customs 
clearance office. A permanent bond of MGA 20 million (roughly US$6,600) per office is required to 
practise the profession. However, the Customs Administration also approves any genuine consignee or consignor of goods intending to make detailed customs declarations for their own account ("Transit-maison"  [own-company transit]).
7 In 2014, 168 customs clearing agents were 
approved, as were 267 transits-maison . 
3.1.2.2  Electronic single window 3.10.  It has been possible since 2007 to complete much of the customs clearance formalities 
(for imports or exports) through TradeNet, an electronic single window set up under a framework 
agreement between the Government and GasyNet.
8 GasyNet's capital is 70%-owned by a private 
foreign company (SGS) and 30% state-owned. 
3.11.  GasyNet's charges (PGN) are fixed by regulation at 0.5% of the c.i.f. value of the goods 
imported (or exported, see below) or at flat-rate levels for goods with an f.o.b. value of less than the MGA equivalent of €25,000.
9 The authorities argue that the GasyNet services (and the related 
charges) also cover services relating to the BSC, to scanners, the TradeNet electronic single 
window (including the MIDAC, which is a TradeNet module, see below), the various development 
costs and software licenses, interconnection charges (customs offices, banks, GasyNet and some other players in the procedure), charges relating  to the hosting of the system (TradeNet and 
ASYCUDA), the storage and securing of data, maintenance, training, user assistance and support, etc. 
3.12.  GasyNet's charges also include a flat-rate retrocession of roughly US$16 million annually for 
the benefit of the Customs Administration for addi tional work and capacity building, which GasyNet 
pays to the Treasury. 
3.13.  GasyNet nonetheless accords companies operating under the Free Zones and Enterprises 
regime (ZEFs) a more favourable scale of charges for its services: €100 per container (20- or 40-foot equivalent) or €50 per container if the containers are grouped; for air shipments, 
the charge is €50. The prices of the same servic es therefore differ between ZEFs and companies 
operating under the ordinary law regime. It would benefit the economy as a whole if all companies, including those operating under the ordinary law regime, could access the same 
services at the same lower price accorded to ZEFs. 
3.1.2.3  Import documentation 3.14.  Three different documents must be generated for each import operation, beginning with the 
BSC (Section 3.1.1). The second document is the registration of the manifest with ASYCUDA++ 
(summary declaration). The third is the detailed declaration in the form of a single administrative document (DAU), the dematerialization of which has been under way since mid-2014. 
3.15.  Amongst the trade facilitation measures, the Customs Code authorizes – and the Customs 
Administration strongly encourages – the ship's agent or the aircraft captain to file the cargo 
manifest in advance with the customs office, as of 10 days before the arrival of the vessel, 
                                               
6 Order No. 16 146/08 of 21 September 2007. 
7 Online information from the Malagasy Customs, viewed at: http://www.douanes.gov.mg/?page_id59 . 
8 Order No. 8426/2007 MFB/SG/DGD of 4 June 2007. 
9 Articles 89-97 of the Customs Code and Order No. 8426/2007 of 4 June 2007. The sums are: €10 for 
an f.o.b. value of less than €1,000 (i.e. at least 1% ); €25 for an f.o.b. value of between €1,000 and €2,500; 
€75 for an f.o.b. value of between €2,500 and €10,000; and €145 for an f.o.b. value of between €10,000 and €25,000. WT/TPR/S/318 • Madagascar 
 
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  for the purposes of the summary declaration. A ccording to the Customs, few companies make use 
of this possibility, and this considerably slows down the import process: in 2013, only 16% of 
manifest filings took place before the arrival of vessels, of which almost half (46%) took place the day before arrival.
10 The aim of the ODD is to bring together all stakeholders (port authorities, 
shipping companies, customs, transporters, GasyNet,  bank, etc.) initially to detect sticking points 
and then to seek appropriate solutions. 
3.16.  Import licences and permits are required for petroleum products and lubricants (Malagasy 
Hydrocarbons Board (OMH), Section 4.5.2), products  of plant origin, products of animal origin, 
food products (radioactivity and "fitness for consumption" tests) and for medicines; (Section 3.3.1.5), telecommunications equipment (Malagasy Telecommunications Studies and Regulation Board (OMERT), Section 4.9) , and for regulated measuring instruments. 
Madagascar has made considerable headway in simplifying the transmission of these documents, 
including via the MIDAC module, which is an electronic platform that enables the parties involved in imports (importers, freight forwarders, control agencies, etc.) to submit online to the Customs 
any trade-related documentation and permit application for the purposes of processing and 
validation. The decisions issued can be consulted online and are immediately applicable for customs clearance. 
3.17.  The authorities aim to connect to the MIDAC Module entities that are not yet linked up with 
the customs clearance single window, including the Central Bank of Madagascar (BCM) and the Treasury, which record payments made by operator s. The Ministry responsible for mining issues 
permits for all mining-related exports. The Mini stry of Agriculture issues a permit for all 
agricultural products, seeds and live plants  introduced or exported to Madagascar, 
the Ministry of Livestock for all live animals and animal products, the Ministry responsible for the environment for all exports of forestry products, and for all imports of used tires and 
used batteries. 
3.18.  According to the OECD
11, lack of coordination among border agencies is one of the main 
factors in border delays and overall border costs. As discussed in Section 3.3.1 (on technical 
standards and regulations), many documents and procedures are still required for products to be 
made available for consumption. The future national trade facilitation committee could play a crucial role in this regard. Amongst recent coordination efforts, the Customs has again been made responsible for collecting the IRI and excise duty since 2015. 
3.1.2.4   Customs valuation and inspection 
3.19.  Madagascar ceased having a goods import inspection and verification programme in 2007. 
The BSC (see above) in part plays that role, and according to the Customs, facilitates its task 
of import inspection and verification. 
3.20.  The rules laid down in the WTO Cust oms Valuation Agreement are embodied in the 
Customs Code (2014).
12 However, until March 2015 the Code maintained a provision whereby 
"officially established minimum values may be retained on a limited and transitional basis." 
Until then, Madagascar had applied minimum values to some goods in order to secure tax revenue (Table 3.1); different minimum values were set depending on the country of origin (in particular China, Egypt, India and Turkey). According to a Customs Note dated 25 February 2015, 
the use of these values ceased as of 3 March 2015. 
                                               
10 Rapport ODD 2013, viewed at: http://www.douanes.gov.mg . 
11 See OECD Indicators on trade facilitation – Madagascar. 
12 Section IV, Chapter V of the Customs Code (2014 Edition). WT/TPR/S/318 • Madagascar 
 
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  Table 3.1 Goods subject to a minimum import value, 2014 
(US$) 
Description of product HS Code  Minimum value  
Milk, condensed, sweetened 04.04 22.2/Ctn 
Wheat flou r 11.01 468/M T 
Soya-bean and sunflower oil 15.07/15.12  947/M T 
Palm oil / coconut oil 15.11/15.13  877/1,393/M T 
Sugar 17.01 514/M T 
Edible pasta 19.02 738/M T 
Cement 25.23 89/M T 
Lubricants 27.10 1.48 kg. 
Laundry soap in the form of bars 34.01 0.78 kg. 
Detergent powders 34.02 0.63 kg. 
New pneumatic tyres 40.11 35,000/Ctn 40-foot  
A4 Pape r 48.02/48.10  899/M T 
Toilet pape r 48.18 0.85 kg. 
Wholesale bulk fabrics, packaged in bales 52.08-12; 52.09-12; 53.09; 54.07-08; 55.12-16  1.20 kg. 
Blankets  63.01 1.75 kg. 
Worn clothes and other worn articles in 
bales 63.09 0.75 kg. 
Sandals 64.03/64.05  0.37/pai r 
Tiles 69.07/69.08  0.25 kg. 
Hot-rolled steel in coils (HRC)  72.08 588/M T 
Steel plates 72.08-12  581/M T 
Cold-rolled steel in coils (CRC)  72.09 681/M T 
Galvanized steel (HDG) 72.10 726/M T 
Reinforcing steel bars 72.14 556/M T 
Steel rods 73.04 568/M T 
Nails 73.17 626/M T 
Zinc-carbon batteries 85.06 0.17/DOZ 
Used spare parts 87.08 1 kg. 
Baby diapers 96.19 0.07/each 
Note: Ctn = container; MT = metric tonne; DOZ = dozen. 
Source: Malagasy Customs. 
3.21.   The goods in this list are classified as "sensitive products", being the "main sources 
of customs revenue"; false declarations of value are the most numerous for these goods. GasyNet 
calculates minimum values based on the "ValiTrade" system marketed by the SGS, taking into account the official international market prices of goods, a market study, domestic market prices, previous transactions and similar transactions. 
3.22.  Moreover, Madagascar maintains a reservation concerning the order of the methods to be 
used in the event of rejection of the transaction value.
13 According to the authorities, if the 
declared value is rejected, the Customs proposes an alternative value in keeping with the methods 
stipulated in the Agreement. If the importer does not accept this proposed value, the parties begin 
arbitration. The Customs has expressed interest in  a technical assistance seminar on the subject. 
3.1.2.5  Risk management and the use of scanners 
3.23.  On the basis of the BSC, the Customs targets goods or shipments even before the 
submission of the DAU. On registration of the de claration, a selection system assigns a channel to 
the declaration. The blue channel exists for co mpanies benefitting from the Accelerated Customs 
Clearance Procedure (PAD).14 It allows for the automatic assessment of duties and taxes following 
the registration of the DAU and the immediate release of the goods following statutory verification 
of the payment of duties and taxes. This channel is available to importers deemed reliable by the 
Customs. About 100 companies, or a quarter of annual declarations, currently benefit from an 
accelerated clearance procedure, which also enables them to withdraw their goods immediately on 
arrival, once the duties and taxes are paid. 
                                               
13 If the value declared by the importer is rejected , the WTO Agreement provides for the use of one of 
the following methods: transaction value of identical goods (Article 2); transaction value of similar goods 
(Article 3); deductive value (Article 5); constructed value (Article 6); fallback method (Article 7). These 
valuation methods must be used in the order listed, bu t Article 4 of the Agreement states that the importer 
may request the order of application of  Articles 5 and 6 to be reversed. Ma dagascar has reserved the right to 
do so (WTO document WT/Let/112 of 30 September 1996). Madagascar also noted that paragraph 2 of 
Article 5 of the Agreement would be applied whether or not the importer so requested. 
14 Decision No. 23MFB/SG/DGD of 8 November 2011. WT/TPR/S/318 • Madagascar 
 
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  3.24.  Half the declarations are processed via the yellow channel, which is dedicated to goods 
whose transaction is deemed to entail a medium level of risk. In this case the verification is solely to ensure the correctness of the form and content of both the declaration and as its attachments (invoice, waybill, import or export permits). The remaining quarter of declarations are assigned to 
the red channel, and the importer is automaticall y informed that the goods are being retained for 
inspection, scanning and an actual visit. The main customs offices are now equipped with scanners used only for red channels. The GasyNet service includes the costs associated with 
scanning operations. 
3.1.3  Dispute settlement and appeals procedures 3.25.  All decisions of the Malagasy Government can in principle be appealed before a competent 
administrative court (see Section 2.1 on legal uncertainty, however). The Customs Code provides 
for an independent appeals body for operators, the Conciliation and Customs Appraisal 
Commission (CCED). In the course of the clearance procedure, the declarant may challenge, before the Commission, the Customs Administration's decisions concerning the tariff classification, 
origin and value of the declared goods.
15 In the second instance, the declarant may appeal the 
decision of the CCED to the competent court. According to the Customs, the most frequent 
disputes are about value. 
3.26.  In the event of a dispute, the agent that  identified the infringement and his superiors 
share 25% of the proceeds with the other agents who participated in the handling of the file (prosecution, recovery, etc.) up to its final settlement.
16 According to the Customs, this measure 
motivates the agents and encourages them to id entify infringements rather than be bribed. 
Provisions of this kind create a conflict of interests between trade facilitation and the desire to 
multiply the number of dispute cases in order to generate personal income. 
3.1.4  Levies at the border 
3.27.  Madagascar has a simple import tax structure, with the customs tariff being the only duty 
levied exclusively on imports. Yet several levies ar e still being collected at the Malagasy border at 
importation and to a lesser extent at exportation, in particular through internal taxes 
(Section 3.1.4.4 below) and fees, dues or other charges assessed when goods arrive at ports 
(Section 4.7.1). 
3.28.  The rates of the tariff and other duties are modified each year by the Finance Law. 
Since 2008, customs duty modifications have been mostly downward and have affected mainly 
inputs for agricultural production (Section 4.1.1.1).17 Besides, the payment of petroleum taxes has 
been partly deferred since 2011, on the one hand as a State guarantee of the payment of government subsidies granted to distributors of o il products, and on the other, of the payment of 
JIRAMA electricity company debts to distributors (Section 4.5.2). 
3.29.  Between 2008 and 2014, customs revenues have accordingly declined in proportion 
to the value of imports, to less than 5% of th e latter. Internal taxes collected on imports, 
including 20% VAT, have also fallen. Total taxes levied on imports, which were more than 30% of 
their value in 2012, have fallen to 23%. Yet these taxes continue to occupy a disproportionate place in the government budget, a fact that is thwarting attempts to eliminate international trade taxes: these levies at the border account for 52.5% of tax revenue. (Table 3.2). 
                                               
15 Article 111 of Customs Code (2014 Edition). 
16 Decision No. 02 MFB/SG/DGD of 20 January 2010 laying down the rules for distributing the proceeds 
of customs fines and confiscations. 
17 Accordingly in 2012 there were cuts in the rate of customs duty on some commodities (meslin for 
making flour: customs duty cut from 5% to 0%; additive  for the manufacture of motor oil: customs duty cut 
from 10% to 5%). In 2013, duties and taxes were waived  on imports of a range of appliances and equipment 
powered by renewable energy; duties  were reduced on some raw materials and inputs to enable local 
industries to remain competitive; the harmonization of  the customs duty rate fo r parts and accessories at 
10%; the waiving of customs duty on agricultural mach inery; exemption from payment of customs duty on 
vitamins not put up for retail sale an d on some inputs for the production of  farm feeds; the application of the 
Florence Agreement by exempting b ooks, booklets, newspapers and prin ted periodical publications from 
customs duty. WT/TPR/S/318 • Madagascar 
 
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  Table 3.2 Taxation of import s, by category, 2008, 2010-2014 
(MGA billion and %) 
 2008  2010  2011  2012 2013 2014a 
Import duties only      
Customs duty (DD) 220 172 210 220 220 243 
Tax on petroleum products (imported) 100  90 87 80 80 86  
Total import levies  320 262 297 300 300 303 
 % of importsb 6.4%  5.9%  5.6%  6.1% 5.3% 4.9%  
Internal taxes on imports      
VAT on petroleum products 204  182 224 223 358 280  
VAT on imports of other products 483 385 477 522 515 605 
Excise duty 348  437 457 444 435 236  
Tax on intermittent income (IRI) n.a. n.a. n.a. n.a. n.a. n.a. 
Total import levies 1,035  1,004  1,158  1,189 1,308 1,121  
 % of importsb 20.7%  22.6%  21.8%  24.2% 23.1% 18.1%  
Total levies at the border 1,355  1,266  1,455  1,617 1,608 1,469  
 % of importsb 27.1%  28.5%  27.4%  30.3% 28.4% 23.0%  
Total government revenue 1,940  2,049  1,949  2,095 2,253 2,800  
 % of current go vernment revenue 70.1%  61.8%  74.7%  77.2% 71.3% 52.5%  
n.a. Not available. 
a Estimates. 
b Imports released for consumption only. 
Source: Customs, Directorate-General of Taxation (DGI). 
3.1.4.1  Applied MFN tariff 
3.30.  The 2015 Malagasy most-favoured-nation (M FN) tariff comprises 6,512 eight-digit lines from 
the 2012 version of the Harmonized Commodity Description and Coding System (HS). 
The tax base for the MFN tariff is c.i.f. value. Most rates are ad valorem; the rates are either 0%, 
5%, 10%, or 20%. Overall, the simple average of all applied rates fell to 12.2% in 2015; it was 13% in 2008 (Table 3.3); the average is 14.4% on agricultural products (WTO definition), 
and 11.8% on the non-agricultural products (excluding petroleum products). 
3.31.  Almost 43% of tariff lines are subject to  a 20% customs duty. The sectors most protected 
from external competition include beverages, fisheries products and textiles (Chart 3.1): such a level of tariff protection does not encourage efforts to make these products competitive for 
export. Similarly, agrifood products account for a large share of consumer spending, especially in 
low-income brackets, and high taxation adds to their cost. They are also prominent in spending on agro-industry inputs, with the same consequence of pushing up costs. 
3.32.  The tariff still shows negative escalation from raw materials (average protection level 
of 12.3%) to semi-finished products (average of 10.3%), with agricultural raw materials being more protected from outside competition than Madagascar's semi-finished exports. Many 
producers complain that this tariff structure drives up their production costs because imported 
inputs are taxed more heavily than the products th ey sell. (Section 4.6.2). Recent cuts in customs 
duties on agro-industrial inputs show that the authorities are aware of this problem. This tariff structure perpetuates the need for duty and tax concessions to investors, including under the ZEF 
regime (Section 3.2.3). 
Table 3.3 Breakdown of MFN rates, 2008 and 2015 
 2008  2015 Bound rates 
of dutya 
1. Bound tariff lines (% of total lines) 29.1  30.3 30.3  
2. Simple average applied MFN rate 13.0 12.2 27.5 
 Agricultural products (WTO definition) 14.4  14.4 30.0  
 Non-agricultural products (WTO definition) 12.7 11.8 25.1 
 Agriculture, hunting, forestry and fishing (ISIC 1)  13.9 14.1 30.0  
 Mining and quarrying (ISIC 2) 7.1 7.0 unbound  
 Manufacturing (ISIC 3)  13.0 12.2 26.9  
3. Duty-free tariff lines (% of all tariff lines) 2.0 5.5 0.1 
4. Simple average rate (dutiable lines) 13.2  12.9 27.5  
5. Non- ad valorem  tariffs (% of all tariff lines) 0.3 0.3 0.0 
6. Non- ad valorem  tariffs with no AVEs (% of all lines)  0.3 0.1 0.0  
7. Tariff quotas (% of all tariff lines) 0.0 0.0 0.0 WT/TPR/S/318 • Madagascar 
 
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   2008  2015 Bound rates 
of dutya 
8. Domestic tariff peaks (% of all tariff lines)b 0.0 0.0 0.0  
9. International tariff peaks (% of all tariff lines)c 42.5 42.7 27.8 
10. Overall standard deviation of applied rates 6.4  7.1 5.8  
11. "Nuisance" applied rates (% of all tariff lines)d 0.0 0.1 0.0 
a The final bound rates are based on the 2014 Customs Tariff in the 2012 HS nomenclature. 
b Domestic tariff peaks are duties exceeding thr ee times the overall simple  average applied rate. 
c International tariff peaks are duties exceeding 15%. d Nuisance duties are rates that are not 0 but less than or equal to 2%. 
Note: The 2015 tariff consists of 6,511 tariff lines (eig ht-digit, in accordance with the HS12 nomenclature). 
 The 2008 tariff consists of 6,362 tariff lines (eight -digit, in accordance with the HS07 nomenclature). 
Source: WTO Secretariat calculations based on data prov ided by the authorities; and WTO Consolidated Tariff 
Schedules (CTS) database. 
Chart 3.1 Applied MFN and IEPA tariff rates, by product group (WTO), 2015 
02468101214161820
1 2 3 4 5 6 7 8 9 1 01 11 21 31 41 51 61 71 81 92 02 12 22 32 4%
1 Agriculture
2 Products of animal origin
3 Dairy produce
4 Fruit, vegetables, garden produce
5 Coffee, tea
6 Cereals and other preparations
7 Oil seeds, fats and oils8 Sugar and sugar confectionery
9 Beverages and tobacco
10 Cotton
11 Other agricultural products
12 Non-agricultural products
13 Fish and fish products
14 Metals and minerals15 Chemicals
16 Wood, paper, etc.
17 Textiles
18 Articles of apparel19 Leather, footwear, etc.
20 Non-electrical machinery
21 Electrical machinery
22 Transport equipment
23 Other manufactured articles n.e.s.
24 PetroleumMFN
IEPA
Average
IEPA rate
(9.3%)Average 
applied rate
(12.2%)
 
Note: Interim Economic Partnership Agreement (IEPA). 
Source: WTO Secretariat calculations based on data provided by the authoritie s, and WTO CTS database. 
3.33.  The 19 lines corresponding to petroleum and gas products are the only non- ad valorem  
lines, and this reduces transparency and increa ses administrative costs. These products are 
characterized by a broad range of trade measures including: temporary suspension (since 2011) of part of the tax on petroleum products (TPP, which replaces the customs duty on these products) to 
help keep prices low; administrative pricing, th e grant of a preferential exchange rate to oil 
companies; and direct subsidies to oil companies to enable them to compress their selling prices. The authorities are aware of the urgent need to review these measures. 
3.34.  Moreover, the TPP ad valorem  equivalents furnished by the authorities are particularly 
high for premium gasoline (HS 27101212): the 21.2% ad valorem  equivalent rate 
warrants examination given the strategic importance  of this product to the Malagasy economy. 
Yet, the State considers it as a luxury product compared to diesel fuel (Table 3.4). WT/TPR/S/318 • Madagascar 
 
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  Table 3.4 Estimated non- ad valorem  duties 
Tariff line Product description  Specific duties 
2015 Ad valorem  equivalent 
2014 
(%) 
27101211  - Aviation fuel  MGA 105/litre  2.6 
27101212  - Premium gasoline with a 95 octane rating and ove r MGA 390/litre  21.2 
27101213  - Regular gasoline with an octane  rating of at least 90  MGA 390/litre  0.1a 
27101214  Spirit-type jet fuel  MGA 157/litre  n.a. 
27101215  - White spirit  MGA 37/litre  1.3 
27101219  - Othe r MGA 37/litre  2.2 
27101921  - Kerosene MGA 10/litre  0.5 
27101922  - Blended fuels  MGA 37/litre  n.a. 
27101923 - Kerosene-type jet fuel  MGA 10/litre  0.5 
27101929 - Othe r MGA 37/litre  0 
27101931 - Diesel fuel MGA 120/litre  6.3 
27101932 - Fuel oil MGA 20/litre  1.3 
27111100 - - Natural gas  MGA 12/kg. net  n.a. 
27111200 - - Propane MGA 12/kg. net  0.1 
27111300 - - Butane MGA 15/kg. net  0.4 
27111400 - - Ethylene, propylene, butylene and butadiene  MGA 12/kg. net  n.a. 
27111900 - - Other  MGA 12/kg. net  n.a. 
27112100 - - Natural gas  MGA 12/kg. net  n.a. 
27112900 - - Other  MGA 12/kg. net  n.a. 
n.a. Not available. 
a 2013. Source:  Information provided by the authorities. 
3.1.4.2  Bindings 
3.35.  Altogether 30.3% of Madagascar's tariff lines is currently bound.18 This percentage 
encompasses all lines relating to agricultural products (as defined in Annex I to the WTO Agreement on Agriculture) that have been bound by Madagascar at the ceiling rate of 30%. In contrast, only certain non-agricultural products corresponding to 502 tariff lines, or 11.2% 
of the total, have also been bound at the rate of 30%; these are chemicals (HS Chapters 28 
and 29). The other products are not bound. 
3.36.  Some of these tariff concessions predate the Uruguay Round, going back to the time when 
Madagascar was a French colony. Indeed, when acceding to the GATT in September 1963, 
Madagascar had opted, in virtue of GATT Article XXVI:5(c), to inherit concessions made by France while it was a French colony.
19 Whereas the old concessions regarding agricultural products were 
subsequently renegotiated under the Uruguay Ro und and therefore no longer apply, the old 
concessions pertaining to non-agricultural produc ts still apply; altogether 361 tariff lines were 
bound before the Uruguay Round, at rates of 0, 5, 10, 15 and 30%. For 52 tariff lines covered 
by the old concessions (Table 3.5), the tariffs currently applied by Madagascar are higher than 
the bound rates. 
                                               
18 CTS File of Madagascar, WTO Tariff Analysis Online (TAO), https://tao.wto.org . This application is 
available to the public. Users may register with their emai l address. Select the option " Download Tariffs", then 
"DataExport". Select the bound duties (CTS) and the co untry on the dropdown menu. Madagascar's CTS File in 
HS 2002 can be downloaded in xml or mdb format. The most recent CTS File for Madagascar is in HS 2002. The changes in the HS 2007 were approved during the multilateral review of July 2014 (G/MA/TAR/RS/362). 
Madagascar has meanwhile adopted the HS 2012 classifi cation, and the share of bound lines in the 2013 
applied tariff has moved from 29.1% to 30.3% , according to Secretariat estimates. 
19 Viewed at:  
http://sul-derivatives.stanford.edu/derivative?CSNID=90100039&mediaType=application/pdf . WT/TPR/S/318 • Madagascar 
 
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  Table 3.5 Tariff lines with applied MFN ta riffs higher than the bound rates, 2015 
No. Tariff line Description 
Applied 
MFN tariff 
Bound rate 
1 27101212 - - - Premium gasoline with a 95 octane rating and ove r EAD 21.2 
(MGA 390/litre) 5 
2 27101931 - - - - Diesel fuel EAD 6.3 
(MGA 120/litre) 5 
3 27101933 - - - - Lubricating oils and lubricants  20 5  
4 27101939 - - - - Othe r 20 5 
5 27102000 - - Petroleum oils or bituminous mineral oils  20 5  
 3210 Other paints and varnishes; pigments    
6 32100090 - - - Othe r 20 15  
 3406 Candles, tapers and the like    
7 34060010 - - - - Hand-made 20 15  
8 34060020 - - - - Othe r 20 15 
9 34060090 - - - Othe r 20 15  
 4407 Wood sawn or chipped lengthwise, of a thickness exceeding 6mm    
 440710 - - Coniferous   
10 44071010 ---Pinewood 5 0 
11 44071090 ---Othe r 5 0  
 441520 - Pallets, box pallets and other load boards    
12 44152010 - - - Hand-made 20 0  
13 44152090 - - - Othe r 20 0 
14 53109010 - - - Woven fabrics of jute 20 15  
15 53109020 - - - Paka fabrics (Urena) 20 15 
16 53109090 - - - Othe r 20 15  
17 63012000 - Blankets (excluding electric) of wool or animal hai r 20 10 
18 63013000 - Blankets (excluding electric) of cotton  20 10  
 630510 - Of jute or other textile bast fibres of heading 53.03    
  - - - Of woven fabrics of jute    
19 63051011 - - - - New 20 15 
20 63051012 - - - - Used 20 15  
  - - - Of paka fabrics (Urena)    
21 63051021 - - - - New 20 15  
22 63051022 - - - - Used 20 15 
  - - - In fabrics of other textile bast fibres    
23 63051031 - - - - New 20 15 
24 63051032 - - - - Used 20 15  
 64031 - Sport footwea r   
25 64031990 - - - Othe r 20 15  
 64039 - Other footwea r   
26 64039900 - - Othe r 20 15  
 640510 - - With uppers of leather or composition leathe r   
27 64051010 - - - Hand-made 20 15  
28 64051090 - - - Othe r 20 15 
29 64059010 - - - Hand-made 20 15  
30 64059090 - - - Othe r 20 15 
31 72104100 - - Corrugated 20 15  
  - - Sets of assorted articles   
32 82111010 - - - Hand-made 20 10  
33 82111090 - - - Othe r 20 10 
  - - Table knives having fixed blades    
34 82119110 - - - Hand-made 20 10 
35 82119190 - - - Othe r 20 10  
  - - -Other knives having fixed blades    
36 82119210 - - - Hand-made 20 10  
37 82119290 - - - Othe r 20 10 
  - - Knives having other than fixed blades, including pruning knives    
38 82119310 - - - Hand-made 20 10 
39 82119390 - - - Othe r 20 10  
  - - Blades    
40 82119410 - - - Hand-made 20 10  
41 82119490 - - - Othe r 20 10 
  - - Handles of base metal   
42 82119510 - - - Hand-made 20 10 
43 82119590 - - - Othe r 20 10  
44 82121000 - Razors  20 10 
45 82122000 - Safety razor blades, including razor blade blanks in strips  20 10  
46 82129000 - Other parts 20 10 
 8213 Scissors, tailors' shears and similar shears, and blades therefo r   
47 82130010 - - - Hand-made 20 10 
48 82130090 - - - Othe r 20 10  
 8214 Other articles of cutlery    WT/TPR/S/318 • Madagascar 
 
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  No. Tariff line Description 
Applied 
MFN tariff 
Bound rate 
49 82141000 - Paper knives, letter openers, erasing knives, pencil sharpeners and 
blades therefor 20 10  
50 82142000 - Manicure or pedicure sets and instruments  20 10 
51 82149000 - Othe r 20 10  
52 84231000 - Personal weighing machines, including baby scales; household scales  20 10 
Source: WTO Secretariat calculations based on data provided by the authoritie s, and WTO CTS database. 
3.37.  For lines that were the subject of a tariff commitment during the Uruguay Round, 
Madagascar has bound "other duties and taxes" at the ceiling rate of 250%, for all agricultural 
products as well as for chemicals (HS Chapters 28 and 29). In contrast, no other duties and 
taxes were envisioned for the 361 tariff lines that had been bound prior to the Uruguay Round; this is tantamount to a zero binding for these lines. 
3.1.4.3  Tariff preferences and rules of origin 
3.38.  As stated in Section 2.2, Madagascar grants duty-free entry for all products originating in 
the IOC, COMESA, and the SADC with the exceptio n of one product category (E) (determined by 
each member country), which is excluded from preferential treatment (Table 3.6). Moreover, 
since 1 January 2014, products originating in the European Union imported by Madagascar have been accorded preferential treatment (Chart 3.1)  in keeping with a tariff reduction timetable. 
3.39.  Madagascar has not introduced any rules of origin for non-preferential purposes. 
Instead, four different systems of preferential rule s of origin have been created for the purpose of 
administering the tariff preferences granted to products originating in the roughly 50 countries members of preferential trade agreements to which Madagascar is party. There have recently been 
many calls for the harmonization of preferential rules of origin, insisting on the fact that the 
observance of rules of origin involves additional costs to enterprises, possibly as much as 6% of 
the value of a product, and that in general, the usefulness of a free trade agreement depends 
largely on the simplicity of its rules of origin. 
3.40.  The IOC rules of origin are the following: either the products are wholly obtained in the IOC; 
or they have undergone sufficient processing or working there (value-added in the IOC of more than 35% of the ex-factory price of the product,  or percentage of imported raw materials not 
exceeding 60% of this value). Nevertheless, products originating in Réunion are currently treated 
in the IEPA framework, and exporters from other IOC countries have the choice of following COMESA rules of origin. 
3.41.  COMESA origin may be conferred on produc ts shipped directly from one Member State to 
another if those products are: (1) wholly obtained in the COMESA Member State
20; or wholly 
or partially manufactured in the Member State from materials imported from outside the 
Member States, or of indeterminate origin, in accordance with a manufacturing process that 
involves a substantial transformation. The latter is defined by: (2) a c.i.f. value of the imported materials not exceeding 60% of the total cost of the materials used in the production of the goods; or (3) an ex-factory value-added resulting from the production process that accounts for at least 
35% of the ex-factory cost of the goods (value -added is defined as the difference between the 
ex-factory cost of the finished product and the c.i. f. value of material inputs imported from outside 
the COMESA subregion) or 25% for goods on a list drawn up by the COMESA Council as being 
of particular importance for the economic develo pment of Member States; or (4) if they result 
from processing that leads to a change of tariff heading. 
                                               
20 For example, minerals extracted from the soil or seabed and products of agriculture, fishing or 
hunting, or manufactured wholly from thes e products, without imported inputs. WT/TPR/S/318 • Madagascar 
 
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  Table 3.6 Madagascar's list of exclud ed products in the SADC framework 
HS Code Description Category Customs 
duty 
17.01 Cane or beet sugar, and chemically  pure saccharose, in solid form   
1701.11 90 - - - Other E 20% 
1701.12 90 - - - Other E 20% 
1701.91 00 - - Containing added flavouring or colouring  E 20% 
1701.99 90 - - - Other E 20% 
17.02 Other sugars, including lactose, maltose, glucose and fructose    
1702.11 00 - - Containing by weight 99% or more lactose E 10% 
1702.19 00 - - Other E 10% 
1702.20 00 - Maple sugar and maple syrup E 10% 
1702.30 90 - - - Other E 10% 
1702.40 90 - - - Other E 10% 
1702.50 90 - - - Other  E 10% 
1702.60 90 - - - Other  E 10% 
1702.90 00 - Other, including sugar E 10% 
17.03 Molasses resulting from the extraction or refining of sugar   
1703.10 00 - Cane molasses E 10% 
1703.90 00 - Other  E 10% 
27.10 Petroleum oils and oils obtained from bituminous minerals, other 
than crude    
2710.11 11 - - - Aviation fuel  E 105/L 
2710.11 12 - - - Premium gasoline with a 95 octane rating and over  E 390/L 
2710.11 13 - - - Regular gasoline  with an octane rating of at least 90  E 390/L 
2710.11 14 - - - Spirit-type jet fuel  E 157/L 
2710.11 15 - - - White spirit E 37/L 
2710.11 19 - - - Other  E 37/L 
2710.19 21 - - - - Kerosene E 10/L 
2710.19 22 - - - -  Blended fuels  E 37/L 
2710.19 23 - - - - Kerosene-type jet fuel  E 10/L 
2710.19 29 - - - - Other  E 37/L 
2710.19 31 - - - - Diesel fuel E 120/L 
2710.19 32 - - - - Fuel oil E 20/L 
2710.19 33 - - - - Lubricating oils and lubricants E 20% 
2710.19 34 - - - - Oils used in lubricating oils and lubricants  E 5% 
2710.19 39 - - - - Other  E 20% 
2710.91 00 - - Containing polychlorinated or polybrominated biphenyls, or terphenyls  E 5% 
2710.99 00 - - Other  E 5% 
27.11 Petroleum gases and other gaseous hydrocarbons    
2711.11 00 - - Natural gas  E 12/Kg 
2711.12 00 - - Propane  E 12/Kg 
2711.13 00 - - Butanes  E 15/Kg 
2711.14 00 - - Ethylene, propylene, butylene and butadiene  E 12/Kg 
2711.19 00 - - Other  E 12/Kg 
2711.21 00 - - Natural gas  E 12/Kg 
2711.29 00 - - Other  E 12/Kg 
Source: Protocol on trade in the SADC. 
3.42.  According to Annex I to the SADC Trade Protocol on rules of origin, the basic requirements 
f o r  g o o d s  t o  b e  r e g a r d e d  a s  " o r i g i n a t i n g "  a r e  a s  f o l l o w s :  t h e  p r o d u c t  m u s t  h a v e  b e e n  w h o l l y  
obtained in one of the Parties21; or the non-originating materials incorporated in the product must 
have undergone "sufficient working or processing" in accordance with the conditions set out in Appendix I of Annex I, which lists specific product-by-product criteria
22; or the value of all 
non-originating materials must not exceed 10% of the ex-works price of the good. 
3.43.  The IEPA offers a fourth set of rules of origin and of certification procedures and obligations, 
contained in Protocol 1 thereto.23 It lists the general requirements for a good to be considered as 
originating in the European Union or in the Eastern and Southern Africa Group (AfOA). Despite 
                                               
21 Article 4 specifies the type of goods that can be re garded as being wholly pr oduced in Member States. 
It gives a list of the products in this  category and establishes the criteria that a vessel must satisfy for it to be 
regarded as forming part of th e territory of a Member State. 
22 WTO document WT/REG176/4 of 12 March 2007. 
23 Annex 2 to Protocol 1 to the Agreement, viewed at: 
http://eur-lex.europa.eu/resource.html?uri=cellar:75184c8b-f721-4002-87c8-
e301d4adef11.0002.01/DOC_2&format=PDF . WT/TPR/S/318 • Madagascar 
 
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  their complexity, these new rules make it possible to use more raw materials not originating in the 
AfOA, in particular in the textiles and clothing in dustry, and this could facilitate Malagasy exports 
(Section 4.6). 
3.1.4.4  Internal import taxes 
3.1.4.4.1  Tax on intermittent income (IRI) 
3.44.  According to the General Tax Code (Article 01.01.05), any sale, including importation, 
of goods by persons with no NIF registration gives rise to the assessment of the IRI at a rate 
of 5% of the c.i.f. value of the goods sold. Acco rding to the Customs, in 2014 this tax was levied 
on 2.1% of the value of imports, but 18% of customs transactions. In addition to its cost in terms 
of cash and administration, this tax is not refund ed when the importer finally obtains an NIF, and 
is not tax-deductible. This levy should be reviewed. 
3.1.4.4.2  Value-added tax (VAT) 
3.45.  Madagascar applies VAT. The standard rate was reduced from 20% to 18% in 2005, then 
restored to 20% in 2008. Legislation regarding VAT in 2014 is available on the DGI website.24 
According to the authorities, VAT is levied in the same manner on goods for home consumption, 
irrespective of their origin, whether imported or not. The tax base for imports is the customs value plus duty and other taxes where applicable (apart from VAT itself), whereas that for local goods is 
the sale price plus other taxes, where applicable. 
3.1.4.4.3  Excise duty and other levies 3.46.  Excise duty is levied on many products  to generate tax revenues or to discourage the 
consumption of certain products considered as harmful. The rates are as follows: 
 beer: MGA 250/litre; 
 wine: from 50% to 200%; 
 other alcoholic beverages: from 50% to 250% for the ad valorem  tariff and from 
MGA 75/litre to MGA 1,450/litre for the specific rate; 
 cigarettes and other tobacco: 50% to 325%; 
 imported second-hand motor vehicles: 10%; and 
 mobile telephone services: 7%. 
3.47.  Perfumes and cosmetics were being taxed at the time of the previous review, but this is no 
longer the case because, according to the authorities, the receipts were negligible. Cigarette lighters were temporarily subject to excise du ty between 2010 and 2014. The other taxes that 
were being levied on sugar, wheat and meslin flour, and chemical matches have been eliminated 
since the 2008 Finance Law. In 2014, all imported motor vehicles were subject to a 10% excise duty. 
3.48.  The tax base for locally manufactured products is the price charged to third parties at the 
place of production, whereas that for imports is th e c.i.f. customs value plus duty (but not VAT). 
The differences between excise duties applied to imported and local products have been eliminated 
for the most part. The only remaining ones are described in the Table 3.7. 
                                               
24 Viewed at: http://www.impots.mg . WT/TPR/S/318 • Madagascar 
 
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  Table 3.7 Differences in excise duty on local and imported products, 2014 
(%, unless otherwise indicated) 
Products Local products Imported products 
Second-hand motor vehicles Exempt 10 
Spirits obtained by distilling grape wine or grape marc 
(HS 22 08 20) MGA 430/litre 230 
Whiskies (HS 22 08 30) MGA 1,450/litre 250 
Rum and tafia (HS 22 08 40) MGA 75/litre 230 
Gin and Geneva, vodka, and other spirits (HS 22 08 50) MGA 430/litre 230 
Vodka (HS 22 08 60) MGA 430/litre 230 
Liqueurs (HS 22 08 70) MGA 430/litre 230 
Other (HS 22 08 90) MGA 430/litre 230 
Source: General Tax Code 2014, viewed at: http://www.impots.mg/cgi0809.php . 
3.1.4.5  Duty and tax exemptions and concessions 
3.49.  Most of the machinery and equipment as well as certain inputs used in agricultural 
production are exempt from customs duty and VAT. Moreover, some staple goods such as rice and 
kerosene, whether imported or produced locally, are also exempt from customs duty and VAT.25 
These exemptions are also stipulated in the Customs Tariff. 
3.50.  In value terms, some two-thirds of the re venue shortfall recorded owing to exemption from 
customs duty and VAT on imports concern companies whose activities are governed by the 
Law on Large-Scale Mining Investment, the Esta blishment Agreement between the Malagasy State 
and the company QMM, or the Petroleum Code (Sec tions 4.5 and 4.6). The second item is that 
of concessions granted on a discretionary basis by the Council of Ministers, representing 14% 
of foregone revenue. 
3.1.5  Prohibitions, quantitative restrictions and licensing 
3.51.  The main legislation on prohibition and other import restrictions dates from 1992, and has 
been notified to the WTO.26 It sets out the items subject to prohibition, quantitative restrictions 
and other controls, for reasons of security, morals, etc. In particular, Madagascar applies prohibitions and licensing under multilateral agreements to which it is party, including those on the 
environment (e.g. plastic bags since February 2 015). The Customs website contains the updated 
list of them. The few measures apparently in plac e to protect local industry from competition from 
imported products include restrictions on imports of diamonds, gemstones, gold and platinum 
jewellery, vanillin, as well as leaf tobacco (Section 4.1.2.5). 
3.1.6  Contingency measures 3.52.  Madagascar does not have any contingency measure legislation and has not communicated 
with the WTO Secretariat on the subject. Howeve r, an entity called the National Authority for 
Trade Remedies was set up in 2014 (Table 2.1). 
3.2  Measures directly affecting exports 3.53.  In-depth review of the export regime is a priority. Most of the export legislation dates back 
to 1988 and 1992.
27 The burgeoning number of documentar y and procedural requirements over 
the years, each for a fee, has made exporting g oods from Madagascar into an uphill struggle. 
This in part explains why exports accounted for just 18% of GDP in 2013, and for 12% when 
mining products are excluded. 
                                               
25 For example, day-old chicks, some other live animals, seed, staple grains, rice, medicinal products; 
pharmaceutical articles, equipment for medical use, cont act lenses, spectacle lenses, and corrective lenses and 
propane gas; agricultural inputs (f ertilizer, insecticides, fungicides, herbicides); newsprint, newspapers, 
magazines, books, brochures and printed matter. 
26 Decree No. 92-424 of 3 April 1992 regulating merchandise imports and exports. WTO documents 
G/LIC/N/3/MDG/1 of 9 September 2002, G/LIC/N/ 3/MDG/2 of 21 June 2005, and G/LIC/N/1/MDG/3 
of 23 September 2014. 
27 Ordinance No. 88-015 of 1 September 1988 relating to export policy, Decree No. 88-327 of 
1 September 1988 establishing implementation procedures for Ordinance No. 88-015. WT/TPR/S/318 • Madagascar 
 
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  3.54.  Apart from the main problems affecting export production, which include difficulties relating 
to goods transport (Section 4.7) and access to energy (Section 4.5.3), as well as lending rates close to 25% (Section 4.10), numerous tax, foreign exchange and administrative hurdles - of which the main ones are listed below – could be usefully reviewed so as to facilitate 
the export process. A reform in which all regulati ons affecting exports are reviewed for their effect 
on the competitiveness of export companies would undoubtedly help eliminate a good deal of overlapping, duplication, outdated regulations and other obstacles to exports while observing 
the legislation in place. 
3.55.  These problems in part explain the range of duty and tax concessions and other financial 
benefits offered under the ZEF regime (Section 2.3.2) or under the large-scale mining investment regime, the provisions of which attempt to respond to the many problems confronting producers 
and exporters. 
3.2.1  Export prohibitions and other restrictions 3.56.  Export prohibitions arise from the main legislation governing export controls, which dates 
back to 1992.
28 It is forbidden to export archaeological or historical objects or certain species 
of fauna and flora covered in Appendices I and II of the CITES Convention, including medicinal 
plants. Rice exports are "suspended".29 Sugar exports were suspended between 2011 and 2012 
(Section 4.6.2.1). Export quotas for crabs were introduced in 2014 (Section 4.3.2). According to 
the authorities, exports of scrap metal and of aluminium and copper waste and scrap have been 
prohibited in order to discourage the theft of cabling and rails. Madagascar has also prohibited all exports of rough and semi-finished wood since July 2007.
30 Nevertheless, illegal exports 
of rosewood and palisander had still not been effectively stopped in October 2014. The customs 
computer system could include products subject to prohibition. There were in fact measures in place in 2015 (concerning rice, for example), of which the Customs had not been informed and 
which it was therefore not enforcing. 
3.2.2  Export procedures 3.2.2.1  Reimbursement of VAT credits 
3.57.  One of the main problems mentioned by exporting companies in 2014 was the 
non-reimbursement of VAT credits. Exports benefit from the zero-rate VAT regime, which in principle gives entitlement to the refund, within 60 days, of duties and taxes levied on the inputs 
used to produce them, the latter being subject to VAT. In practice, however, most large companies 
(including foreign companies operating under the ZEF regime) complain of never recovering their 
VAT credits owing to budget problems. According to the authorities, the solution whereby these reimbursements would be deducted from amounts subsequently owed in the form of corporate 
income tax is not acceptable, as VAT credits cannot be allocated for the settlement of charges of a 
different nature. 
3.2.2.2  Exchange rate regime 
3.58.  The second problem most often mentioned in 2014-2015 was the difficulty of obtaining 
foreign currency in a timely manner in order to import the inputs needed for export production. The private sector reported delays and ever more complications with their foreign currency applications in 2015. 
3.59.  On the export side, the foreign exchange regime, which does not apply to ZEFs, requires the 
repatriation of foreign assets, which must be domiciled with banks or other authorized intermediaries.
31 The document to which this gives rise, the foreign currency repatriation 
commitment and declaration (EDRD), could be replac ed by the simple submission of the original 
invoice to the bank, which would help reduce red tape. The foreign currency must still be 
                                               
28 Decree No. 92-424 of 3 April 1992. 
29 Decree No. 2011-122 of 7 March 2011. 
30 Interministerial Order No. 10885/2007 of 3 May 2007. 
31 Circular No. 005 of 30 June 1994. Online information (on the exchange rate regime) from the BCM, 
viewed at: http://www.banque-centrale.mg . WT/TPR/S/318 • Madagascar 
 
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  repatriated within a period of 90 days, however. By contrast, ZEFs are not subject to the banking 
domiciliation requirement. 
3.60.  Until August 2014, exporters operating under the ordinary law regime could nonetheless 
keep their export earnings in foreign currency accounts held with local banks. This to some extent 
protects them from the risk of depreciation of the national currency, and guarantees them access 
to foreign currency up to the amount of their deposits. A requirement to surrender 10% of the value of export receipts in foreign exchange was nevertheless introduced in August 2014 
(Section 1.2); it does not affect ZEFs. 
3.61.  Another advantage of ZEFs compared to companies working under the ordinary law regime 
is the possibility of holding export receipts in fo reign banks, and total freedom of transfer abroad 
(of dividends, profits, wages and salaries, licence fees, royalties and other fees, technical 
assistance fees, and income from movable or immo vable property). In practice, the ZEFs are free 
to maintain foreign currency accounts in foreign banks abroad and to pay their employees' salaries there, thus enjoying a degree of flexibility not available to other companies. 
3.2.2.3  Export documentation and controls 
3.62.  Under the Customs Code (2014), goods bein g exported must be the subject of a detailed 
export declaration. The Customs justifies this obligation as necessary for customs control 
purposes, for verifying the conformity of goods with  respect to prohibition rules; for indicating the 
customs regime assigned to goods, for providing the basis for invoices domiciled under the rules 
governing the foreign currency repatriation requirement, and for statistical purposes. 
3.63.  This operation calls for the submission of  extensive paperwork, which it is planned to 
dematerialize: the commercial invoice, for example, must be prepared in five copies and in foreign 
currency, and after being physically domiciled with a local bank (see above), must first be stamped by the line ministries concerned with the export product should it require authorization (forestry 
and mining products, handicraft (certified as  hand-made), and environment-related products 
(CITES)). This measure is applied to determine whether the goods declared correspond with the invoice and those mentioned in the authorization; but it considerably slows down and increases the 
cost of the export process, as in practice it requires at least one physical visit to these ministries. 
3.64.  According to the authorities, there has been  some simplification in respect of the numerous 
other documents required from exporters – the bu siness tax payment card was eliminated in 2008 
and the statistical identification card has re portedly been abolished. The website of the 
International Trade Board of Madagascar (ITBM) has not yet been updated accordingly.
32 
The following three documents, each of which must be renewed for a fee and by means of administrative procedures, could usefully be harmonized: 
 the tax card containing the NIF by which to identify the taxpayer and ascertain the 
taxpayer's tax situation; 
 registration in the Commercial Register; and 
 the professional identity card for self-emp loyed foreigners (CIPENS, Section 2.3.5). 
3.65.  The Quality and Packaging Division (SQC) in the Ministry responsible for trade issues 
a certificate of inspection of packaging and origin  (CCCO) for the exportation of pre-packaged food 
products and agricultural products of plant origin.
33 Currently, the only mandatory export 
production controls covering mainly vanilla and coffee, spices, fruit and vegetables, examine the 
commercial quality of products, in particular their physical and chemical quality and packaging, based on existing technical regulations; they  do not address SPS aspects, however. CCCO 
applications are already possible online via MIDAC, but the cost is high (0.5% of the f.o.b. value 
of the invoice). 
3.66.  One prerequisite for obtaining the CCCO for plant products is first obtaining a phytosanitary 
certificate, issued free of cost by the Ministry of Agriculture's Plant Protection Directorate (DPV). 
It is not yet linked up with the MIDAC, which would speed up the export process. Moreover, to 
                                               
32 Viewed at: http://www.itbm.mg/index.php/informations/faq . 
33 Decree No. 2006-681 of 12 September 2006 regulating the inspection of packaging. WT/TPR/S/318 • Madagascar 
 
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  carry out SPS controls more effectively, the author ities have expressed the need for one or several 
laboratories, as testing for contaminants (e.g. aflatoxins, pesticides) is not yet being done in Madagascar. Laboratories of this kind would make it  possible to test for residues and better ensure 
that Madagascar's agricultural exports meet intern ational standards. The difficulty of fulfilling these 
standards is a major constraint on exporters (Section 3.3.1). 
3.67.  To obtain the CCCO for animal products, sanita ry certificates must be issued by the official 
veterinarians at export inspection posts, being re sponsible for monitoring and controlling approved 
establishments/vessels/warehouses and the only authority empowered to sign the certificates. 
In some cases these certificates are free of cost (for example, for fisheries products), in others, they are costly: export permits and health certific ates for animal products (honey, meat, etc.) cost 
2% of the f.o.b price of the exported goods, which raises the cost by that amount. The veterinary 
service could be rapidly linked up with MIDAC so that certificates are no longer issued manually. 
3.68.  Other bodies currently require exporters to pay for quality tests. Dedicated control bodies 
for wood and mining products issue quality certificates, which may cost up to 4% of the 
f.o.b. value of the exported products. 
3.69.  Hence, there is considerable scope for streamlining in the area of documentary and physical 
control for export purposes. Physical inspections should be conducted at single locations by 
multi-disciplinary and interministerial teams in order to save on resources and avoid duplication. 
Furthermore, fees should be calculated on the basi s of the value of the service provided and not in 
proportion to the value of the exports. 
3.2.2.4  Export taxes 
3.70.  According to the authorities, Madagascar does not levy export taxes. Nevertheless, the 
above-mentioned charges (CCCO, cert ificates, permits) and the entire  range of levies, in several 
cases collected exclusively on exports and in proportion to their value, are de facto export taxes. 
These taxes are described in Section 4 in relation to gold and mining products, wood, essential oils 
and other forestry products, crocodile skins and other wildlife products. 
3.71.  GasyNet's charges (Section 3.1.2.2) are 0.5%  of the c.i.f. value of the exports, which not 
only makes them less competitive on export markets, but also runs counter to the principle 
of proportionality of the charge to the value of the service provided, which itself does not vary depending on the value of the goods. Second, as it does for imports, (Section 3.1.2), GasyNet 
charges the ZEFs a more favourable rate for exports, which is a potential source of distortion, 
administrative complications and/or could encourage fraud. Finally, GasyNet levies a third flat rate 
specifically for the Ambatovy and QMM mining companies. 
3.2.3  Free Zones and Enterprises (ZEF) regime 
3.72.  Any regulatory reform of the export regime  should also address the privileges available to 
ZEFs (described in Section 2.3.2), with a view to extending them to the entire economy so as to increase the overall offer. The scale on which these benefits are being fraudulently claimed - by 
several hundred companies in March 2015 - would seem to support this.
34 
3.73.  Indeed, there were over 500 approved ZEFs  in 2015, though less than 150 of them were 
operating, with under 53,000 employees. The numbers have fallen sharply since 2006, when there were 202 free-zone enterprises in operation, with almost 116,000 employees in total. Exports 
under this regime in 2014 amounted to MGA 1,600 billion (about US$500 million) or one-seventh 
of Madagascar's total exports, which consist mainly  of textiles and clothing, followed by shrimps 
and crustaceans, and agro-industrial products. This notwithstanding, several new ZEFs were 
established in 2015 in the textiles and other subsectors producing mattresses, soaps and building 
products. 
                                               
34 According to a study by International Labour Office  (BIT), these investors do not really intend to 
launch any entrepreneurial activity; the sole purpose of the application for authorization is to be able to import goods free of duty (ILO, 2011). WT/TPR/S/318 • Madagascar 
 
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  3.74.  Madagascar had notified this ZEF regime to the WTO in 2001 under the Agreement on 
Trade-Related Investment Measures (TRIMS)35, as it is – in principle – a special scheme under 
which attractive tax, customs, financial and labour benefits are accorded to enterprises that export 
95% of their output. One of the aims of the legislation on ZEFs was to promote and develop 
private investment in production in Madagascar. Many observers are of the view that without this 
regime, which accounts for the bulk of processed goods and services exports, a good portion of the foreign direct investment in Madagascar would not have materialized. 
3.75.  This suggests the need to review and ha rmonize the tax system, as current internal tax 
rates are generally described as very high and cited as the reason why many operators remain in the informal sector. 
3.76.  Sales by ZEFs in the national customs terri tory (up to 5% of their real annual production) 
are subject to MFN import duties and taxes. ZEFs may supply one another. In practice, the goal 
of integrating the production system is hardly  being attained. Three-quarters of the inputs 
purchased by the ZEFs originate abroad, whilst the corresponding figure is 51% for companies 
under ordinary law and 53% for the totality of exporting companies (see also Section 4.6.2.2 
concerning textiles). Generally speaking, the exis tence of two production regimes side-by-side 
accentuates the dualism within the economy in that  it hampers integration between export sectors 
and sectors supplying the domestic economy: high customs duties make local inputs expensive 
and discourage exporters operating under the ZEF re gime from using them, and this in turn even 
further increases the imported input content of exports. 
3.77.  One of the main advantages of ZEFs over  companies working under the ordinary law regime 
is the absence of currency exchange restrictions (Section 3.2.3). The ZEF regime has been 
credited for the export performance of some sectors, for example made-up clothing for the United States market (Section 4.6.2.2) and agri cultural subcontracting for the production of 
vegetables for export. The available benefits contribute to the aim of enhancing business 
competitiveness, but this concerns only export companies, whilst domestic companies or those that have not obtained approval are to some extent left to fend for themselves. The domestic 
value-added generated by the ZEF system would pr obably be higher if the entire economy could 
share in the gains that it provides. 
3.3  Measures affecting production and trade 3.3.1  Standards and technical regulation s, including sanitary and phytosanitary 
standards and regulations 
3.78.  It was necessary in March 2015 to draw up an inventory of all standards and technical 
regulations in force in Madagascar, more particularly those affecting imports and exports, and to 
publish them officially on the Internet. This effort  should be extended to all products potentially 
affecting human and animal health, safety, etc., such as foodstuffs, para-pharmaceuticals, tobacco products, cosmetics, products harmful to the environment, medical equipment, etc. 
3.79.  Such an inventory would pave the way for the introduction, to the extent possible, 
of common authorization procedures for these pr oducts, and this would eliminate the current 
overlapping of functions mainly as regards th e import and export of agrifood products. 
Such streamlining would boost trade without lessening the protection of domestic and foreign 
consumers - quite the contrary. 
3.80.  Apart from the tests carried out by the line ministries concerned (agriculture, livestock, 
forestry and fisheries), all food products or pe rishable items (including additives and sweetening 
matter) are also subject to two other procedur es requiring two different laboratory tests. 
3.81.  A review should be made of national quality control bodies (standardization, certification, 
inspection, testing, metrology) in order to separate regulatory power more clearly from national 
certification bodies or those responsible for enforcing standards, and to better circumscribe their 
respective roles. It is not infrequent today for mandatory standards to be promulgated by some regulatory bodies with no involvement of the Madagascar Bureau of Standards. The review 
                                               
35 WTO document G/TRIMS/N/2/Rev.8 of 19 July 2001. WT/TPR/S/318 • Madagascar 
 
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  of regulations would, amongst other things, enable all regulatory bodies to work hand-in-hand and 
to rely on the relevant standards wh en adopting technical regulations. 
3.82.  Besides, an effort should be made to create or strengthen internal coordination committees 
and other mechanisms – Madagascar has no National TBT Committee (technical barriers to trade), 
for example – in order to properly determine prob lems or risks associated with a given situation 
and decide whether government intervention is  needed and the type of measure required, 
as appropriate. 
3.83.  There is no national accreditation body and no Malagasy entity is currently a member of the 
International Laboratory Accreditation Cooperation (ILAC).36 Madagascar nonetheless cooperates 
with foreign accreditation bodies, in particular the French Accreditation Committee (COFRAC), for the accreditation of official services and/or laboratories, inter alia , so as to ensure that 
Malagasy products meet the international standards set by some importing countries. 
3.3.1.1  Sanitary and phyt osanitary (SPS) measures 
3.84.  Madagascar is a member of the three standard-setting bodies expressly referred to in the 
WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), 
namely the Codex Alimentarius Commission, the World Organisation for Animal Health (OIE) and the International Plant Protection Convention. According to the authorities, the measures taken in 
this regard are based on the international standards developed by these three bodies. 
3.85.  Twelve SPS measures have been notified to the WTO Secretariat since 2007, whereas none 
had been communicated previously. In particular, Madagascar notified measures taken following cases of white spot disease in shrimps and other crustaceans, and to combat bee varroasis.
37 
No specific SPS-related trade concern has been reported by the WTO in connection with 
Madagascar. 
3.86.  In March 2010, Madagascar designated a new SPS notification authority, the Rural 
Development Policy Unit. One of the tasks of the SPS Enquiry Point could be to post the relevant 
Malagasy legislation online on a dedicated website. Table 3.8 contains a list of the main relevant documents. In 2012, the Ministry responsible for livestock and fisheries also endeavoured to draw 
up an inventory of all regulations on sanitary measures in force for imports; this effort should be 
extended to all products that could potentially affect human and animal health.
38 
Table 3.8 SPS legislation relating to pr oduction and international trade, 2014 
Legislation and regulations 
Decree of 24 September 1927 on the repression of fraud in the sale of goods and of falsifications of foodstuffs and 
agricultural products 
Law No. 86-017 ratifying Ordinance No. 86-013 of 17 September 1986 on phytosanitary legislation in Madagascar 
Decree No. 92-284 of 26 February 1992 regulating veterinary pharmacies 
Decree No. 92-285 of 26 February 1992 on animal health policy in Madagascar 
Decree No. 92-424 regulating merchandise imports and exports 
Decree No. 92-473 regulating agro-pharmaceutical products 
Decree No. 93-844 of 16 November 1993 on hygiene and quality of food and products of animal origin 
Order No. 2122/95 of 4 May 1995 on the functioning of the National Commission for the Examination of Applications 
for Marketing Authorization (AMM) for veterinary drugs in the territory of the Republic of Madagascar  
Order No. 7707/97 of 29 August 1997 prohibiting the use of certain veterinary drugs and products 
Decree No. 97-1109 of 4 September 1997 on the approval of the various establishments engaged in the slaughter of 
animals and the preservation, preparation, processing and tran sport of meat, offal, and foodstuffs of animal origin for 
human consumption 
                                               
36 Online information from Internat ional Laboratory Accreditation Cooperation (ILAC), viewed at: 
http://ilac.org . 
37 OIE animal health information, viewed at: 
http://www.oie.int/wahis_2/public/wahid .php/Countryinformation/Countryreports . Action taken includes: 
(i) Order No. 33423/2010 of 13 October 2010 laying down the health requirements for crustaceans and 
byproducts, and (ii) Order No. 33424/2010 designating the Official laboratory for the epidemio-surveillance of aquatic diseases in Madagascar; and (iii) preventive measures adopted in 2013 under Order No. 7006/2013 laying down the import requirements for crustacean feed. In keeping with OIE guidelines, action was taken in 2012 under Decree No. 2012-559 of 22 May 2012 to combat white spot disease in shrimps introduced into an 
aquaculture farm. Steps were also taken under Decree No. 3669/2010 of 1 March 2010 to combat bee 
varroasis, and notified to the WTO. 
38 Ministry of Livestock (2012). WT/TPR/S/318 • Madagascar 
 
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  Legislation and regulations 
Order No. 7706/2000 11 July 2000 establishing the coding system of the national marketing authorization number 
(National AMM) for drugs and biological products for veterinary use in Madagascar  
Decree No. 2000-975 of 13 December 2000 prohibiting the impo rtation of animal meal and of any food containing it, 
for use as animal feed  
Decree No. 2004-040°of 20 January 2004 authorizing the importation of female bovine animals into Madagascar 
Decree No. 2004-041 of 20 January 2004 establishing the regime applicable to the importation and exportation of 
animals, products and foods of animal origin, and grain and fodder for use as animal feed 
Order No. 2088/2005 of 24 March 2005 on controls at importation of female bovine animals into Madagascar  
Decree No. 2005-375 establishing the Fisheries Health Authority  
Law No. 2006-030 of 24 November 2006 on livestock-breeding in Madagascar  
Order No. 4196/06 prohibiting the importation, sale and use of some pesticide active ingredients in agriculture 
Order No. 2908/2007 laying down specific hygi ene rules for fisheries products for export  
Order No. 2910/2007 on the hygiene of foodstuffs of anim al origin specific to fisheries products for export  
Order No. 6235/2009 laying down the official microbiological criteria and sampling plan applicable to fisheries and 
aquaculture products for human co nsumption intended for export 
Decree No. 2010-1009 regulating the production, control, certification and marketing of seed 
Law No. 2011-002 containing the Health Code 
Interministerial Order No. 45555/2011 prohibiting the importation, distribution, sale, use and production of some 
pesticide active ingredients in agriculture and of industrial chemicals 
Interministerial Order No. 28482/2011 on sanitary control measures for certain substances and residues in plants and 
plant products for human consumption intended for export  
Order No. 29179/2011 of 7 October 2011 designating the authority responsible for the phytosanitary inspection and 
certiﬁcation of plants and plant products for human consumption intended for export 
Order No. 6814/2013-MSANP regulating food supplements 
Decree No. 2013-260 of 9 April 2013 on the organization an d operation of the Food Safety and Quality Monitoring 
Agency (ACSSQDA). 
Source: Malagasy authorities. 
3.87.  Since 2005, the task of the Food Safety  and Quality Monitoring Agency (ACSSQDA) has 
been to ensure that food consumed, distributed,  marketed or produced in Madagascar complies 
with the safety standards. It has a network of seven food control laboratories and delivers 
certificates of "fitness for consumption" or conformity for every batch of foodstuffs produced or imported, before it is put on the market.
39 The ACSSQDA also conducts analyses and inspections 
of establishments. The Agency's organization and functioning have been undergirded by the 
adoption of the new Health Code in 2011 and by  Decree No. 2013-260, which introduced changes 
in that regard, inter alia: the inclusion in its Board of Directors of three new members from the 
three ministerial departments concerned (agricultu re, livestock and fisheries) and the addition 
of food quality analysis and control and legal affairs divisions to its structure, and the adoption 
of new provisions covering detected cases of fraud. 
3.88.  An Interministerial Task Force was set up in 2013 with EU support in order to buttress 
Madagascar's food safety system and review the draft Food Law drawn up in 2008 with the 
support of the FAO.40 The Task Force brings together the competent health authorities, the 
Madagascar Bureau of Standards (BNM), the National Codex Alimentarius Committee (in existence since 2005), the Standards and Quality Division in the Ministry responsible for trade, official 
testing laboratories, and representatives of the agrifood sector, the Chamber of Commerce and 
Industry and of agricultural producers' organizations. 
3.89.  SPS control measures for products imported into Madagascar are the responsibility 
of a number of entities that report to several ministries (agriculture, trade, livestock, higher 
education with responsibility for nuclear science and technology, fisheries and health), and this suggests that there is scope for streamlining to facilitate trade. More specifically: 
 The Plant Quarantine Division (SQV) in the Ministry of Agriculture controls the 
importation of live plants, seed and parts of live plants, as well as plant products, soil and growing media, and packaging of plant ma terial. It issues the phytosanitary permit 
required for importation. 
 The Directorate of Veterinary Services (DSV) in the Ministry of Livestock controls the 
importation of terrestrial and aquatic animal products (in collaboration with the Ministry responsible for fisheries resources) and genetic materials of animal and plant 
                                               
39 Statement of the reasons for the new 2011 Health Code, viewed at: 
http://fmcmada.info/AVRIL2012/codesante.pdf . 
40 Interministerial Order No. 14293 of 3 July 2013. The programme is called EDES. WT/TPR/S/318 • Madagascar 
 
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  origin and veterinary inputs for use in livestock farming. It approves importing 
companies, authorizes the opening of points of sale for veterinary drugs and some avian veterinary vaccines, and delivers health clearances. 
 A Committee for the approval of agro-pharmaceutical products bringing together 
different ministerial departments and private entities is tasked with approving all 
imported phytosanitary products irrespective of their origin. After the requisite tests, the Committee authorizes import for the purposes of marketing the product concerned. 
The approved products are listed in an official catalogue that is updated annually. 
 The Madagascar Medicinal Product Agency (see below) is responsible for registering, 
inspecting and controlling the quality of drugs for use in human (but not veterinary) medicine, and for drug testing and control, as well as cosmetics containing therapeutic 
substances. 
 The ACSSQDA verifies the quality of all food or perishable products, but not of cosmetics 
and food supplements. 
 The National Institute of Nuclear Science and Technology (INSTN) verifies that all 
imported products are free of radioactive contamination. If the outcome of the analysis is satisfactory, the Ministry responsible for trade issues a certificate of 
non-contamination by radioactivity. 
3.90.  When imported goods arrive, they must be  accompanied by certificates (sanitary and/or 
phytosanitary) issued by the competent authorities in their country of origin. Before the goods arrive, the importer is required to inform the relevant services in the Ministry responsible for 
agriculture and/or livestock. Upon arrival of the goods, the border inspection posts first check the 
documents specifying the content of the import permits issued previously. 
3.91.  The taking of samples for analysis depends on the degree of risk posed by the imported 
product. Foodstuffs imported by supermarkets and/or big companies by sea are generally 
transferred to the capital for customs clearance.  In such cases the containers are unpacked by 
a team comprising the head of the regional vete rinary service, an ACSSQDA representative and 
a trade inspector. Apart from the documentary veri fication done by the veterinarian, two samples 
are taken per imported batch for the following purposes: (i) the first is used for microbiological and/or physico-chemical analyses by the ACSSQDA laboratory; (ii) the second sample is tested by the INSTN laboratory for non-contamination by radioactivity. 
3.92.  Some products must also be quarantined for a period stipulated in the current regulations. 
If import requirements are not met, the border inspection posts may opt for different measures depending on the cases at hand, i.e. the rejection and/or the destruction of the goods if there is 
a major risk, or consignment to ports and airports pending completion of the required 
documentation, in the event of minor risk. 
3.93.  For foodstuffs of plant origin, control at th e border is performed by agents attached to the 
Ministry responsible for trade. The documents ar e first checked, and two samples are then taken 
per imported batch for testing and analysis as described above. If the outcome of the checks is satisfactory, the border control posts issue a vi sa or a release order and the goods proceed to 
a second stage of control by Customs. Minutes of the unpacking procedure will be drawn up by the 
team assigned that responsibility and a copy forwarded to the DSV for their records. 
3.94.  The fact that foodstuffs or perishable items require the taking of at least two samples 
involving as many entities and departments woul d suggest that there is room for streamlining 
without detracting from the quality of the controls . The streamlining of these procedures would be 
much helped by the creation, at the main ports and airports, of infrastructure and equipment shared by all inspection bodies and adapted to sanitary and phytosanitary inspections, quality 
control and certification. The authorities stress that this would require substantial multi-year 
financial support. Currently, in the event of an SPS alert, the relevant ministries take control measures, which are not communicated electronically to the Customs, but instead by internal mail, and this can be very time-consuming. WT/TPR/S/318 • Madagascar 
 
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  3.95.  Following the outbreak of foot-and-mouth disease in Europe, Madagascar banned the 
importation of all live animals and meat and non- sterilized meat products as of the year 2000, 
without specifying any origin.41 Some months later a new order specifically prohibited such imports 
from South Africa as well.42 Although the measures regarding South Africa were relaxed somewhat 
in 2005, no text seems to have abolished these prohibitions for the other countries. Authorization 
to import processed food products from South Africa was decided by the Malagasy veterinary authorities on 13 May 2014 in the wake of the decision taken by the OIE on the matter. 
The authorities have indicated that regulatory measures have been taken to authorize imports 
of animals or products of animal origin from certain EU countries that were affected by foot-and-mouth disease but which have now been officially declared disease-free by the OIE. 
3.96.  The Plant Health Division (SSV) was set up in 2011 within the Plant Protection Directorate to 
ensure that exported plant products meet the health requirements of importing countries, and 
more specifically of the European market, which is the main destination for Madagascar's agricultural exports. This new unit was to become operational in 2015, thanks to support from the 
EDES programme (see below). Under the regulations in place, it is expected to carry out the 
health inspection and certification of food products of plant origin destined for export. 
3.97.  Some companies established in Madagascar and producing food products of animal origin 
have set up the Hazard Analysis and Critical Control Points (HACCP) system internally.
43 
The available information indicates that it is taking a very long time for the competent authorities (DSV or the Fisheries Health Authority (ASH)) to validate the HACCP system set up by agrifood 
companies. Moreover, the cost of setting up the HACCP system appears to be prohibitive to SMEs 
and effectively excludes them from international markets. Some establishments working on food 
products of plant origin are also being requeste d by their importing clients to install the HACCP 
system. 
3.98.  To safeguard access to the EU market, Ma dagascar has had the benefit of European Union 
support under the following three programmes: in 2009-2010, the Better Training for Safer Food in Africa Programme, which was aimed at drawing up a frame of reference for harmonizing the 
system of inspection of agrifood industries in Africa; in 2011, the Pesticides Initiative Programme 
assisted private-sector exporters of fresh fruit and vegetables; and since 2013, the EDES Programme has been targeting the competent auth orities, private enterprises and organizations 
of producers of all agricultural, livestock and fisheries products. EU-funded regional support 
programmes are also available for building the capacities of the authorities responsible for 
SPS matters. These include the Reinforcing Veterinary Governance programme, and the Regional Programme for Plant Protection (PRPV) for the countries members of the Indian Ocean 
Commission. 
3.99.  Through the ASH, Madagascar signed a Memorandum of Understanding with China in 2013 
laying out the sanitary conditions for access for its fisheries and aquaculture products. 
3.100.  Projects under the Standards and Trade De velopment Facility (STDF) aim to ensure that 
local products better meet the international standards for food exports, as well as to improve the dissemination of information about these standards. Accordingly, in 2008 Madagascar benefited from a US$20,000 grant to aid its dried beans subsector in meeting international SPS standards. 
3.3.1.2  Measures incumbent on the Quality and Packaging Division 
3.101.  According to the TBT Information Management System
44, Madagascar has not made any 
notification to the WTO regarding its standardization regime or its accreditation and certification 
procedures. The National Enquiry Point notified in connection with standardization was the 
Standardization and Regulation Division of the Standardization and Quality Directorate in the 
                                               
41 Interministerial Order No. 3168/2000 banning import s of live animals and products and foodstuffs 
of animal origin. 
42 Order No. 11.565/2000 prohibiting the importation of  all live animals and meat and meat products 
from South Africa. 
43 The HACCP, a systematic and preventive method of  food safety control, has been used by many 
countries since the 1960s. It is recommended by the Code x Alimentarius Commission, the United Nations body 
responsible for international food safety standards. 
44 Viewed at: http://tbtims.wto.org/Default.aspx?Lang=2 . WT/TPR/S/318 • Madagascar 
 
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  Ministry responsible for trade. However, as this unit no longer exists, it is the Quality and 
Packaging Division (SQC) that performs this func tion even though there has been no official 
notification to the WTO. No specific TBT-related concerns have been raised by WTO Members in regard to Madagascar. 
3.102.  Law No. 97-024 of 14 August 1997 still govern s the national system of standardization and 
certification of goods and services.
45 Under this Law, voluntary st andards may be made mandatory 
by decree. The Law makes no mention of imports. No Malagasy standardization body has adopted 
the Code of Good Practice for the Preparation, Adoption and Application of Standards.46 
The authorities have requested WTO technical assistance for setting up a TBT Committee, for training agents in TBT matters, adopting good regulatory, procedural and notification practices, and adopting the Code. 
3.103.  The SQC in the Ministry responsible for trade is tasked with preparing, reviewing and 
disseminating technical regulations (mandatory standards) governing pre-packaged foods and 
agricultural products of plant origin. It may write a standard or a part of a standard into 
a technical regulation, depending on the needs of consumers, domestic industry and importers or 
exporters. This unit also acts as the Codex Alimentarius contact point. According to the SQC, regulations are drawn up by technical committees comprising all the players concerned with the 
product to be regulated, including representati ves of consumers, manufacturers, exporters, 
importers or distributors. If necessary, laboratori es or research bodies are brought on board. 
At March 2015, the only mandatory standards concerned: 
 soaps and detergents: Interministerial Order No. 28520/2011 of 30 September 2011; 
 the labelling of pre-packaged foods: Orde r No. 1075/2012 of 24 January 2012 (adoption 
of the Codex standard); 
 the labelling of fortified foods: Order No. 1075/2012 of 24 January 2012; 
 the Malagasy standard for green coffee for marketing: Decree No. 85-129 
of 3 May 1985; 
 the Malagasy standard on vanilla: Interministerial Order No. 4911/99 of 12 May 1999; 
and 
 the technical regulation on cloves (in preparation). 
3.104.  In 2013, the Ministry of Trade and Consumer  Affairs consulted stakeholders with a view to 
updating the technical regulations pertaining to rice, maize, onions, dried beans (including 
Cape peas) and groundnuts. The aim was to update and harmonize the technical regulations on 
these products in order to stimulate trade in the Indian Ocean regional market. 
3.105.  The SQC is also responsible for labelling, packing and packaging. As stated above (section 
on SPS), although the SQC does not undertake ei ther registrations or inspections of imported 
products and importers, it is present at exportation when the quality and packaging of some export goods are being controlled (Section 3.2.2.3). 
3.3.1.3  Measures under the responsibility of the Madagascar Bureau of Standards 
3.106.  The Madagascar Bureau of Standards (BNM) was established in 1997 and began operating 
in 2002 under the technical supervision of the Ministry  in charge of industry. It is responsible for 
the overall management and coordination of standardization issues, including testing, certification 
and inspection, and the quality assurance of go ods and services for the domestic market, and 
of imports and exports.
47 BNM budget receipts consist of contributions from member enterprises 
and corporations, loans and grants, government subsidies, and revenue from the various services 
provided (sales of standards, certification and pr oduct approvals). It had been planned to publish 
the national list of established standards on an official website in 2015. Madagascar has established voluntary standards for construction materials, road safety and urban public transport. 
A decree on the approval of construction materi als was drawn up in 2012, and according to the 
authorities, this approval was to become operational in the spring of 2015. 
                                               
45 Viewed at: http://www.edbm.gov.mg . 
46 Viewed at: https://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm . 
47 Decree No. 2008-703 determining the status and organization of the BNM. WT/TPR/S/318 • Madagascar 
 
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  3.107.  In accordance with the agenda set by its governing board, the BNM develops a preliminary 
draft standard. It sets up a technical committee for consultation on the chosen criteria. The standards drawn up are either definitive or experimental. The technical committees comprise experts or specialists and representatives of various units of the ministerial departments and 
public institutions concerned, the private sector (different categories of operator), academic and 
research institutions, testing laboratories, and consumers' associations concerned by and interested in the standards to be studied. The Malagasy national standard is developed on the 
basis of the international principles and international standards and principles laid out in the 
SPS and TBT Agreements. The BNM maintains a dire ctory of some 60 national standards mainly 
covering food products. 
3.108.  Madagascar is moving ahead with the harmonization of regional standards and the 
adoption of international standards (International Organization for Standardization (ISO), the 
International Electrotechnical Commission (IEC) and the CODEX). These documents may serve the technical committees as source documents. 
3.109.  The BNM is a correspondent member of the ISO and as such does not take an active part 
in the technical and policy-making work of that or ganization, but benefits from the outcomes of its 
activities. The BNM has also been affiliated with the IEC since 2005. Madagascar does not 
participate in the IECEE CB Scheme.
48 The establishment of the BNM National "IEC" Committee 
was planned for 2015. 
3.110.  The BNM represents Madagascar at the IS O but has never notified the ISO of its annual 
work programme. The BNM has announced in connection with this report that these notifications 
have now been given priority, with a view to impr oving the operation of the Bureau both nationally 
and internationally. However, the formulation of a national standardization policy, which has not been done since Madagascar joined the ISO, would first be decided on in the context of preparing 
the national standardization strategy. 
3.111.  Madagascar participates in the COMESA Programme on standardization, quality assurance, 
metrology and testing. This programme aims to harmonize standards and quality assurance 
programmes within COMESA. 
3.112.  A decree providing for the introduction of  certification was published in September 2014 
and in 2015 certification was being put in place by the BNM. Work was under way to identify auditors and train new ones, and product certification was to begin in 2015. 
3.3.1.4  Responsibilities of the Legal Metrology Division 
3.113.  The use of the metric system is compulsory  in Madagascar. The Legal Metrology Division in 
the Ministry of Trade and Consumer Affairs is re sponsible for metrology and inspection. Among its 
domestic activities, it randomly inspects fuel-measuring instruments to ensure their accuracy. 
It also represents Madagascar at the International Organization of Legal Metrology and has stated its wish to become an associate member of the International Bureau of Weights and Measures. 
3.3.1.5  Products regulated by the Ma dagascar Medicinal Products Agency 
3.114.  Madagascar imports almost all the medicines and health products consumed in the 
country. Chemical substances intended for use in public health, as well as cosmetics containing therapeutic substances require a marketing au thorization (AMM) issued by the National 
Registration Commission.
49 The Madagascar Medicinal Products Agency was created in 199850 and 
is responsible for registering, inspecting and controlling the quality of medicines and for testing and control. Its website contains the list of registered products.
51 There were some 
2,600 registered products at the end of 2014. Medi cines classified as "medium and low-turnover" 
(only specialties included in the official publications "Vidal" (France) and "Doroz" (Switzerland)), 
                                               
48 IEC System of Conformity Assessment Schemes for Electro-technical Equipment and Components 
(IECEE), viewed at: http://www.iecee.org . 
49 The costs of these procedures are fixed by Interministerial Order No. 24364/2004 of 
10 January 2005. 
50 Decree No. 98-086 of 27 January 1998, as amended by Decree No. 2004-086 of 27 January 2004. 
51 Viewed at: http://www.agmed.mg . WT/TPR/S/318 • Madagascar 
 
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  which pharmaceutical laboratories are reluctant to register given their low import volume, may be 
imported but are not registered by the Agency. 
3.115.  Parapharmaceuticals and medical consumables do not require marketing authorization, nor 
do cosmetics and personal hygiene products not containing therapeutic substances. It could not be 
determined which body is responsible for testing and assuring the quality of the latter products 
before their release for consumption. 
3.116.  The manufacturing laboratory must file an application, the exam ination of which costs 
€200 per product for new marketing authorization applications and €140 to €300 for renewals. 
The application must state, inter alia,  the name and address of the manufacturing laboratories 
holding the marketing authorization in the country of manufacture, the wholesale price excluding tax (PGHT) in foreign currency, the product distribution and supply channel recommended by the 
laboratory of origin and the method of distri bution envisaged (pharmacy, hospital, etc.). 
The relevant documentation must be attached for any product prequalified by the WHO. For specialties in which the molecule is still protected by a patent, the applicant must submit 
a dossier to the Malagasy Industrial Property O ffice (OMAPI) (Section 3.3.6) and deliver to the 
Agency the receipt attesting to the deposit. Examination of the dossier takes an average of four months. 
3.117.  Under the new import procedures in place since 2010, only pharmaceutical wholesalers are 
authorized to import. There are 36 such companie s in all of Madagascar, all of them Malagasy 
companies in which 51% of the shares must belong to the pharmacist in charge. The latter must be Malagasy and must hold a licence issued by the Ministry of Health authorizing them to 
distribute nationwide. 
3.118.  To register a product, foreign manufacturers wishing to sell to Madagascar generally turn 
to a wholesaler to obtain the marketing authorization, which is granted for a period of five years. 
For the purposes of testing, the Medicines Quality Control Laboratory creates a file for each 
product and delivers a certificate of analysis. Any batch may undergo a post-marketing test, whether upon notification or after pharmaceutical inspection. 
3.119.  Medicines and health products are distribute d either through the public health care system 
or through private pharmacies. The public health care system and private non-profit institutions are supplied with essential generic medicines (in accordance with a national list) exclusively by the central procurement agency, SALAMA. SALAMA is th e country's chief supplier of generic medicines 
and materials (syringes, compresses, etc.). It purchases its products by international competitive 
bidding under an exclusivity agreement with the State that runs until 2016.
52 The cost 
of medicines is not legislated; under a private ag reement, wholesalers receive a profit margin of 
20% of the PGHT before sale to pharmacies. The pharmacies' margin on sales to patients is 35% 
of the price of importation (by the SALAMA or by  private wholesalers), and 40% in rural areas. 
3.120.  At the end of 2013 the Madagascar Medical Review reported frequent shortages 
of medicines.53 Under the procedures of the Fund for Non-Stop Supply of Essential Medicines 
(FANONE), basic health centres are financed enti rely by means of a 3% deduction from the 35% 
sale price increase accorded for medicines. It is therefore the buyers of medicines at public health institutions that finance the health sector's social protection network. Users of private medical 
facilities (and people not purchasing medicine s) therefore do not contribute to the Fund. 
3.3.1.6  Measures incumbent on the National Environment Board 3.121.  Sustainable natural resource management has been a stated priority of every Malagasy 
Government since 1999, given the need to preserve  the country's exceptional terrestrial, riparian, 
marine and coastal biodiversity.
54 
                                               
52 Viewed at: http://www.salama.mg . 
53 Viewed at: http://madarevues.recherches.gov.mg/IMG/pdf/RMM10-02a.pdf . 
54 See in particular Law No. 99-021 of 19 August 1999 on industrial pollution management and control 
policy, and Decree No. 99-954 of 15 December 1999, as amended by Decree No. 2004-167 of 3 February 2004 on environmental compliance of investment (MECIE). WT/TPR/S/318 • Madagascar 
 
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  3.122.  Environmental protection falls under the Ministry of the Environment, Ecology and Forests 
(MEEF). Unfortunately, a lack of resources is considerably hampering officials in attaining the goals set by the Ministry, namely: increasing the areas under protection in order to conserve and enhance the biodiversity (Section 4.4); slowing down the degradation of natural resources; 
developing the environmental reflex at all levels; and strengthening forestry and environmental 
governance. 
3.123.  The most acute international trade-related problems are illegal logging and exportation, 
especially of rosewood and ebony wood, and illegal exports of animal products such as crocodile 
skins. The Government's current priorities includ e registering rosewood and ebony wood in CITES 
Appendix II, and halting illegal felling and exports. In August 2014, the Government also announced the decision by CITES to lift the moratorium imposed in 2010 on exports of crocodile 
products from Madagascar, as it was impossible to trace the origin (wild or not) of the animals 
slaughtered. 
3.124.  Since 2004, all investment projects requirin g public works authorization have been subject 
to an in-depth environmental impact study and an environmental management plan or a precise 
environmental commitment programme, which must be evaluated so as to ensure compatibility with the environment.
55 The National Environment Board is tasked with examining the dossiers. 
3.125.  Since 2007, regulations intended to protect the ozone layer have been in place for the 
importation, sale, resale and use of refrigerants, refrigeration equipment and halons. Customs duty was waived in 2010 on equipment for the generation of renewable energies. This was 
followed in 2011 by a VAT waiver for wind- and water-powered generators. In October 2014 the 
Government announced a ban on the production and marketing of plastic bags effective 
1 May 2015, imports of such bags being banned as of February 2015. 
3.3.2  Incentives 
3.126.  Madagascar's notifications to the WTO indicate  that it grants no aid or subsidy that might 
be inconsistent with its obligations under the Agreement on Subsidies and Countervailing Measures or under the GATT 1994.
56 Appreciable tax and foreign exchange privileges are nevertheless 
accorded to companies declaring that they export the bulk of their output (Section 2.3.2), as well 
as to large-scale mining investment projects. Tax rebates are granted to oil companies in order to keep their prices low. Public services such as electricity (Section 4.5.3) water, air and rail transport services (Section 4.7) and postal services receive government support. 
3.3.3  Competition and price control regime 
3.127.  Owing in part to its insularity and to low domestic demand, the Malagasy economy lacks 
competitiveness. The sectors in which abuses – chiefly price abuses – are most often reported 
include petroleum products, beverages, telecommunications services and construction materials. 
For example, one cement company (Holcim SA, foreign-owned capital) controls two-thirds of Madagascar's domestic cement market, in competition with another foreign company (Lafarge). 
The customs duty on cement ranges from 5% to  10% depending on the product. Cement imports 
have been zero-rated in the past, that is to say exempt from all customs and fiscal duties and taxes, but that tax relief was not followed by a price reduction, owing perhaps to the absence of competition in this market.
57 There are frequent cement shortages on local markets. Trade policy 
in this subsector and ways and means of encouraging competition in this market should be looked 
into. 
                                               
55 Decree No. 99-954 of 15 December 1999, as amended by Decree No. 2004-167 of 3 February 2004 
on environmental compliance of investment (MECIE). 
56 WTO documents G/SCM/N/95/MDG, G/SCM/N/95/MDG/Suppl.1, G/SCM/N/186/MDG, 
G/SCM/N/202/MDG, G/SCM/N/220/MDG and G/SCM/N/253/MDG; viewed at: 
https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=R:/G/SCM/N186MDG.pdf . 
https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=R:/G/SCM/N202MDG.pdf . 
https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=R:/G/SCM/N220MDG.pdf . 
57 Viewed at: http://www.cream.mg/ pub/detaxation.pdf . WT/TPR/S/318 • Madagascar 
 
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  3.128.  A legislative framework for competition has existed since 2005 and also provides for 
a Competition Council58, the statute of which was adopted by decree in April 2014 but was still 
awaiting implementation in October 2014. In prin ciple, the Council is to hold decision-making 
power that extends to collective practices, in other words the operation of cartels and abuse 
of dominant position. Its remit would also cover mergers, which are subject to prior examination 
and which may be approved, prohibited or approved subject to conditions. Matters may be referred to it by the Minister responsible for trade, companies, parliamentary commissions, local 
authorities, trade unions, approved consumer organizations, as well as chambers of commerce, 
industry and agriculture, or it may act on its own initiative. It would be empowered to issue injunctions, impose fines and accept undertakings on the part of companies. Lastly, it would have broad advisory powers and could be consulted by the Government on any competition-related 
draft text. 
3.129.  In sectors or zones where price competition is limited, more specifically owing to 
a prevailing monopoly situation or to chronic supply problems, the Government may move to 
restrict general price freedom by decree or following consultation with bodies representing private 
operators. The Government may likewise adopt temporary measures lasting up to six months to counter excessive price rises or declines, by reason of a crisis situation, exceptional circumstances, 
a disaster or a clearly abnormal market situation in a given sector. These are the provisions that 
have been invoked since 2008 in order to administer the pump prices of petroleum products (Section 4.5.2).
59 
3.130.  Madagascar also monitors the prices of staple products, which currently include rice, edible 
oil, cement, flour, bread and sugar. To combat  famine the Government bought some of these 
products from private companies in October 2010 for resale at lower prices on the market.60 
But no other such intervention has occurred sinc e then. The Competition and Market Regulation 
Directorate in the Ministry responsible for trade reports to the Government in the event of sharp 
market price fluctuations for these products, particularly during tiding-over periods. 
3.3.4  State-trading, state-owne d enterprises and privatization 
3.131.  Madagascar has not notified the WTO regarding its state trading enterprises within the 
meaning of Article XVII of the GATT, namely go vernmental and non-governmental enterprises, 
including marketing boards, which have been gran ted exclusive or special rights or privileges, 
including statutory or constitutional powers, in the exercise of which they influence through their 
procurement or sales the level or direction of im ports or exports. Table 3.9 lists companies with 
State participation that are operating internationally. 
                                               
58 Law No. 2005-020 of 17 October 2005. 
59 Decree No. 2013-882 of 23 December 2013 renews the administration of pump prices from 1 January 
to 30 June 2014, invoking the Law on Competition. 
60 Jeune Afrique,  20 October 2010, viewed at: 
http://www.jeuneafrique.com/actu/20101020T182416Z20101020T182358Z . WT/TPR/S/318 • Madagascar 
 
- 68 - 
 
  Table 3.9 Some companies with State partic ipation operating as of 31 December 2014 
Company Activity Equity capital  
(MGA million) State 
share 
(%) Comments 
Agriculture, fisheries, livestock 
Malts et orges de Madagascar  Barley growing  3,867  4.76  
Pêcheries de Nossi-Be  Deep-sea fishing  2,162  23.01 Exports  
Société malgache de pêcherie  Fishing and aquaculture  1,066  1.00 Exports  
Société sambava voanio  Coconut plantation  3,190  79.41  
Société théicole de Madagascar  Tea plantation  87 100.00  
Building and public works 
ARO immobilier (AROIMMO) Property development  1,000  n.a.  
Société d'équipement immobilier (SEIMAD) Construction and management  272 97.99  
Société nationale de participation  Equity participation  3,400  56.77  
Société sino–malgache de BTP  Public works  400 30.50  
Communications    
Société anonyme Telecom malagasy  Telephony  41,156  32.00  
Energy 
Jiro sy Rano Malagasy (JIRAMA) Production and distribution of 
electricity and water 52,000  100.00  
Industry 
Brasserie STA R Aerated beverages  4,290  11.21  
Cotona Real Estate (formerly COTONA) Textiles  25,874  44.71  
Société pour le développement du 
machinisme agricole (SIDEMA) Industrial equipment  16 72.96  
Société d'étude, de construction, de 
réparation navale (SECREN) Shipbuilding  400 37.50  
Société Siramamin'Analaiva (SIRANALA) 
(lease-management contract with the 
Chinese company SUCOCOMA)  Sugar cane plantation and 
processing 100 65.00  
Société Siramamy Malagasy (SIRAMA) 
(lease-management contract with the 
Chinese company SUCOCOMA) Sugar cane plantation and 
processing  1,875  74.40  
Compagnie nosybéenne industrie agricole 
(CNIA) Plantation, processing and local 
sale of cocoa and coffee 76.5 100  
Filature et tissage de Madagascar (FITIM) Spinning and weaving of paka  6.44 37.44  
Centre malgache de la canne et du sucre 
(CMCS) Production of sugar and related 
products     
Mines and drilling 
Kraomita Malagasy (KRAOMA)  Chrome extraction  3,326  97.17 Exports  
Société marbre et granit de Madagascar 
(MAGRAMA) Extraction of marble and granite  629 1.12 Exports  
QMM Exportation of ilmenite and zircon  n.a. 20.00 Exports  
Petroleum products 
Galana distribution pétrolière  Distribution  15,209  10.07 Imports  
Galana raffinerie terminal (GRT) Refining  6,000  10.00 Imports  
Jovenna International Holding  Distribution  12,889  6.12 Imports  
Logistique pétrolière (LPSA) Storage  19,889  31.00 Imports  
Madagascar Oil Company  Production and distribution  1,044  5.00 Imports  
Société malgache des pétroles Vivo Energy  Distribution  3,600  20.00 Imports  
Total Madagasikara  Distribution  14,956  20.56 Imports  
Financial services  
Assurances réassurances omnibranches (ARO) Insurance
 7,013  73.36  
BFV-Société générale (BFV–SG) Banking  14,000  28.50  
BNI–Madagasca r Banking  10,800  32.58  
BOA–Madagasca r Banking  45,510  9.37  
Caisse d'épargne de Madagascar (CEM) Savings  5,460  100.00  
Compagnie d'assurances et de 
réassurances Ny Havana (NY HAVANA) Insurance  7,704  47.61  
Fonds de garantie malgache (FDGM) Banking  2,000  49.00  
Fonds de portage et de privatisation  Equity participation  20 100.00  
Société de gestion et de recouvrement  Collection  1,200  100.00  
Société nationale de participation  Equity participation  3,400  56.77  
Port and airport services 
Aéroports de Madagascar (ADEMA) Air terminal management  6,110  64.12  
GASYNE T Port services  10 30.00  
Société de manutention des marchandises 
conventionnelles (SMMC) Management and cargo handling  2,311  100.00  
Société du Port à gestion autonome de 
Antsiranana (SPAAN) Autonomous port management  n.a. 
  
Société du Port à gestion autonome de 
Mahajanga (SPAM) Autonomous port management  n.a.  
Société du Port à gestion autonome de 
Toamasina (SPAT) Autonomous port management  2,800  100.00  
Société du Port à gestion autonome de 
Toliary (SPATO) Autonomous port management  n.a.  WT/TPR/S/318 • Madagascar 
 
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  Company Activity Equity capital  
(MGA million) State 
share 
(%) Comments 
Tourism 
Madagascar Airtours (MAT) Travel agency  271 16.73  
National Tourism Development (NTD) 
(formerly CCM) Management of Andilana Beach  11 98.18  
(Société d'études immobilières et 
d'exploitation hôtelière – "ZAHA MOTEL" 
(SEIXEHO-ZAHAMOTEL) Management of ZAHA hotels  36 50.78  
Société malgache d'hôtellerie (SMH) Hotel Carlton  680 46.58  
Transport 
Air Madagascar (AIRMAD) Air transport  33,885  89.56  
Madarail (formerly RNCFM) Rail transport  5,000  25.00  
Other     
FANALAMANGA Logging  7,849  99.99  
Institut médical de Madagascar (IMM) Medical imaging  500 34.00  
n.a. Not available. 
Source: Malagasy authorities. 
3.3.5  Government procurement 
3.132.  Government procurement volumes fell sharply in 2009, probably owing to the political 
crisis (Chart 3.2). Foreign sources of supply accounted for a mere 0.6% of total government 
procurement in 2013. Madagascar is neither a member nor an observer of the Plurilateral 
Agreement on Government Procurement concluded under WTO auspices. The authorities have nevertheless made significant efforts to be transpar ent by publishing on the Internet an automated 
government procurement management system in Madagascar. 
Chart 3.2 Trend in government procurement volumes, 2007-2013 
US$ million 
17 19
5 2 4 7 13656
151
5 14 86061
1768
2414 182622
149
33
822145
110
6050
050100150200250
2007 2008 2009 2010 2011 2012 2013Private agreement Open tender, international Open tender, national
Restricted tender Contracts below the threshold23.9214.0
176.0
104.0111.4 109.5158.0
 
Note: "Contracts below the threshold" include consultati on by public posting, an d consultation with three 
providers. 
Source: Government Procurement Regulatory Authority (ARMP). 
3.133.  Madagascar's Government Procurement Code dates back to 2004 and was drawn up with 
the technical assistance of the World Bank.61 The Code is intended to "ensure that government 
procurement is efficient and that public funds are properly used".62 It applies to procurement by 
the Government and public institutions, local authorities and their public institutions; any public or private entity whose resources are derived from public funds; and any enterprise in which the 
State has a majority holding. However, many state-owned enterprises still have their own contract 
award procedures. Contracts financed from external resources are also subject to the Code, unless otherwise specified in the clauses of the financing agreements concerned. 
                                               
61 Law No. 2004-009 of 26 July 2004. 
62 Article 4, Law No. 2004-009 of 26 July 2004. WT/TPR/S/318 • Madagascar 
 
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  3.134.  The Government Procurement Regulatory Authority (ARMP) has existed since 2005.63 
Its exhaustive website is regularly updated and contains lists of laws and regulations in force.64 
The ARMP plans to update the Government Procurement Code under a 2014-2018 five-year strategy, in particular to clear up ambiguities detected during its implementation, take account of 
other countries' good practices (e.g. framework agreements), give consideration to future 
possibilities of regional procurement (e.g. within COMESA), and professionalize the work of those involved in government procurement. 
3.135.  The ARMP is made up of two entities established in 2006, the Committee for Regulation 
and Appeals concerning the Award of Public Cont racts and the National Government Procurement 
Commission (CNM). Within each Ministry or other entity covered by the Code, a Tender Commission (CAO) chaired by the person responsibl e for government procurement is tasked with 
ensuring compliance with the Code. The CAO is responsible for examining bidders and assessing 
their bids, while the person responsible signs the contract. Anyone involved in the award and execution of a government procurement contract is  subject to the code of good conduct drawn up 
in 2006
65, and must undertake in writing to fulfil all obligations arising from it. 
3.136.  The thresholds for application of the Code are defined by regulation (Table 3.10); beyond 
these thresholds, contracts are, in principle, subject to the tender procedure. A call for tenders 
may be open (with or without pre-qualification) or restricted. Tendering is said to be restricted 
when bids may be submitted only by the candidates (at least three) that the person responsible for government procurement has decided to consult. It may be open nationally or internationally, or a contract may be awarded by private agreemen t. Recourse to private agreement requires the 
prior approval of the CNM; 13% of contracts were awarded in this way in 2013. 
Table 3.10 Thresholds for the award of gove rnment procurement contracts through calls 
for tender, 2015 
(MGA) 
Contracting authority Road works  Supplies 
(million) Provision 
of services/ 
intellectual 
services 
(million) Construction/  
rehabilitation Maintenance 
(million) Other 
(million) 
State and ex-categorya urban 
communes and their public institutions 
(EP) 1 billion  
4 billion 200 
750 140 
300 80 
200 25 
90 
Regions, urban communes of categories 
1 and 2a and their public institutions  500 million  
2 billion 100 
350 75 
150 50 
120 20 
80 
Rural communes and their public 
institutions 250 million  
1 billion 50 
200 35 
80 20 
50 6 
25 
State-owned companies and Industrial 
and Commercial Public Institutions 
(EPIC)  1 billion  200 140 80 25 
Note: MGA 3,000 is equivalent to about US$1. 
a The urban communes of categories 1 and 2 are th e six provincial capital urban communes and the 
urban communes of Antsirabe, Nosy-Be and Sa inte Marie. The other urban communes are 
ex-category. 
Source: Order No. 13 838/2008/MEFB of 18 June 2008, and ARMP, viewed at: http://www.armp.mg . 
3.137.  The principle is to select the lowest bid deemed technically acceptable, but national 
enterprises may be accorded a price advantage of 10% at most. In principle, tender notices are 
published in advance in a specialized government journal and in at least one daily newspaper with 
a wide circulation.66 The only journal dedicated to government procurement is the Government 
Procurement Journal, the official newspaper of the ARMP. The ARMP undertakes subsequent verification in the case of some large contracts.
67 
                                               
63 Decree No. 2005-215 of 3 May 2005. The information on the ARMP was viewed at: 
http://www.armp.mg . 
64 See, for example, the User's Guide, viewed at: http://www.armp.mg/files/ GUIDE-UTILISATEUR-SUR-
LA-PASSATION-DE-MARCHE.pdf  [26 December 2007]. 
65 Decree No. 2006-343 of 30 May 2006. 
66 Publication online is also  offered by the ARMP at: http://www.armp.mg/avis_g_n_raux . 
67 Order No. 11179/2006/MEFB of 29 June 2006, as amended. WT/TPR/S/318 • Madagascar 
 
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  3.138.  Below these thresholds, contracts above a certain minimum amount68 must be subject to 
consultation either by public posting or after restricted consultation on pricing; this latter procedure in principle also requires at least three suppliers or companies, but this system is now being reviewed as it is not working properly: th e first supplier contacted often undertakes to find 
two other bidders, whose tenders will not be competitive. 
3.3.6  Protection of intellectual property rights 3.3.6.1  Overview 
3.139.  There has been no substantial revision of Madagascar's intellectual property system since 
the country's first review in 2001. It still consists of one regime specifically aimed at protecting industrial property
69 and another covering copyright and related rights.70 The authorities point out 
that the efforts already mentioned in the first review are being pursued in order to bring national 
legislation into conformity with the provisions  of the Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS Agreement), as they apply to LDCs (including Madagascar). 
At the end of 2014, a draft reform of Madagascar's  legislative framework for industrial property 
was being examined by the Commission for the Reform of Business Law, which comes under the 
Ministry of Justice. 
3.140.  Madagascar has been a member of the World Intellectual Property Organization (WIPO) 
since 22 December 1989. In 1963, the country accede d to the Paris Convention for the Protection 
of Industrial Property and in 1972 to the Stockholm Act; in 1966 it acceded to the Berne Convention for the Protection of Literary and Ar tistic Works (Brussels Act), and in 1978 to the 
Patent Cooperation Treaty (PCT). Madagascar sign ed the Patent Law Treaty in 2000, and in 2007 it 
ratified the Protocol relating to the Madrid Arrang ement for the International Registration of Marks. 
In 2014 Madagascar ratified the following three conventions: 
 the Rome convention on related rights or neighbouring rights; 
 the WIPO Copyright Treaty (WCT); and 
 the WIPO Performances and Phonograms Treaty (WPPT).
71 
3.141.  In 2013 Madagascar informed the Council for TRIPS of its individual needs for technical 
and financial cooperation under the TRIPS Council Decision of 29 November 2005, which states 
that "with a view to facilitating targeted technical and financial cooperation programmes, all the LDC Members will provide to the Council for TRIPS, preferably by 1 January 2008, as much information as possible on their individual priority needs for technical and financial cooperation in 
order to assist them taking steps necessary to implement the TRIPS Agreement".
72 
3.3.6.2  Industrial property 3.142.  Industrial property is administered in Madagascar by the Malagasy Industrial Property 
Office (OMAPI), whose mission and functions, includ ing the issuance of industrial property titles, 
are laid down in its 1992 statute.
73 Four titles are envisaged, namely, patents, trademark 
registrations, industrial design registrations, and trade name registrations, accompanied in each 
case by a term of protection and penalties in the event of infringement of protected rights. 
Pharmaceutical and veterinary products, cosmetics and foodstuffs are not patentable74, contrary to 
the provisions of the TRIPS Agreement. Pharmaceutical processes, however, may be patented. 
                                               
68 For construction, rehabilitation or maintenance wo rks, the minimum amount as of which consultation 
is compulsory is MGA 40 million (about US$13,300). For supplies, it is MGA 15 million and MGA 10 million for services and intell ectual services. 
69 Ordinance No. 89-019 of 31 July 1989 and Decree No. 92-993 of 2 December 1992. 
70 Law No. 94-036 of 9 December 1994. 
71 For the texts of the related laws, see Table 2.1. 
72 Document IP/C/W/584 of 22 February 2013 and document IP/C/40 of 30 November 2005. 
73 Decree No. 92-994 of 2 December 1992. 
74 Article 8, Ordinance No. 89-019 of 31 July 1989. WT/TPR/S/318 • Madagascar 
 
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  3.143.  Obtaining (or renewing) an industrial property title requires an application to be made out 
on a form available from the OMAPI, in accordance with an established scale of fees.75 
Upon receipt of the application, the OMAPI initiates the procedure, registers the application and examines it. The industrial property titles issued are published in the Official Industrial Property 
Gazette (GOPI).
76 
3.144.  The figures produced by the OMAPI reveal a clear increase in the number of applications 
filed and titles issued (Table 3.11). For example, the number of applications filed by residents for 
trademarks and service marks was 4,195 be tween 2007 and 2013 (an annual average of 685), 
compared to 2,191 between 2001 and 2006 (an annual average of 365). The number of non-residents having applied for or obtained a patent is also higher than that for residents. 
Table 3.11 Applications filed and industri al property titles issued, 2001-2006 and 
2007-2013 
 Applications filed Titles issued 
Residents Non-residents Residents Non-residents 
2001-2006  
Patents 55 159 29 171 
Trademarks for products and services 2,191 2,135 2,064 2,366 
Industrial designs 1,450 97 1,233 78 
Trade names 261 13 380 4 
2007-2013  
Patents 46 350 23 245 
Trademarks for products and services 4,195 7,189 4,250 6,145 
Industrial designs 2,192 42 2,150 43 
Trade names 258 17 283 20 
Source: OMAPI.77 
3.145.  Since 2007, the OMAPI has received some 400 patent applications (80% from 
non-residents under the PCT, and the rest from residents) and has issued 268 patents 
(Table 3.11). Patent protection is granted for a term of 15 years; this term of protection is less 
than the 20 years stipulated in the TRIPS Ag reement, but the authorities point out that 
an "additional 5-year term of protection may be granted on request, provided that the national 
interest so requires and local working is serious and satisfactory". Furthermore, the current reform 
aims to increase patent protection from 15 to 20 years. Protection of trademarks and trade names is granted for 10 years and may be renewed for further 10-year periods, while industrial designs are protected for 5 years, twice renewable. 
3.3.6.3  Copyright and related rights 
3.146.  Literary and artistic property is admini stered in Madagascar by the Malagasy Copyright 
Office (OMDA)
78, whose tasks include the protection, defence and management of copyright and 
related rights. Software is protected for 25 years after its creation (contrary to the provisions 
of the TRIPS Agreement, which call for a 50-year term of protection), the droit de suite (resale royalties) lasts 70 years, the rights of pe rformers are protected for 50 years after fixation, 
and the rights of audiovisual communication companies for 20 years. 
3.147.  The OMDA collects royalties for the use or exploitation of literary and artistic works and, 
after deducting management costs, distributes them to the entitled parties (including foreigners). For radio stations, restaurants and hotels, OMDA agents propose lump-sum payments in the 
absence of systematic monitoring of the work s broadcast. The OMDA has almost 7,000 members 
and had registered 87,172 works to the beginning of March 2015. 
3.3.6.4  Protection of industrial property rights 
3.148.  In the event of infringement of industrial property rights, the rights holder may, under an 
order issued by the president of the competent court, proceed with the designation and detailed 
                                               
75 Information on the regime, the te xts of the laws, the procedures, forms and taxes was viewed on the 
OMAPI website at: http://www.omapi.mg . 
76 Viewed at: http://www.omapi.mg/gazette-officielle.html . 
77 Viewed at: http://www.omapi.mg/index.php?article54/statistiques . 
78 Decree No. 98-434 of 16 June 1998. WT/TPR/S/318 • Madagascar 
 
- 73 - 
 
  description, with or without seizure, of the allegedly counterfeit objects. The penalties for violation 
of industrial property rights are six months to three years' imprisonment and/or a fine of MGA 100,000 to 2 million, plus damages. In the ev ent of a repeat offence, the criminal penalty 
incurred is doubled. 
3.149.  The OMAPI also undertakes information and awareness-raising activities for economic 
operators. The products most likely to be counterfeited in Madagascar are clothing, perfumery articles, and film and music CDs and DVDs. Arti cle 29 of the Customs Code (2007) describes 
prohibited products as those bearing a trademark identical to the registered trademark. They may 
be seized at the border. The authorities have explained, however, that the OMAPI does not have the status of a rights-enforcement body and may not therefore undertake either prosecution or punishment. Hence, the Office is not empowered to intervene in the market and seize imported 
counterfeit goods that have made it past the customs. A platform was nonetheless set up in 2013 
to enhance the protection of industrial property ri ghts and their users. This platform comprises the 
OMAPI, the customs administration, the department  of justice, the economic police, the chamber 
of solicitors, and representatives of the private sector. 
3.150.  The OMDA also participates in the seizure of counterfeit products. Since 2006, seizures 
have been possible without a prior complaint from authors or their successors in title, by judicial 
police officers, customs enforcement officers, tax centres and the Ministry responsible for trade, 
and by sworn OMDA agents.
79 An Anti-piracy Brigade (BAP) was established in 2012 to assist the 
OMDA in this area, and the two bodies work hand-in-hand in the struggle.80 The BAP has been 
operating since 2013, in which year 44,556 CDs, DVDs and VCDs of domestic and foreign origin 
were seized; the figure was around 26,000 by 31 July 2014. 
 
 
                                               
79 Interministerial Order No. 12226/2006 of 17 July 2006. 
80 Decree No. 2012-135 of 31 January 2012. WT/TPR/S/318 • Madagascar 
 
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  4  TRADE POLICIES BY SECTOR 
4.1  Agriculture 4.1.  Madagascar's agriculture has been through difficult years since 2010 with virtually zero 
growth and a sharp decline in 2013. The rice and maize harvests were destroyed by swarms of 
locusts, a cyclone, floods and drought. The anti -locust campaign is mainly conducted under the 
aegis of the FAO and in 2014 the most comprehensive campaign for the past 15 years was waged.
1 According to the FAO, over 30% of Madagascar's population is under-nourished, especially 
in rural areas (Chart 4.1). Unlike many other African LDCs, particularly in the region, Madagascar 
has appeared unable over the past decade to adopt the means needed to bring about a real increase in food production. 
Chart 4.1 Net food production per capita, 2004-2013 
8090100110120130140150160
 2004  2005  2006  2007  2008  2009  2010  2011  2012  2013MadagascarMaliZambia
Mozambique(Index 2004-2006=100)
 0 5001 0001 5002 0002 5003 000
2011Food supply (kcal/per capita/day)Zambia
Mozambique
Mali
Madagascar
 
Source: Online information from FAOSTAT (FAO), viewed at: http://faostat3.fao.org/home/E . 
4.2.  Madagascar nonetheless has vast agricultur al potential: according to the FAO, there are 
3.5 million hectares of potentially arable land (o ut of 58 million hectares), but only just over 
2 million are cultivated, by 2.5 million farmers. Th e average area of each farm is therefore very 
small. Only 40% of gross agricultural production is marketed. The rural population is generally very poor and mainly produces for its own consumption. 
4.3.  As can be seen from Table 4.1, with the exception of cassava and sugar cane, whose 
expansion is essentially attributable to foreign dire ct investment (FDI), agricultural production has 
stagnated since the previous review of Madagasc ar in 2008. The reason for the sharp drop in 
production of paddy rice in 2013 was primarily climatic conditions. 
4.4.  Several industrial crops such as groundnut s, sugar cane, cotton and tobacco provide the raw 
materials for local agro-industries producing edible oil, sugar, cotton lint and cigarettes. The major export crops include cloves and vanilla, of which Madagascar is the world's leading exporter, as 
well as pepper, coffee, cocoa and lychees (T able 4.2). Madagascar has also developed an 
important sector exporting essential oils and medicinal plants (Section 4.4). 
                                               
1 After five years of inactivity, the swarms had multiplied to such an extent that they constituted an 
invasion. Online information from the FAO, viewed at: 
http://www.fao.org/emergencies/ressources/documents/ressources-detail/fr/c/264223 . See also Jeune 
Afrique : "Madagascar:  une pluie de pesticides pour lutter contre l'invasion de criquets", 13 May 2014. WT/TPR/S/318 • Madagascar 
 
- 75 - 
 
  Table 4.1 Production of food, indu strial and cash crops, 2007-2013 
('000 tonnes) 
Product/Year 2007 2008  2009  2010  2011 2012 2013  
Paddy rice 3,596 3,914  4,540  4,738 4,300 4,551 3,611  
Rice equivalent 2,373 2,583 2,997  3,127 2,838 3,003 2,383  
Dried maize kernels 453 547  474 412 429 450 479  
Dried beans 80 80 82 82 80 82 83 
Cape peas 17 17 17 15 17 18 18 
Fresh cassava 2,994 3,022 3,048 3,009 3,495 3,550 3,780 
Sweet potatoes 895 903  911 919 1,106 1,200 1,300 
Potatoes 216 220 224 226 200 210 230 
Groundnuts 60 60  60 60 65 65 67  
Sugar cane 157 145 570 694 644 702 842 
Tobacco 2 2 2 3  3 3 3  
Unroasted coffee 58 60 57 40 39 42 60 
Cloves 14 17  16 10 20 18 19  
Cocoa beans 6 6 7 8 9 10 10 
Green vanilla 6 5  5 4 4 5 5  
Source: Agricultural statistics servic es of the Ministry of Agriculture. 
Table 4.2.Principal agricu ltural exports, 2007-2014 
(US$ million and %) 
HS 2007  2008  2009  2010  2011  2012  2013 2014 Memo 
2013  
(US$ million, unless otherwise indicated) (% of 
totala) 
HS 0907 Cloves 38.1  30.1 48.4 31.7 172.8  167.7  102.8 109.0 5.6 
HS 0306 Crustaceans 135.9  116.9  82.6 66.0 101.3  65.6 93.9 99.2 5.1 
HS 1604 Preserved fish 43.0  32.4 23.0 37.5 43.6 37.7 50.0 49.5 2.7 
HS 0905 Vanilla 56.7 50.1 44.2 17.6 38.9 10.2 44.0 114.0 2.4 
HS 1701 Sugar 3.7  6.9 19.0 14.1 14.9 13.1 35.2 11.4 1.9 
HS 0713 Dried leguminous 
vegetables, shelled 8.0 9.9 6.2 8.8 20.3 22.4 31.0 37.4 1.7 
HS 2005 Other preserved vegetables  6.5  9.0 10.1 12.5 12.7 13.3 20.1 18.4 1.1 
HS 0901 Coffee 17.6 14.8 2.6 11.2 6.7 5.3 19.7 15.6 1.1 
HS 1801 Cocoa beans, whole or 
broken  19.8 16.3 14.8 11.1 16.9 8.8 16.6 19.6 0.9 
HS 0812 Lychees and other fruit  17.9 13.7 12.4 11.2 10.0 10.6 13.9 12.2 0.8 
HS 1302 Vegetable saps and extracts 3.2  2.1 5.9 6.1 5.6 4.5 10.8 5.1 0.6 
HS 0904 Pepper; pimentos 5.1 3.6 4.0 5.2 8.2 6.1 8.0 11.3 0.4 
HS 1202 Groundnuts, not cooked 0.6  0.9 0.3 0.6 1.3 5.5 5.8 5.8 0.3 
HS 0307 Molluscs 5.4 5.1 5.3 5.2 6.5 4.4 5.5 5.2 0.3 
HS 2208 Undenatured ethyl alcohol  1.4  1.4 1.0 1.0 2.5 3.3 5.4 6.7 0.3 
Sub-total 363.0  313.4  279.8  239.8  462.4  378.6  462.8 520.4 25.2 
HS 01-24 390.3  338.6  301.6  267.6  493.6  408.1  497.3 563.0 27.1 
 (% of totala) 29.1 20.3 27.5 24.7 33.5 33.3 27.1 25.6 N/A 
Memo          
Agriculture, except fisheries products 199.8  178.9  185.9  153.4  334.8  295.7  339.4 402.2 18.5 
 (% of totala) 14.9  10.7 17.0 14.2 22.8 24.1 18.5 18.3 N/A 
Fisheries products 190.5  159.7  115.7  114.3  158.8  112.5  157.8 160.8 8.6 
 (% of totala) 14.2  9.6 10.6 10.6 10.8 9.2 8.6 7.3 N/A 
N/A Not applicable. 
a All products. Note: Agricultural products are in the HS classification (HS 01-24), including fisheries products. The 
principal products are identified in order of the value of 2013 data exceeding US$5 million. 
Source: WTO Secretariat calculations, based on data from the UNSD Comtrade database. 
4.5.  There has been a substantial increase in im ports of most food products since the previous 
review in 2008; the largest imports of agricultural products include rice, especially after the poor 
harvest in 2013, wheat flour and palm oil (US$50 million each), and raw and refined sugar (close 
to US$100 million) (Table 4.3). The sizeable imports of fresh fish are mainly intended for the fish-preserving factories. WT/TPR/S/318 • Madagascar 
 
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  Table 4.3 Principal agri cultural imports, 2007-2014  
(US$ million and %) 
HS 2007  2008  2009  2010  2011  2012 2013 2014 Memo 
2013 
HS 1006 Rice 61.4  74.0 47.2 53.5 92.9 85.9 175.6 152.1 5.7 
HS 1701 Sugar 40.4 47.9 54.2 50.1 85.7 57.5 66.8 69.1 2.2 
HS 1101 Wheat or meslin flour 12.2  2.8 21.1 39.8 50.3 48.6 55.1 50.2 1.8 
HS 0303 Frozen fish 55.1 23.5 16.8 24.7 37.7 31.1 54.8 30.6 1.8 
HS 1511 Palm oil and its fractions 10.1  15.0 38.4 18.1 47.7 23.3 34.5 30.0 1.1 
HS 2309 Animal feed 33.2 26.9 25.0 22.5 31.5 20.4 24.7 19.0 0.8 
HS 1902 Pasta 8.4  9.9 9.4 13.4 20.3 19.1 21.8 27.0 0.7 
HS 1507 Soya-bean oil and its 
fractions 34.5 51.3 21.6 21.1 20.0 19.2 18.0 22.4 0.6 
HS 1001 Wheat and meslin 25.5  46.8 7.8 0.0 8.0 6.2 12.2 15.1 0.4 
HS 1107 Malt 6.0 9.9 11.8 9.1 13.7 8.6 11.0 9.1 0.4 
HS 2207 Undenatured ethyl alcohol 
≥80% vol. 5.6 5.8 5.7 5.6 7.5 7.3 8.9 12.2 0.3 
HS 2208 Undenatured ethyl alcohol 
<80% vol. 1.9 2.3 1.7 3.2 6.2 6.1 6.1 7.3 0.2 
HS 0402 Milk and cream, sweetened 7.1  11.2 3.8 5.4 8.9 7.6 5.9 7.2 0.2 
HS 2301 Flours, meals and pellets 0.6 0.6 0.2 1.1 2.0 2.8 5.5 3.5 0.2 
Sub-total 301.9  327.9  264.8  267.6  432.5  343.5 500.8 455.0 16.2 
HS 01-24 359.6  406.2  335.8  347.8  530.8  417.9 576.2 535.3 18.7 
 (% of totala) 14.7  10.5 10.6 13.7 17.9 15.7 18.7 16.2 N/A 
N/A Not applicable. 
a All products. Note: Agricultural products are in the HS classification (HS 01-24), including fisheries products. The 
principal products are identified in order of the value exceeding US$5 million in 2013. 
Source: WTO Secretariat calculations, based on data from the UNSD Comtrade database. 
4.1.1  Agricultural policy 
4.6.  In September 2009, the Ministry of Agricult ure, Livestock and Fisheries (MAEP) split into 
three ministries: the Ministry of Agriculture (MA), th e Ministry of Livestock (ME) and the Ministry of 
Fisheries (MP). 
4.7.  Since 2011, the principal agricultural support  programme has been the Sectoral Agriculture, 
Livestock and Fisheries Programme (PSAEP), with back-up from COMESA, aligned on the African 
Union's Comprehensive Africa Agricultur e Development Programme (CAADP/NEPAD).2 The 
objectives of this new Programme are similar to those defined in the Poverty Reduction Strategy Paper of 2003 and repeated in the National Rural Development Programme (PNDR) adopted in 
2005. They are numerous, but so far the authoritie s have not mobilized the resources needed to 
achieve them. The current objectives are to ex pand the units producing goods and exploiting 
resources and to place them on a permanent basis; to raise productivity and competitiveness 
sustainably; to contribute towards food and nutritional security and to lessen the risks for the most 
vulnerable; to develop access to domestic and export markets; to ensure better governance of institutions; and to build the capacity of stakeholders. 
4.8.  In March 2015, Madagascar notified the WTO that no agricultural export subsidies had been 
paid out over the period 2013-2014; Madagascar also notified total domestic support for 
agriculture amounting to US$47,000, comprising f ood aid and the supply of various services to 
producers in order to increase agricultural production and train producers. 
4.1.1.1   Inputs 
4.9.  Overall, since 2008, increasing agricultural production does not appear to have benefited 
from the measures needed if it is really to su cceed. Among the major problems is the limited use 
of fertilizer (Chart 4.2). Rice yields, for exampl e, could be 6-7 tonnes/hectare using local improved 
seeds and even up to 13 tonnes using hybrid se eds (a combination of fertilizer and improved 
seed), as compared to the current average of 2 to 3 tonnes. In 2014, however, the Government 
                                               
2 For further details, see online information from NEPAD, viewed at: http://www.nepad.org . WT/TPR/S/318 • Madagascar 
 
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  stated that rice-growing would thenceforward rece ive support to help farmers to acquire improved 
seeds and fertilizers in particular. The Government also indicated that it supported diversification to soya and sorghum. 
Chart 4.2 Fertilizer use, 2010-2012 
(kg/hectare of arable land) 
2.5 11.322.331.134.939.958.7210.2
050100150200250
Madagascar Benin Ghana Zambia Malawi Kenya South Africa MauritiusSub‐Saharan Africa  (14.3)
 
Note:  Simple average over three years. 
Source: World Bank, World Develo pment Indicators, viewed at: 
http://databank.worldbank.org/dat a/views/variableSelection/selectvariables.aspx?source=world-
development-indicators . 
4.10.  A National Fertilizer Strategy was published in 2006.3 The Madagascar Action Plan (MAP) 
envisaged the creation of agri-business centres to facilitate access to inputs and to store them, financed by USAID's Millennium Challenge Account. When financing for the project halted with the 
onset of the political crisis in 2009, its activities could no longer continue. The Strategy had also 
recommended introducing specific fertilizer credit; this would facilitate the supplier credit given by fertilizer distributors through a partnership betw een them and microfinance institutions. It would 
increase the amount of credit granted to finance fertilizer and at the same time lower its cost, 
which is a major obstacle to increasing the volumes marketed. 
4.11.  The private sector is exclusively responsibl e at present for importing and distributing inputs. 
The market appears to be competitive. It comprises importers-wholesalers, each one being the 
sole representative of a multinational company. There are no regulations governing the import of fertilizer into Madagascar. Prices are fixed by the private sector without any State involvement. For the 2014-2015 rice-growing season, however, the Government financed some of the fertilizer for 
small producers; the supply is entirely free of charge for the most vulnerable; for those whose 
production is solely for own consumption the subsidy is 20%; while for producers able to keep back some of their production for sale, the rate is 50%. 
4.12.  Innovative efforts have been made to produce fertilizer by making use of guano deposits.
4 
The fertilizer meets European and American standards for organic products. Its cost is less than one third that of chemical fertilizer. Organic fertili zer's share of total fertilizer use is around 15%. 
Moreover, one of the byproducts of the Ambatovy mining project is a fertilizer, ammonium 
sulphate, of which it is hoped to sell 210,000 tonnes a year. 
4.13.  Expanding agricultural production in genera l, and food crops in particular, means the supply 
of large quantities of seed. In 2014, however, on ly small quantities of improved seeds were used 
and, as a result, yields were also low. The main  constraints are the small volumes produced. After 
special tests had been carried out by the MA, in  September 2014, 100 tonnes of hybrid rice seeds 
were imported from China; and 60 tonnes of certified seeds were distributed to 2,400 producers 
by the MA through the National Agronomic Research Centre (FOFIFA), created in 1974. The 
                                               
3 MAEP, Lettre de présentation de la Stratégie nationale sur les engrais (SNE), viewed at: http://www. 
maep.gov.mg/Lettre%20%20SNE.pdf  
4 Guano (from the Quechua "wanu", excrement of sea bi rds and bats) is a nitrate-rich organic fertilizer 
exported to over 40 countries since 2008, including Europe and the United States. WT/TPR/S/318 • Madagascar 
 
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  FOFIFA produces seeds which are then multiplied at seed multiplying centres (state-owned) by 
seed producers' groups or private operators. The cost of the seed is determined according to its 
quality and the market price. FIFAMANOR, a semi -public structure, produces foundation seed for 
potatoes, sweet potatoes and wheat, for sale to farm ers at a subsidized price. The National Official 
Seed and Seedling Control Agency (ANCOS) was set up in 2013. 
4.1.1.2  Trade and tax measures 4.14.  In 2010, tariffs were lowered in order to boost agricultural production. Pedal pumps became 
exempt from customs duty to encourage developmen t of the agricultural sector. The rate of duty 
on certain inputs, raw materials, machines, materials and equipment was set at 5%. The rate was harmonized at 10% for components and accessories of HS 72.02. The tariff on these articles and products could advantageously be zero-rated in order to promote agricultural production. 
4.15.  Since 2008, tax exemption measures have been introduced, then abolished and 
subsequently reinstated, which is not conducive to investment; in 2014, agricultural firms were subject to an ordinary law tax regime, but the 2015 Finance Law provides for income tax 
exemption for newly created agricultural firms for the first two financial years. 
4.16.  The marketing of agricultural products is governed by a Decree of 1965 on the collection of 
agricultural, livestock and fisheries products, which specifies that only collectors approved by the 
Government on a purely personal basis and possessing a professional card may collect agricultural, 
livestock or fisheries products, either as itinerant traders or at fixed facilities, against payment, either on their account or on behalf of someone else. All agricultural producers, fishermen and foresters must sell to the collectors. The aim of this requirement is to stimulate efficient collection 
and transport to wholesalers.
5 Exporting firms must be approved as collectors. According to some 
observers, the compulsory collection system needs to be reviewed because it mainly favours intermediaries and, because of inadequate mean s of communication and transport, farmers can 
find themselves at their mercy. 
4.1.1.3  Land reform and investment 4.17.  Land tenure security for Malagasy citizens has been a development priority since 2005, with 
the aim in particular of increasing agricultural production (Section 2.3.6). At the same time, since 
2008 successive governments have advocated foreig n investment and regional chiefs have been 
asked to identify zones for agricultural investment in order to group investors together. 
4.18.  The criteria for assigning land to foreigners have changed from year to year since 2008. 
According to the Land Observatory, a clear di vision of responsibilities among the various 
government services and local authorities is needed so that all the local stakeholders involved can express their views on projects in advance and so avoid disputes that could potentially constitute a 
disincentive to investment. The measures currently in place do not yet ensure equitable sharing of 
the benefits derived from the entry of investors. 
4.1.2  Policy by subsector 
4.1.2.1  Rice, cassava and maize 
4.19.  Annual consumption of rice at 120-140 kg/per capita is one of the highest in the world; 
production is extremely uneven (Chart 4.3) and does not cover domestic demand. Rice imports 
rose from less than US$50 million to over  US$152 million between 2009 and 2014 (Table 4.3); 
even though the volume imported is low compared to domestic production, it supplies one third of 
the market on average. Since 2005, the import of rice in any state (seed, paddy, husked, etc.) has benefited from a zero tariff and exemption from VAT.
6 Any change in the price of rice or in supplies 
has far-reaching consequences for food security and household incomes. This is why the Rice 
                                               
5 Decree No. 65-046 of 10 February 1965 on the collection of agricultural, livestock and fisheries 
products listed in ministerial or provincial orders. Order No. 5912-MPCA/93 of 17 November 1993 on 
obligations relating to the collection of local pr oducts throughout national territory, viewed at: http://madadoc. 
irenala.edu.mg/10964_Ralisoa%20Noroseheno.pdf . 
6 Law No. 2005-015 of 26 July 2005 made imports of rice exempt from customs duty. WT/TPR/S/318 • Madagascar 
 
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  Observatory was set up to monitor price and production trends; its surveys are published each 
week. Since 2011, the export of rice has been "suspended" under a decree.7 
Chart 4.3 Rice production, 2007-2014  
(million tonnes) 
0.00.51.01.52.02.53.03.54.04.55.0
2007 2008 2009 2010 2011 2012 2013 2014a  
a Estimates. 
Source: Information provided by the authorities. 
4.20.  As mentioned above, collectors alone are authorized to collect agricultural products such as 
rice from farmers and then sell them to wholesaler s; the purpose of this role is to prevent the 
proliferation of intermediaries and to place their activities on a formal basis. It was not possible to find out whether this mechanism is viewed as efficient as it currently operates or whether it will 
last. 
4.21.  Other food crops such as maize and cassava are also produced, mostly for own consumption 
and rarely traded internationally. In 2008, Madagascar adopted the policy development letter for 
the cassava subsector, with support from ASARECA
8, an African network bringing together a 
number of East African countries to draw up national policies and standards for cassava and its byproducts. 
4.1.2.2  Cloves 
4.22.  Madagascar is one of the world's three largest producers and exporters of cloves and 
recorded spectacular growth in exports following soaring global prices in 2011 (Table 4.2).
9 Annual 
turnout is uneven, however, ranging from 6,000 tonnes during the rest cycle of clove trees or 
when they have been affected by cyclones, to 19,000 tonnes when there is a good harvest. Since 
2011, cloves and clove essence together have been one of the agricultural products yielding the 
most export revenue. The clove-growing area is estimated at 40,000 hectares. Cloves, their 
essential oils and leaves, which can be distilled from Madagascar's clove trees, are reputed to 
contain a strong concentration of eugenol.  
4.23.  Currently, only 10% of production is extracted locally in the form of essence. Custom duty 
on all clove products, whether or not processed, is 20%. In November 2012, the Association of 
Clove Exporters of Madagascar was set up with the aim of reorganizing, standardizing and 
upgrading the subsector in collaboration with the Government. Exports of cloves are subject to a 
quality standard, whose observance is monitored by the analytical laboratory of the Ministry 
responsible for trade.  
                                               
7 Decree No. 2011-122 of 7 March 2011. 
8 Association for Strengthening Agricultural Rese arch in Eastern and Cent ral Africa, viewed at: 
http://www.asareca.org . 
9 Antananarivo University (2012). WT/TPR/S/318 • Madagascar 
 
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  4.1.2.3  Vanilla 
4.24.  Madagascar is the world's leading exporter of vanilla (around 67% of total global tonnage) 
and in 2014 exports reportedly amounted to US$114 million (Table 4.2). Vanilla production is estimated to cover 65,000 hectares, particularly in the east of Madagascar. 
4.25.  Since 2001, the professions of vanilla plan ter and processor have been regulated, with a 
new order issued in December 2013 to reorganize the subsector and enhance the professional skills of those involved from the production to the export stage.
10 A platform for consultation 
among the various actors in the vanilla subsector has existed since 2007. It is responsible for 
distributing professional cards to planters and processors, determining the dates of the harvest 
and the start of the season, and monitoring green  vanilla markets. The National Association of 
Vanilla Exporters is composed of around 240 sm all groups and over 15,000 planters. Exports of 
vanilla are subject to a quality standard, whose observance is monitored by the analytical 
laboratory of the Ministry responsible for trade. 
4.26.  Although previously vanilla was always exported raw and vanillin was extracted in the 
importing countries, in recent years local firms have started to extract and export natural vanillin, 
which is strongly protected against imports. It cannot be imported into Madagascar without prior authorization from the Ministry responsible for trade. The maximum tariff of 20% applies, as well 
as VAT of 20%. 
4.1.2.4  Seed cotton 4.27.  In 2014, a draft text regulating the cotton subsector was being prepared. Four operators 
were ready to invest in factories in the south-west of the country, giving more support to 
cotton-growers. The factories supply the seed, fertilizer and phytosanitary products on credit, as 
well as the equipment. Nevertheless, cotton-growers frequently finance their acquisition of materials themselves with the help of microfinance, although this source of financing is often 
described as insufficient. 
4.28.  Once it has been produced, seed cotton is stored and then collected by private 
collectors-carriers who are selected following an invitation to bid from the factories According to 
the press, floor prices determined by a regional or der in the south-west of Madagascar are in fact 
more like ceiling prices and this is likely to discourage production.
11 VAT must be paid on seed 
cotton, together with customs duty of 5%. Prod uction and trade in products of seed cotton 
ginning, cotton spinning, knitting and weaving and clothing are described in the section on 
manufactures (Section 4.6.2.2). 
4.29.  Since the early 2000s, HELVETAS Swiss Intercooperation has been producing cotton that 
meets organic standards and fair trade principles in Madagascar.12 In view of its expertise, in 2008 
industrialists in Madagascar's textiles subsector sought support from HELVETAS to launch the 
production of organic cotton in Madagascar so as to take advantage of the entire value chain on the spot. The project encompasses sustainable production of organic cotton, its certification and 
promotion among potential buyers. 
4.1.2.5  Tobacco 4.30.  Around 29,000 tobacco planters have been recorded. Since 1969, the Malagasy Tobacco 
Board (OFMATA) has had a monopoly on tobacco production in Madagascar. It supports producers, 
fixes a floor price for buying tobacco and provides inputs on credit. It ensures the supply of 
tobacco leaves to the two factories manufacturing cigarettes and chewing tobacco. It is estimated that domestic production amounted to around 3,000 tonnes in 2006. OFMATA also has a monopoly 
on the import of tobacco; it may import varieties that are not produced locally in order to 
manufacture cigarettes. Imported cigarettes are su bject to the maximum tariff protection of 20%, 
                                               
10 Decree No. 2001/234 of 24 March 2001. Interministerial Order No. 35 255-2013 of 8 December 2013 
regulating the general conditions fo r marketing vanilla in Madagascar. 
11 Viewed at: http://www.edbm.gov.mg/fr/Actualites/Actualites/Filiere-coton-des-operateurs-contre-la-
fixation-de-prix . 
12 Helvetas Swiss Intercooperation, viewed at: http://madagascar.helvet as.org/fr/activites_ 
madagascar/projects_a_madagascar/projet_promoti on_biocoton_dans_le_su d_ouest_de_madagascar . WT/TPR/S/318 • Madagascar 
 
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  as well as 20% VAT, and excise duty of 325% wh ich has been harmonized for local and imported 
products. In 2014-2015, however, the revised Fina nce Law introduced reduced duty for cigarettes 
which incorporated at least 70% of locally produced tobacco. 
4.1.2.6  Lychees and other horticultural products 
4.31.  Madagascar has managed to create horticultural subsectors specializing in export. Among 
these, lychees are currently one of the leading export-earning agricultural products. Domestic production is estimated to be around 100,000 to nnes, one quarter of which is exported. Lychees 
are a seasonal crop and most of the harvest is sold on the domestic market or exported between 
November and January. They are mostly exported fresh or sulphured, but for some years efforts have been made to export processed lychees (pulp, juice, etc.). Fresh fruit is exported by air and processed products by sea. The largest market for Madagascar's lychees is France, where it 
competes with lychees produced in South Africa and Mauritius. New markets in Europe have been 
developed in recent years (Germany, Netherlands, Russian Federation). 
4.32.  Since 2006 there has been a platform to encourage regular consultation between the 
subsector's stakeholders (producers, collectors, carriers and exporters) and the State. A new 
regulatory text has governed the organization of the subsector since 2013. An optional export 
standard applies to lychees. 
4.33.  The production of vetiver has developed in Madagascar since 2008, with support from The 
Vetiver Network International, which encourages  worldwide use of the Vetiver System for a 
sustainable environment, especially in the effort to combat soil erosion. Bemasoandro Plantation produces vetiver and vetiver essential oil found in  90% of the perfumes sold in the world. Annual 
trade in vetiver amounts to 250 tonnes.
13 
4.1.2.7  Cocoa 4.34.  Madagascar's cocoa is reputed to be one of  the best in the world because of exceptional 
local conditions and old varieties. The majority is produced under ECOCERT labels (organic and fair 
trade). Production has risen, but remains below 10,000 tonnes, and exports have fluctuated considerably since 2008. Exports of chocolate and cocoa paste have increased, but still do not 
exceed US$1 million. There is 5% customs duty  on cocoa beans, whether or not processed. 
4.2  Livestock and animal products 4.35.  Madagascar has enormous livestock-breeding potential because of its vast open spaces, and 
its situation as an island, sheltering it from certain major epidemics, means that its animal health 
status is particularly favourable.
14 Because of the wide open spaces and the lack of any developed 
agro-industrial structure, livestock farming is extensive. 
4.36.  Almost half of the farms recorded in 2010 bred zebus, the most common draught animal 
and also the most sought after for export. Meat from Malagasy zebus has an international 
reputation and cattle on the hoof are expo rted to neighbouring countries. Until 1997, 
three industrial abattoirs had been approved for export of a total of 7,000 tonnes to the European 
market under the ACP Protocol on meat. In 1997, however, following the emergence of anthrax 
among zebus, all the Malagasy facilities making meat products were removed from the list of 
approved facilities for imports by the European Union, which caused the dismantling of the subsector. 
4.37.  With increased demand for meat in the neighbouring islands and in Asia, revival of the 
bovine meat subsector has become a priority and a policy to develop the zebu component was adopted in 2012. Since 2012, requests for financing from technical and financial partners, and calls 
for private investment, have been launched by th e ME. Foreign investors have in fact already 
launched some projects while others are still under consideration. Two abattoirs have been built by 
Chinese companies in the past two years and export bovine meat to the Asian market. A 
partnership project with the region of Mayotte is under way in order to establish an abattoir in the 
                                               
13 Viewed at: http://www.vetiver-madagascar.mg . 
14 Viewed at: http://www.fao.org/docrep/v1650t/v1650T0j.htm . WT/TPR/S/318 • Madagascar 
 
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  southern part of the island to export bovine meat to this French department, in accordance with 
European standards. 
4.38.  The Livestock Fund, created by law in 2006, finally started to operate in 2012; its resources 
enable the Ministry of Livestock to provide breeders with support to finance the purchase of 
medicines, and to compensate breeders in the event of an epidemic, etc. The Fund is financed by 
fees payable on the sale of certai n products for veterinary use, on the sale of animal feed, and also 
by taxes on export of the subsector's products, which is likely to penalize exports.15 The cost of 
obtaining an import or export permit for live animals ranges from 2% to 5% of the f.o.b. or c.i.f. 
price and for food of animal origin it is 2% of the f.o.b. or c.i.f. price. 
4.39.  In addition to these high taxes, be tween 2002 and 2011 the export of live cattle was 
banned, and then authorized once again up to 2012, when it was banned once more. According to 
the authorities, this is to combat the cattle rustli ng which is prevalent in the extensive production 
zones.16 
4.40.  Meat- and bone-meal for animal feed and an y feed containing it are prohibited. The import 
o f  m e a t  f r o m  E u r o p e  i s  a l s o  b a n n e d  ( S e c t i o n  3 . 3.1.1). All the regulatory texts concerning the 
livestock subsector were compiled in 2012.17 
4.41.  Imports of dairy cows that are not prohibited are subject to customs duty of 20%, unless 
this has been suspended, as was the case under the Finance Law for 2011. This lack of 
predictability in trade policy is prejudicial to decision-making at industrial level. Furthermore, tariffs of up to 20% on most products do not encourage investment in dairy industries (cheese, yoghurt) because of the relatively high cost of agricultural raw materials caused by this strong 
tariff protection. For example, the milk produced (around 50 million litres) covers around half the 
volume consumed so powdered milk has to be imported and is subject to 20% customs duty, plus VAT. Manufacturers of dairy produce pay these high rates of duty on their inputs, which cannot but 
undermine the competitiveness of their products.
18 
4.42.  With an abundance of plants for honey bees, with typically exotic aromas, the bee-keeping 
subsector plays an important role in Madagascar's economy. In addition to the income it provides 
for small producers, it makes a key contribution to protecting the environment against mass 
deforestation and bush fires. Madagascar had long exported honey to Europe, but export was suspended in the 1980s because the honey did not meet SPS standards. 
4.43.  In October 2011
19, Madagascar was once again authorized to export to the European 
market. According to the authorities, potentia l sales amount to 50,000 tonnes, over €100 million 
each year (Section 4.2), but Madagascar has not been able to take full advantage because of the varroasis epidemic in 2010. The ME, in conjunction with operators belonging to the National 
Federation of Malagasy Beekeeper s, is seeking financial support to enable the revival of exports of 
honey in sufficient quantities. Exports currently go to markets in Mauritius, Switzerland and France. Most of the products exported are certifie d organic or bear the "fair trade" label. Honey 
production will also depend on the Government's ability to protect forests, the feeding source for 
bees. 
4.44.  Foie gras has also made the reputation of Madagascar's gastronomy for around 30 years 
and is sold under the label "Foie gras de Mada gascar". Ducks are bred by small producers who 
                                               
15 Order concerning resources for the Live stock Fund trade account, viewed at: 
http://www.elevage.gov.mg/wp-content/uploads/ 2012/07/Fonds-de-lElevage-Ressources-du-Compte-de-
Commerce.pdf . 
16 Interministerial Order No. 20.834/2012 of 1 Au gust 2012 repealing Interministerial Order 
No. 19533/2011 of 20 June 2011 temporarily lifting the ban on exporting cattle on the hoof. 
17 Interministerial Order No. 3168/2001 of 16 March 2001 banning the import of live animals and 
foodstuffs of animal origin (coming from Europe). ME (2012). 
18 Viewed at: http://www.inter-reseaux.org/IMG /pdf/GDS58-p26-p27-p28_Rova.pdf . 
19 In February 2011, the EU's Directorate-General fo r Health and Food Safety approved the plan for 
monitoring chemical residues in Madagascar's honey. In July 2011, the ban on importing products of animal origin from Madagascar was lifted. Since 14 October 2011, Ma dagascar has been authorized to export honey to 
the European market, viewed at: http://eur-lex.europa.eu/legal-
content/FR/TXT/PDF/?uri=CELEX:32011D0395&from=FR . List of establishments approved to export to the EU, 
viewed at: http://ec.europa.eu/food/international/trade/third_en.htm . WT/TPR/S/318 • Madagascar 
 
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  receive technical and sanitary support from the Government. In addition to small-scale processing, 
two firms process foie gras industrially in accordance with international health requirements. Currently, most of the foie gras and its byproduc ts are consumed on the domestic market; exports 
go to Mauritius. According to the authorities, measures have been taken since 2013 by the 
veterinary administration and those involved in the subsector in order to revive the export of 
foie gras to other markets. 
4.3  Fisheries and aquaculture 
4.3.1  Overview 
4.45.  With a coastline extending for 5,600 km, an exclusive economic zone covering 
1,140,000 km
2 (the 14th largest in the world), and numerous rivers, lakes and mangrove swamps, 
Madagascar has impressive fisheries and aquaculture potential. In 2013, production was 
129,000 tonnes and the subsector accounted for 14% of the GDP. 
4.46.  Several fishing agreements covering Madagascar's waters have been signed with foreign 
partners and there is large-scale fishing by foreign vessels. Chart 4.4 shows the scale of the 
various fishing activities; in 2013, total exports of fisheries products by Malagasy fishing and 
aquaculture companies, whose capital is mostly foreign-owned, amounted to some 22,250 tonnes, 
of which 4,200 tonnes from aquaculture. To this  must be added deep-sea fishing by foreign 
vessels under bilateral agreements, whose total tonnage in 2013 was said to be 
around 12,000 tonnes. 
4.47.  According to recent studies, confirmed by the statistics available (Chart 4.5), total catches 
are in fact 40% above the volumes recorded officially20, and in general the Ministry of Fisheries 
Resources and Fishing (MRHP) only appears to exert control over fishing in Madagascar's waters in 
theory. 
Chart 4.4 Principal exports of fisheries products, 2013  
(Tonnes) 
Exports by Malagasy 
fisheries establishments
22,253   
including: aquaculture
4,222   Deep-sea fishing by EU 
vessels
8,000   Deep-sea fishing by 
Japanese vessels
334   Deep-sea fishing by 
Chinese vessels
3,680   
Total: 34,267 tonnes  
Source: Information provided by the authorities. 
                                               
20 Le Manach F. (2012). See also Le Monde  of 6 July 2012. WT/TPR/S/318 • Madagascar 
 
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  Chart 4.5 Exports of fisheries products fr om Madagascar and imports from partner 
countries, 2007-2013 
(US$ million) 
100120140160180200220
2007 2008 2009 2010 2011 2012 2013"Mirror" statitstics (based on data from 
Madagascar's partners)
Malagasy data
 
Note: WTO definition for fisheries products. 
Source: WTO Secretariat calculations, based on data from the UNSD Comtrade database 
4.3.2  Production by Malagasy companies 
4.48.  Overall, the trend in exports of fisherie s products by Malagasy companies between 2007 
and 2013 was negative (Table 4.4). Shrimp aquaculture production, in particular, which accounts for a large part of production in this subsector, fell sharply following detection of white spot 
disease in shrimps. The production of canned tuna also showed a steep decline. 
4.49.  On the other hand, crab exports increased substantially, particularly to China, raising 
concerns within the Government as to the sustainabi lity of this activity. Since 2014, exploitation of 
mangrove crabs has been subject to new regulati ons limiting total annual catches to 5,000 tonnes 
and the total volume exported to 4,250 tonnes. Th e legislative framework for fishing dates back to 
1993 and that on aquaculture to 2001 (Table 4.5). 
Table 4.4 Exports of fisheries and aquaculture products, 2007 and 2013 
Product 2007 2013 
Tonnes Tonnes Volume (%) Value (%) 
Canned tuna 11,686 7,976 36 26 
Farmed shrimps 7,586 4,212 19 33 
Wild shrimps 4,908 3,461 16 17 
Fish 1,137 2,404 11 10 
Crabs 987 1,966 9 7 
Octopus 1,266 1,430 6 3 
Trepang  294 397 2 1 
Spiny lobsters  285 238 1 2 
Squid 67 55 0 0 
Wild eels 0 53 0 0 
Shark fins 38 33 0 0 
Farmed eels 0 10 0 0 
Glass eels 5 7 0 0 
Fish bladders  4 5 0 0 
Bichiques 0 2 0 0 
Slipper lobsters 1 1 0 0 
Total 28,280 22,253 100 100 
Source: Fisheries Health Authority (ASH), Rapport d'activités, 2013; and information provided by the 
authorities. WT/TPR/S/318 • Madagascar 
 
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  Table 4.5 Aquaculture and fisheries legislation 
Legislation 
General legislation 
Ordinance 93-022 of 04.05.1993 Regulating fisheries and aquaculture  
Aquaculture  
Law No. 2001.020.0.20 of 
12.12.2001 Development of responsible and sustainable shrimp farming  
Order No. 16646/2008 of 
19.08.2008 Regulating the practice of cage culture  and installation in fresh and brackish waters  
Order No. 3588/2013 of 
22.02.2013 Administrative and technical measures for gr anting authorizations to farm seaweed at 
village level  
Order No. 3591 of 22.02.2013  Administrative and technical measures for granting authorizations for establishments 
farming holothuria scabra  
Fisheries 
Decree No. 94.112 of 13.02.1994 General organization of sea fishing  
Decree No. 97.1455 of 18.12.1997 General organization of the collection of marine fisheries products  
Decree No. 97.1456 of 18.12.1997 Regulating fishing in continental and brackish waters within the State's public domain  
Decree No. 2000.415 of 16.06.2000 Defining the criteria for engaging in coastal shrimp fishing  
Decree No. 2009.049 of 12.01.2009 Organization of fishing and the collec tion of fisheries products in continental and brackish 
waters within the State's public domain  
Decree No. 2004.169 of 03.02.2004 Regulating fishing for holothuria scabra  
Order No. 0525 of 05.02.1975  Defining the regime for mother ships for shrimp fishing and vessels for collecting shrimps  
Order No. 060.2005 of 17.01.2005 Regulating fishing for octopus  
Order No. 163.76 of 21.10.2005 Method of exploitation of mangrove crabs (scylla serrata)  
Order No. 16825/2008 of 
28.08.2008 Ban on transporting crayfish of the species procamburus throughout the territory of the 
Republic of Madagascar  
Decree No. 169.53/2008 of 
04.09.2008 Determining the rules applicable to the headrope of nets used by vessels for industrial 
and small-scale coastal shrimp fishing  
Order No. 2054/2009 of 
06.02.2009 Determining the rules applicable to the marking of fishing gear for coastal shrimp fishing  
Order No. 32.101/14 of 24.10.2014 Regulating the exploitation of Madagascar's mangrove crabs  
Order No. 32.102/14 of 24.10.2014 Export of Madagascar's mangrove crabs  
Source: MRHP, viewed at: http://www.peche.gov.mg.  
4.50.  Exports of fisheries products mostly go to the Chinese and European markets; Madagascar's 
sanitary standards have been determined in orde r to meet the requirements of these markets, 
together with strict regulation of fisheries esta blishments (Section 3.3.1). Following a favourable 
audit in June 201221, a new list of Malagasy establishments authorized to export fisheries products 
to the European Union was published in August 2014.22 
4.51.  The MHRP issues fishing licences to companies which request them, in line with a protocol 
signed between the Ministry and the company. Every vessel must hold a fishing licence and pay a 
fee the amount of which varies depending on th e category of vessel and the target catch (tuna, 
shrimps, crustaceans, fish, etc.). For fisherie s products, the MRHP issues free of charge to 
operators which have paid their fees certificates of conformity from the regional directorates 
involved in export and sanitary certificates i ssued by the ASH in the region concerned. The 
products are not subject to any quality test: accordin g to the ASH, strict application of the sanitary 
quality management system by the operators and the various official controls carried out by 
ASH officials suffice to guarantee the sanitary qu ality of the products processed in facilities 
approved for export and to be able to certify them. 
4.52.  Fisheries products are collected from traditional fishermen by several thousand licensed 
collectors, who distribute or export them. The pr ofession of collector is regulated (Table 4.5). 
Collectors may be foreign nationals. 
4.3.3  Deep-sea fishing 
4.53.  With the exception of the fishing restrictions indicated above, the authorities have no policy 
on maximum catches per species; the measures appear to be decided on an ad hoc basis when stocks are running out and closed seasons may be announced to protect stocks (octopus, spiny 
lobster, shrimps). Deep-sea fishing in Madagascar's waters, in particular, is not subject to 
maximum tonnages for catches. It is in principle governed by protocols of agreement. Such agreements have been signed with the European Union, Japan and with foreign private companies. The agreements are not available on an official website and it proved impossible to obtain them. 
                                               
21 Audit report on control systems for fishery prod ucts intended for export to the European Union , 
viewed at: http://ec.europa.eu/food/fvo/act-getPDF.cfm?PDF-ID=9872 . 
22 Viewed at: https://webgate.ec.europa.eu/sanc o/traces/output/ MG/FFP_MG_en.pdf . WT/TPR/S/318 • Madagascar 
 
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  4.54.  The 2007 fisheries agreement with the European Union was renewed for the period 
2013-2014, and then for the period 2015-2018. In addition to tuna, for which the terms of the 
agreement do not stipulate any limits on catches, there is a maximum annual volume of 250 tonnes of sharks under the agreement. The agreement also specifies the maximum number of 
fishing vessels, namely, 40 freezer tuna seiners and 54 surface longliners for the 
period 2015-2018. 
4.55.  Moreover, the revenue under this agreement appears to be low in comparison with the 
value of the products exported. The new agreem ent provides for fees payable by shipowners 
amounting to €60/tonne for the first two years of the new protocol and €70/tonne for the last two years. In addition, an annual financial contribution is paid to the Malagasy Government by the EU Commission. For the period 2015-2018, the amount remains unchanged: €6.1 million for four 
years, i.e. €1,525,000 per annum. For reference tonnage of 15,000 tonnes (which is not a 
maximum because it may be exceeded subject to a fine of €65/tonne), this counterpart contribution corresponds to €203/tonne. The fee paid by European shipowners, however, is only 
€35/tonne caught.
23 The selling price of tuna on the global market at the end of 2014 was around 
€1,000 to €1,800/tonne, depending on the species.24 
4.56.  The fisheries protocol of agreement be tween Japan and Madagascar, signed in 2012 for a 
period of three years, is not available either. It appears to allow 20 Japanese surface longliners 
(compared to 44 in the previous agreement) to fish in Madagascar's waters. There is no maximum catch. Fees are set at US$2,000 to US$4,500/vessel per month, plus duty of US$1,000 per entry into the exclusive economic zone (EEZ). Accordin g to the authorities, only one Japanese vessel 
caught 344 tonnes in 2013, giving a figure of €16/tonne. 
4.57.  Lastly, the other operators, including those from China, fish under agreements between 
private companies and the MPRH. It did not prove possible to view these agreements or to know 
how many there are. 
4.58.  Imports in the fisheries subsector are subject to relatively strong tariff protection of 18.8%, 
well above the overall average of 13%. These high  customs duties raise the cost of processing. 
Partly for this reason, investment in aquaculture and canning is often made under the free-zone 
regime. 
4.3.4  Conservation and sustainable management of fisheries resources 
4.59.  In view of the foregoing, reform appears necessary if the declared objectives of the MRHP 
for the conservation and sustainable management of fisheries resources are to be reached. To 
achieve this, it is essential to reinforce the fisheries control systems; to monitor more closely and provide more information on fishing and aquaculture, as well as more transparency in fisheries 
agreements. The system for managing fishing rights also needs to be upgraded so as to avoid the 
sudden depletion of fisheries resources that has affected other countries in the past. 
4.60.  Another of the Government's declared priori ties is to improve operation of the institutions. 
Currently, around half-a-dozen institutions are responsible for defending the subsector's interests, 
although none of them has sufficient resources to achieve its objectives. These include the Malagasy Fisheries and Aquaculture Agency, crea ted in June 2005, which is responsible for 
collecting fees and for financing, monitoring an d evaluating the programmes of Malagasy public 
institutions, research institutions and organizations working towards sustainable development of 
fisheries and aquaculture. Further support structures include the Fisheries Monitoring Centre, the Fisheries and Aquaculture Economic Observatory, the Aquaculture Development Centre, the 
Fisheries Research and Development Centre and the Fisheries and Aquaculture Development Unit. 
It would appear that there is considerable leeway for streamlining these entities. 
                                               
23 European Union, Main Issues of the Sustainable Fisheries Partnership Agreement, viewed at: 
http://ec.europa.eu/fisheries/cfp/international/agreements/madagascar/index_en.htm . 
24 Online information from Th e Fish Site, viewed at: http://www.thefishsite.com/reports/?id=3913 . WT/TPR/S/318 • Madagascar 
 
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  4.4  Forestry 
4.61.  Madagascar's forests harbour exceptional fauna and flora and are one of the main pillars of 
eco-tourism, exploitation of timber and fauna , and the country's pharmacopeia. Forest cover 
decreased from 9.7 million hectares in 2000 to 9. 2 million in 2010, partly because of unauthorized 
felling and illegal export of protected tropical woods such as rosewood and palisander. Despite 
reforestation efforts, total forest cover is shrinking. According to the FAO, forests still cover some 22% of Madagascar's territory. Around 24% of the fo rested area was classified as "primary" forest 
in 2015.
25 
4.62.  In general, the value of timber exports and of their products has dropped sharply since 
2008, offset in part by the increase in the value of exports of essential oils and medicinal plants. 
The decline in exports of palisander wood is the result of the ban on exporting precious woods 
unless they have been worked. In 2013, despite considerable potential, only some US$7 million 
was earned from exporting forestry products (0.5% of it came from levies on exports). 
4.63.  The Ministry of the Environment, Ecology and Forests (MEEF)26 has indicated in connection 
with this report that one of its current goals is to "restructure" the precious woods subsector, in 
collaboration with the public and private bodies concerned and civil society, whether national or international. In September 2014, measures were announced to halt the illegal felling and export 
of precious woods. 
4.64.  The authorities have also announced as an objective the setting up of eight priority Koloala 
sites. Koloala is a response to the desire to strike a balance between the need to protect the biological and ecological heritage of Madagascar's forest system, guaranteed by the system of 
protected areas, and how to satisfy the ever-gro wing population's need for wood and energy, 
which must be provided sustainably. The following measures have been taken: 
 adoption of Decree No. 2013/785 of 22 October 2013 laying down the terms for 
delegating forest management, including the protected areas, to public or private 
organizations; 
 updating of all actors involved in the subsector; training and building traceability 
capabilities for forest agents; 
 inclusion of rosewood and ebony in Appendix II to the CITES in March 2013; and 
submission of an action plan for the rosewood subsector to the CITES Standing Committee in Geneva in July 2014. Madagascar has decided on a moratorium on the sale 
of rosewood until 2015. 
4.65.  Although Madagascar's regulatory framework for forestry has not evolved since the 
first trade policy review in 2001
27, since September 2014 the Ministry responsible for forests has 
been drawing up a new forestry policy in partnership with the FAO, in accordance with the 
REDD process.28 Moreover, the Protected Areas System, introduced in 2003 for ecological reasons, 
has been expanded from 1.7 to 6 million hectares. The aim is to turn 17% of national territory into 
protected areas by including the marine area. 
4.66.  Commercial forestry policy is implemented by the MEEF's Directorate of Forest Resources 
Development, through forestry commissions on which are represented forestry operators and NGOs working to protect the environment. The main forestry authorization is an agreement on 
forest exploitation, which is accompanied by specifications and development, management and 
operating plans. The specifications define the general and specific technical clauses as well as each party's obligations. Operating permits are issued annually. 
                                               
25 FAO (2015). 
26 The Ministry has a website: http://www.eco logie.gov.mg . 
27 Law No. 97/017 of 8 August 1997 and Decree No. 98/781 of 16 September 1998 determining the 
general criteria for implementation of this Law. See also Decree No. 98/782 of 16 September 1998. 
28 United Nations Collaborative Initiative on Reducing Emissions from Deforestation and Forest 
Degradation (REDD) in developing countries, viewed at: http://www.un-redd.org . WT/TPR/S/318 • Madagascar 
 
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  4.67.  Signatories to such agreements undertake to pay timber royalties (Table 4.6). All the 
operators pay a levy on collection, defined at regional level, which varies from region to region. Exporters, including free-zone exporters, also pay an export levy. These levies are paid into the National Forestry Fund, whose aim is sustainable exploitation of this subsector. 
4.68.  Before they can leave the forest, any resources exploited must in principle bear the 
regulatory marks prescribed in the specifications. Export of unprocessed forestry products from natural forests has been prohibited since 2006, especially precious woods such as palisander, 
ebony and rosewood.
29 As a result of these bans, only pinewood (grown on plantations) may be 
exported, in semi-processed form. Since precious woods were included in Appendix II to the CITES, the system for their exploitation and mark eting has been subject to a quota fixed by the 
CITES. By March 2015, Madagascar had not been given any quota for precious woods. 
4.69.  The taxes imposed solely on exports are unlikely to encourage export or processing, even 
on a small scale. According to national observers,  exports of essential oils are highly taxed. 
Exporters of crocodile skins and byproducts are also taxed. Two % goes to the account of the 
CITES permanent secretariat in Madagascar for its operations.
30 
Table 4.6 Forestry taxes on exports, 2015 
Type of tax Products affected Amount 
Tax on entry to forest 
stations  Service (fee for visiting stations) Variable 
Tax on unlawful 
transactions  Confiscated forestry products (offence) Defined in tender 
Operating permit fee Wood forest ry products  Floor price per m3 calculated on 
the basis of the value of the saleable timber 
Collection tax Non-wood forestry produc ts (raffia, medicinal 
plants, etc.)  7% of the value determined on 
the basis of a floor price fixed 
by region  
  (% of the f.o.b. value) 
Export tax Processed wood, handicrafts  1.5 
Charcoal 1.5 
Essential oils derived from forestry products 2.0 
Semi-processed or rough wood  4.0 
Live natural fauna and flora products and 
products of their direct exploitation (for 
example, orchids, frogs, chameleons)  5.0 
Semi-processed natural products from breeding 
centres (crocodiles) 2.5 
Products from horticultura l centres and bred in 
captivity  2.0 
Source: Order No. 25 608/2014 of 8 August 2014 determining the forestry taxes for commercial hunting 
permits and authorizations to collect and expo rt fauna and flora prod ucts, as well as their 
exploitation, and samples for scientific purposes; Ordinance No. 60-128 of 3 October 1960 determining the procedure applicable to repression of offences agains t forestry legislation pertaining 
to hunting, fishing and nature protection. 
4.5  Energy and mining products 
4.70.  In late 2014, the Government was reforming the mining and energy sector, as well as the 
public authorities responsible for its regulation , on the basis of the new mining and petroleum 
policy published in August 2014. This policy refers  in particular to the need to redefine the 
respective roles of the mining regulation authorities. The Office of the President's Ministry 
responsible for petroleum resources (MPRP) defines hydrocarbons policy (upstream) and energy 
policy in general.31 Under its supervision, the National Mines and Strategic Industries Board (OMNIS) directs the national mining sector, including hydrocarbons, centralizes and sells 
geological information showing onshore and offshore mining potential.
32 The Malagasy Board 
                                               
29 Interministerial Order No. 16030/2006 of 14 September 2006 and Interministerial Order 
No. 10885/2007 of 3 May 2007. 
30 Viewed at: http://www.cites.org/sites/default/files/fra/com/sc/62/Inf/F62i-15.pdf . 
31 The Ministry has a website: http://www.mprs.gov.mg/?page_id=119 . 
32 Viewed at: http://www.omnis.mg/fr/accueil-fr . WT/TPR/S/318 • Madagascar 
 
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  (OMH) is in charge of hydrocarbons control, supervision and regulation.33 Approval of licences and 
other authorizations, especially authorizations to export mining products, is the responsibility of another Ministry, namely the Ministry responsible for energy, but it proved impossible to obtain 
more detailed information. Its main task appears to be to regulate the electricity subsector. The 
division of responsibilities between these two Ministries is unclear. 
4.71.  Since 1988, the World Bank has given Madagascar support to develop sustainable and 
transparent management of its mining sector. The legislative texts on mining are available on the 
MPRP website, except for the regulations on exporting, which need to be clarified. 
4.72.  The Malagasy Government became a candidate for the Extractive Industries Transparency 
Initiative (EITI) in 2008 and all its large mining companies have been listed since 2007. Madagascar was accepted as an EITI candidate country in February 2008, and then suspended in 
October 2011. The National Committee nonetheless continued to implement the EITI standard and 
benefited from supervisory missions from EITI's international secretariat. Madagascar's suspension was lifted on 6 June 2014. 
4.73.  In accordance with Madagascar's environmen tal policy (Section 3.3.1), all investments in 
prospecting and mining exploration are subject to  an environmental impact assessment under the 
responsibility of the Ministry in charge of the environment. It did not prove possible to find out 
whether the Government was considering setting up sovereign mining funds to manage this 
new-found mining wealth. 
4.5.1  Upstream petroleum activities 4.74.  In 2013, Madagascar started to extract crud e oil, after oil companies substantially increased 
their investment in prospection and exploitation of oil fields following the escalation in global oil 
prices from 2003 onwards. The first crude oil was produced in the west of the country, in Tsimiroro. The well has 1.7 billion barrels of heavy oil and could therefore, in the long term, be 
exploited commercially if prospects appear satisfactory, taking into account the volume of 
production, oil prices and the cost of production.
34 
4.75.  In August 2014, the Government announced a review of the legal framework, notably to 
adapt it to offshore activities. The regulatory framework for petroleum activities dates back to 
1996-1997 and essentially focuses on drilling the soil or subsoil.35 Three types of mining permit 
(exploration, exploitation and transport)36 govern prospecting, explor ation and exploitation of 
liquid or gaseous hydrocarbons, which are owned by th e State, as well as activities (and facilities) 
relating to the storage, transport and processing of hydrocarbons on national territory. In 2014, 
the model production-sharing contract was revised in order to allow the promotion of offshore blocs.
37 
4.76.  OMNIS may propose two types of operating contract to oil companies: association in a joint 
venture or production-sharing. In the former, the mining rights may be held by the associates while in a production-sharing contract they are he ld by OMNIS. By the end of 2014, 23 exploration 
mining rights had been granted. 
4.77.  Oil companies holding operating rights have to pay various taxes negotiated for each of the 
production agreements: a fixed levy
38, a 20% direct tax on hydrocarbons (IDH), based on the net 
profits earned by the companies from all their exploration and operational activities, as well as 
from transport of their products within Madagascar (the IDH gives exemption from income tax and 
the tax on investment income); in addition, payments have to be made for the surface lease. The State may also earn income from its participation in joint ventures. 
                                               
33 Viewed at: http://www.omnis.mg/fr . 
34 Viewed at: http://www.mprs.gov.mg/?p=155 . 
35 Law No. 96-18 of 4 September 1996. 
36 Decree No. 97-740 of 23 June 1997. 
37 This new model contract can be  viewed on the OMNIS website: http://www.omnis. mg/fr/download-
contracts-models-fr . 
38 These levies are determined in the Finance Law: for crude oil they are 8% to 20% depending on the 
volume of production; for natural gas they are 5 to 10% depending on the volume of production 
(CGI, Articles 01.01.26 et seq .). WT/TPR/S/318 • Madagascar 
 
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  4.5.2  Downstream petroleum activities 
4.78.  The downstream petroleum subsector makes a sizeable contribution to the economy. In 
2013, with a volume of 817,000 m3 and at a cost of US$670 million, petroleum products accounted 
for 20% of Madagascar's total imports. Petroleum earnings have represented one third of national 
customs revenue.39 The State has intervened in many area s such as fixing prices, suspending 
duties and taxes payable, or giving a favourable exchange rate for imports of petroleum products. In addition, according to the report of the Dire ctorate-General of Hydrocarbons for 2013, lack of 
competition in importing petroleum products is a major problem, especially because of the large 
margins on their transport and distribution (Chart 4.6). 
Chart 4.6 Structure of diesel fuel prices, 2008-2014 
(MGA/L) 
 0 5001 0001 5002 0002 5003 0003 5004 000
2008 2009 2010 2011 2012 2013 2014Taxes and levies
Distribution  margin
Transport  and storage costs
Border reference  price
Actual price at the pump
 
Source: WTO Secretariat estimates based on data from the OMH. 
4.79.  Madagascar's only refinery, at Toamasin a, has ceased operating and only its storage 
capacity is utilized. The terminal at Toamasina is the entry point for imported refined products. 
Petroleum products are carried by boat to the ot her ports solely by one enterprise, the Malagasy 
company Logistique Pétrolière (LPSA, see Table 4.7) under an agreement with the Ministry responsible for energy. It alone has access to the infrastructure for receiving petroleum products, 
which are then distributed by lorry or tank car. 
Table 4.7 Terms for granting various petroleum licences 
Types of licence Fee (US$)  Validity years)  Licences in force 
Import of hydrocarbons 80,000  7 Galana, Jovenna, Mocoh Gas, Shell, Total  
Import of gas 80,000  7 Galana, Total, Vitogaz  
Import of lubricants 50,000  5 >15 
Import of base oil and inputs 80,000  7 Mocoh Gas  
Refining or other processing  600,000  20 GRT 
Road transport  80,000  5 Total, Jovenna, Galana, Shell, LPSA 
Gas transport  140,000  15 Galana, LPSA, Mocoh Gas, Total, Vitogaz  
Maritime transport of hydrocarbons 180,000  15 LPSA 
Rail transport of hydrocarbons  180,000  15 LPSA 
Pipeline transport of hydrocarbons 180,000  15 7 units  
Storage of hydrocarbons 240,000  10 GRT, LPSA, Mocoh Gas 
Offshore storage of hydrocarbons 240,000  10 GRT 
Storage of gas 100,000  10 LPSA, Total, Vitogaz 
Distribution of fuels 360,000  7 Total, Jovenna, Galana, Shell 
Distribution of products for aviation 240,0000  7 Total, Jovenna  
Distribution of gas 100,000  7 Galana, Mocoh Gas, Shell, Total, Vitogaz  
Export of hydrocarbons 80,000  7 Galana, Jovenna, Shell, Total, Vitogaz  
Blending 100,000  10 Mocoh Gas  
Export of base oil, its inputs and lubricants 80,000  7 Mocoh Gas  
Note: The licence, renewal and transfer fee are expresse d in United States dollars and paid in the ariary 
equivalent. 
                                               
39 Viewed at: http://www.mprs.gov.mg/wp-content/uploads/2014/10/Politique-Nationale-
Mini%C3%A8re-et-P%C3%A9troli%C3%A8re.pdf . WT/TPR/S/318 • Madagascar 
 
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  4.80.  The legislation currently in force, available on the OMH website, dates back to 1999 and was 
amended in 2004, 2009 and 2012.40 The OMH grants import licences to eligible operators which so 
request (Table 4.7). Any person wishing to enga ge in distribution must undertake to build a 
network with at least one point of sale to the public in each of the districts identified by the OMH 
for a period of four years and must constantly have available sufficient quantities of each of the 
products marketed in each of the districts identified by the OMH. It is the OMH's role to verify that the products imported or marketed and the petroleum facilities comply with the standards in force 
and to monitor supplies of fuel throughout Madagascar. 
4.81.  Control of prices at the pump began in 2008 and signalled the end of the policy set out in 
the Competition Law (Section 3.3.3). The price of products and the margins have since been determined by a committee composed of representatives of the Ministry responsible for trade, the 
Ministry of Finance, the OMH, and holders of import licences. The prices are subject to an 
equalization scheme throughout the country, which applies to any person holding an import or distribution licence.
41 A new price adjustment mechanism was introduced in January 2013 and 
comprises a new table of rates which serves as a reference for determining the price of gasoline, 
diesel fuel and kerosene; this table is updated monthly by the OMH. The Hydrocarbons Fund was established to finance the price disparities. 
4.82.  Prices do not vary between one distribution  company and another and thus there is no price 
competition among service stations. In October 2014, the price at the pump was MGA 3,640 (approximately US$1.5) for premium gasoline and MG A 2,940 (US$1.2) for diesel fuel. It is also 
the responsibility of the OMH to monitor prices and margins so as to exert pressure on the 
subsector's operators if margins are excessive, although it has few coercive means at its disposal 
in the event of abuse. 
4.83.  According to the statistics available, the price at the pump for diesel fuel has risen slightly 
since 2009 (see Chart 4.6), but has still not reached international levels including tax. In this 
connection, the drop in global prices in 2014 arrived fortuitously to help the Government to arrive at the "true price level". 
4.84.  The tax on petroleum products (TPP) is imposed on imports of petroleum products instead 
of customs duty. The tax is high on certain products, but the Government may suspend it temporarily in order to offset the high cost of the products. Payment of the 40% petroleum tax has 
therefore been deferred since 2011 as a guarantee on the part of the State for payment of the 
State subsidies given to distributors of petroleum products on the one hand and payment of 
JIRAMA's debts (Section 4.5.3) owed to distribu tors on the other. This reportedly represents 
considerable amounts foregone in terms of tax revenue. According to the Customs, in 2015 the 
TPP is to be reinstated on imports of petroleum products. 
4.85.  There are also a number of special levies on fuel imports in order to finance, inter alia, the 
upkeep of roads (Section 4.7.2), but they have not been used for this purpose in recent years, the 
result being deterioration of the infrastructure. Until September 2013, the Central Bank granted a 
preferential exchange rate for imports of petroleum products in order to lower the price to the consumer (Section 1.2). This subsidy was squeezing Madagascar's foreign exchange reserves and has been abolished. 
4.86.  The Government has identified four priorities for its new mining and petroleum policy: 
 To standardize specifications for petroleum products in each category (diesel fuel, 
gasoline, lubricants, fuel oil); to propose new standards for less polluting fuels that are 
less hazardous to health; and to promote biofuels such as ethanol and biodiesel. 
 To establish a mechanism to follow up global fuel prices in order to guard against price 
hikes and abusive distribution margins. 
                                               
40 Decree No. 2004-669 implementing Law No. 99-010 of 17 April 1999 governing downstream 
petroleum activities, amended and supplemented by Law No. 2004-003 on liberalization of the downstream petroleum subsector, as amended and supplement ed by Decrees No. 2009-1104 of 19 August 2009 and 
No. 2012-755 of 7 August 2012, viewed at: http://www.omh.mg/codes/textes reglementaires.php . 
41 Decree No. 2013-882 of 23 December 2013 renewed the control of prices at the pump from 1 January 
to 30 June 2014, citing the Competition Law. WT/TPR/S/318 • Madagascar 
 
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   To allow direct import of petroleum products by the State in parallel with private firms. 
The Government is considering buying a tanker to transport these products and introducing a public guarantee fund to finance such imports. 
 To lower costs by upgrading transport infrastructure. Bridges are sometimes so 
dilapidated that it is dangerous for lorries delivering gas or other petroleum products to 
use them. This problem led to shortages of gas bottles in service stations in April-May 2014.
42 
4.5.3  Electricity 
4.87.  One of the priorities already identified in Madagascar's previous review in 2008 was to 
restructure the historical operator JIRAMA an d upgrade the country's electricity supply. The 
situation has not improved since then. Madagascar's per capita electricity consumption is less than 
one-tenth of average African consumption (Table 4.8). 
Table 4.8 Electricity produc tion, trade and consumption 
 (kWh million and kWh/per capita) 
Country Year Production Imports Exports Consumption 
Total Per capita 
South Africa 2008 258,291 10,572 14,168 254,695 5,067 
 2009 249,557 12,295 14,052 247,800 4,869 
 2010 259,601 12,193 14,668 257,126 4,997 
 2011 262.538 11,890 14,964 259,464 4,995 
Mozambique 2008 15,127 8,207 11,212 12,122 533 
 2009 16,963 8,340 12,700 12,603 539 
 2010 16,666 8,533 12,075 13,124 548 
 2011 16,830 8,570 11,954 13,446 547 
Mauritius 2008 2,557 n.a. n.a. 2,557 2,091 
 2009 2,577  n.a. n.a. 2,577  2,100  
 2010 2,690  n.a. n.a. 2,690  2,185  
 2011 2,731    2,731  2,211  
Sri Lanka 2008 10,003  n.a. n.a. 10,003  489  
 2009 9,987  n.a. n.a. 9,987  485  
 2010 10,801  n.a. n.a. 10,801  520  
 2011 11,600  n.a. n.a. 11,600  554  
Africa 2008 631,142  34,740  29,951  635,931  649  
 2009 633,466  37,763  32,740  638,488  635  
 2010 677,459  38,621  34,113  681,967  662  
 2011 700,157 38,850 33,462 705,546 668 
Madagascar 2008 1,104 n.a. n.a. 852 44 
 2009 1,103 n.a. n.a. 791 40 
 2010 1,190 n.a. n.a. 850 41 
 2011 1,268 n.a. n.a. 883 42 
 2012 1,350 n.a. n.a. 930 43 
 2013 1,423 n.a. n.a. 955 43 
n.a. Not available. 
Source: United Nations, Department of Economic and Social Affairs, Energy Statistics Yearbook, 2010 and 
2011; and information provided by the authorities. 
4.88.  According to the authorities, around 15% of  the population has access to electricity, 54% in 
urban areas and 4% in rural areas. This proportion has decreased since 2008 as a result of 
population growth. Increasing the generation of electricity remains an essential criterion for the country's industrial development. Several economic operators would be interested in entering the 
energy sector because demand is far from being satisfied and Madagascar has vast renewable 
energy potential, provided that a clear an d transparent commercial policy is adopted. 
4.89.  The electric power available in Madagascar (around 357 MW) is also well below installed 
capacity (545 MW), mostly because of the shortc omings of the thermal power stations belonging 
to JIRAMA, which is under the authority of the Ministry of Energy and is still awaiting 
                                               
42 L'Express de Madagascar, viewed at: http://www.lexpressmada.com/blog/actualites/economie/ 
penurie-de-gaz-dans-les-stations-9732 . WT/TPR/S/318 • Madagascar 
 
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  reorganization. In addition to its inefficient management43, and even though JIRAMA pays 
international market prices for fuel (gasoil and fuel oil), in other words more than the (subsidized) price at the pump, its rates are capped and do not allow it to cover costs (Table 4.9), while it would appear that many users do not pay for their electricity. 
Table 4.9 Trend in electricity prices, 2008-2015 
  October  2008  May 2009 Since July  2012  
Long usage Flat rate (MGA/kWh) 32,750  30,520 34,488  
 Energy (MGA/kWh) 144 140 158a 
 Standing charge (MGA/month)  132,800  125,000 141,250  
Short usage Flat rate (MGA/kWh) 32,750  30,520 34,488  
 Energy (MGA/kWh) 196  190 215  
 Standing charge (MGA/month)  132,800  125,000 141,250  
a Around US$0.5/kWh. 
Source: JIRAMA, Tariff zone 1, me dium voltage, industrial use. 
4.90.  State subsidies to JIRAMA, which it needs in order to lease generators, pay for its fuel and 
buy electricity from private producers, amounted to MGA 161 billion (US$73.2 million) in 2013, or 
some 0.7% of Madagascar's annual GDP, and were higher in 2014. 
4.91.  This situation has led to massive use of diesel-powered stations in order to meet growing 
demand. Furthermore, the investment needed has e ssentially been provided by the private sector 
in the form of leasing of generators, which is far from being the most cost-effective solution for the 
subsector. 
4.5.3.1  Production 
4.92.  Chart 4.7 gives a breakdown of production of  various types of energy  and of producers. It 
shows that, despite liberalization of production in 1998, these activities have attracted few private investors. 
Chart 4.7 Structure of electricity production, 2013 
(GWh (% of total)) 
 
727
(51.0%)   82 (5.8%)   
366 
(25.7%)   
249 (17.5%)   Hydro (809 GWh)
Thermal (614 GWh)
Private
Production:  1,423 GWh JIRAMA
JIRAMAPrivate
 
Source: Information provided by the authorities. 
4.93.  The Government views the exploitation of renewable energy as an important way of 
developing the energy sector. According to estima tes, Madagascar has 7 gigawatts of hydropower 
potential, of which only 3 to 5% are being used. The 2013 Finance Law declared that tax 
exemption for alternative and renewable energy infrastructure would continue. 
                                               
43 In 2014, JIRAMA was the subject of a Detailed Note by the World Bank. See World Bank (2014). WT/TPR/S/318 • Madagascar 
 
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  4.5.3.2  Transport, distribution and charging 
4.94.  After the reform of the electricity subsecto r in 1998, production, transport and distribution 
were partly liberalized.44 They can be supplied by any Malagasy or foreign natural or legal person 
under private or public law. An extension of the concession contract between the State and 
JIRAMA was, however, concluded without specifying any expiry date. JIRAMA's network has been 
severely damaged and has sustained huge losses.  In addition to JIRAMA, there are around 
40 producers of electricity for own consumption, plus some 20 private producers that may only sell 
to JIRAMA but at freely negotiated prices, which has entailed huge losses for JIRAMA. The selling 
price to individuals (households, companies, etc.) is determined by the Electricity Regulation Board (ORE). The latest price list dates back to July 2012. 
4.95.  Where it is present, JIRAMA is also the on ly distribution company. In rural areas, which lie 
outside JIRAMA's perimeter, producers may sell directly to consumers at prices fixed by the ORE, 
which differ from one operator to another. Larg e-scale development of hydroelectric generation 
would imply reforming the tariff policy and effect ively opening up the distribution network to 
competition, as well as establishing mechanisms th at afford greater security for private investors. 
4.96.  According to the authorities, the energy po licy being drafted will define the mechanisms to 
provide security for foreign investment. The Government's current projects focus mainly on 
renewable energy and rural electrification. A national electricity plan is being drawn up, whose 
objectives are to increase the level of access to electricity for Madagascar's population, guarantee electricity supplies and gradually lower the cost of electricity. 
4.5.4  Water 
4.97.  A decade ago, the Government, with the support of external partners, decided to open up 
the water subsector to private enterprises which could work alongside JIRAMA. The National Water and Sanitation Authority (ANDEA) was set up and the regulatory texts for implementing the Water 
Code were adopted in 2003, but the regulatory bo dy has still not been established. JIRAMA still 
holds a ten-year concession for producing, transporting and distributing water. In 2013, 46% of the population had access to drinking water in the zones supplied by JIRAMA. JIRAMA's total 
production amounted to 108 million m
3 in 2013, less than in 2006, of which 60% was being 
supplied to residents of Antananarivo and 40% to the six other large cities in the country. JIRAMA determines the price of water. Outside JIRA MA's perimeter, water supplies are managed 
collectively. 
4.5.5  Other mining activities 
4.98.  Non-petroleum mining attracts the most FDI and has done so since Madagascar's first 
review in 2001. More than 35 extractive industries  are operating in the country and are involved in 
either prospecting or production.
45 Of the latter, the two major mining projects – QIT Madagascar 
Minerals (QMM) and Ambatovy – have completed their installation. With these two projects, earnings from mining exports have increased sixfold since 2007 (Chart 4.8) and are now the 
island's main export earners. 
                                               
44 Law No. 98-032 of 20 January 1999 and its Implementing Decree No. 2001-173 of 28 February 2001. 
45 EITI (2013). WT/TPR/S/318 • Madagascar 
 
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  Chart 4.8 Exports of principal minerals, 2007-2013 
(US$ million) 
0100200300400500600700
2007 2008 2009 2010 2011 2012 2013Nickel not alloyed (HS 750210)
Petroleum oils and oils obtained from bituminous minerals, other than crude (HS 2710)
Titanium ores and concentrates (HS 261400)
Cobalt mattes and other intermediate products of cobalt metallurgy (HS 8105)
Niobium, tantalum, vanadium or zirconium ores and concentrates (HS 2615)
Chromium ores and concentrates (HS 2610)
Other
 
Note: The principal products have been identified by value according to 2013 data. Exports of aviation 
fuel/diesel fuel (HS 2710) are sales of (imported) fuel to foreign airlines/cruise ships. 
Source: WTO Secretariat calculations, based on data from the UNSD Comtrade database. 
4.99.  Mining of nickel and cobalt at the Ambato vy mine represents the most substantial FDI ever 
made in Madagascar, and one of the largest in Africa. The authorities are anticipating refined 
nickel becoming the leading export, amounting to  over US$800 million per year for 60,000 tonnes 
of nickel that is 99.8% pure, equivalent to 3% of  global production. Reserves are estimated to be 
125 million tonnes, to be mined over 29 years. The ore is sent by pipeline to the refinery in 
Toamasina. In addition, 5,600 tonnes of pure  cobalt could be mined annually. Ammonium 
sulphate, a fertilizer by-product, could be commercialized. Ambatovy is the result of a partnership among four foreign private firms.
46 
4.100.  QMM is 80% owned by Rio Tinto and 20% by the Malagasy State; it is developing an 
operation to extract heavy mineral sands near Fort Dauphin in the south-east of Madagascar.47 
The main operational activities are the extraction of sand from a depth of 20 metres; mechanical 
separation of heavy minerals from the sand, whic h must be returned to the mine for subsequent 
rehabilitation; the separation of ilmenite and zircon from the other heavy metals using magnetic 
and electrostatic processes; and the export of ilmenite and zircon. 
4.101.  Madagascar also produces high-grade (48 to 49%) chromite in two mines operated 
exclusively by the state-owned company Kraomita Malagasy (KRAOMA), which also has the 
monopoly on marketing Madagascar's chrome. As such, it should in principle be notified to the WTO Working Party on State-Trading Enterprises. In 2013, KRAOMA exported 47,200 tonnes of chrome concentrate and 38,222 tonnes of bedrock chrome, much less than the 116,290 
mentioned in 2006, because the mines were be coming exhausted. Several foreign private 
companies produce graphite. Exports go mostly to Germany and the United States and reportedly amounted to 5,000 tonnes in 2013. 
4.102.  The 2005 Mining Code
48 governs prospecting, exploration, exploitation, ownership, 
possession, transport, processing and marketing of mi neral substances found in the soil or subsoil, 
with the exception of hydrocarbons, which are the subject of separate regu latory frameworks (see 
Section 4.5.2 above). The Code, which is being revised in 2015, specifies that these substances 
are owned by the State. Prospecting may be freely undertaken within Madagascar, except in protected zones, zones temporarily classified as reserved areas, and areas covered by mining permits or by an exclusive area reservation authorization (AERP). 
                                               
46 Viewed at: http://www.ambatovy.com/docs/?lang=fr&p=110#sthash.DBk8BL8y.dpuf . 
47 Viewed at: http://www.riotintomadagasca r.com/english/aboutQMM.asp . 
48 Law No. 99-022 of 19 August 1999 and its Implementing Decree No. 2000-170 of 15 March 2000, 
viewed on the Droit-Afrique website: http://www.droit-afriqu e.com/images/textes/Madagascar/Madagascar 
 - Code minier Decret.pdf . WT/TPR/S/318 • Madagascar 
 
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  4.103.  An AERP is valid for three months and is not renewable; it gives the exclusive right to 
prospect and then, where applicable, to apply for a mining permit with a view to exploration and/or exploitation in the area concerned. There ar e three types of mining permit: an R permit (for 
prospecting and exploration), valid for five years and renewable twice for three years; an E permit 
(for exploitation or production), valid for 40 years and renewable for several further 20-year 
periods (and which is subject to environmental impact requirements (Section 3.3.1.6)); and a 
PRE permit, exclusively for small-scale operators for prospecting, exploration and exploitation, 
valid for eight years, renewable for one or more four-year periods (see next Section). 
4.104.  Royalties are payable on  the selling pric e of the products extracted and these are in 
principle intended for local development; the earnin gs from the 2% mining royalty (1% in the case 
of the Ambatovy mine) are in principle divided between the autonomous provinces, the regions, 
the communes (70% overall) and the Central Government (30%).
49 This allocation rule is not 
currently being applied because of difficulties in tracking the product through the stages from extraction to processing and then sale, especially when extraction takes place on several sites, and 
all the revenue goes into the State's general budget. This leads to a considerable gap between the 
expectations of the population and what they actually receive. 
4.105.  Furthermore, a special Law on Large-Scale Mining Investment (LGIM) was adopted in 2001 
precisely to encourage such investment.
50 The eligibility threshold is MGA 50 billion (around 
US$20 million). This special regime gives the right to a series of fiscal and customs incentives for the duration of the original mining permit, for example the company and its subcontractors pay a 
reduced rate of income tax of 10% if the company exports all its production, and the right to 
import the materials and equipment covered by the investment project without paying VAT. 
Investors may also freely convert into foreign cu rrency and transfer the sums needed for their 
current operations and, subject to authorization, transfer capital. According to the Customs, the 
exemptions from duty and taxes granted to mining companies account for the largest amount of 
customs revenue foregone. These companies may import all the goods and equipment needed for their investment free of all customs duties and in ternal taxes, including the materials, equipment 
and tools to be used for the project. This can result in abuse. 
4.5.6  Precious stones and metals 4.106.  Madagascar also produces and exports gold and precious, semi-precious and ornamental 
stones. Production is almost entirely on a small scale and virtually all is exported in the rough 
state, particularly to the United Arab Emirates. Informal networks dominate the subsector, making 
it difficult to evaluate its contribution to the economy.
51 It would appear that even those holding 
permits almost never reveal the true results of their activities. As indicated in a recent World Bank 
study, the informal nature of the activity and smuggling remain major challenges.52 According to 
trading partners which import (in fact, the United Arab Emirates), exports of gold from Madagascar exceed US$200 million (Chart 4.9), which is a substantial loss of revenue in terms of fiscal 
earnings for the State. 
                                               
49 Law No. 2005-021 of 27 July 2005. 
50 Law No. 2001-031 of 8 October 2002 establishing a special regime for large-scale investment in 
Madagascar's mining sector (LGIM), as amended by Law No. 2005-022 of 17 October 2005, viewed at: 
http://eiti-madagascar.org/loi-sur-les-grands-investissements-miniers-lgim-2005 . 
51 Ministry responsible for mining and petroleum (2015). 
52 World Bank (2014), pp. 149-150. WT/TPR/S/318 • Madagascar 
 
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  Chart 4.9 Gold exports, 2005-2011 
(US$ million) 
050100150200250
2005 2006 2007 2008 2009 2010 2011"Mirror" statistics (based on data from 
Madagascar's partners)
Data declared by Madagascar
 
Note: Gold under SITC (Rev.3) Code 971. 
Source: WTO Secretariat calculations, based on data from the UNSD Comtrade database. 
4.107.  In 2014, it was therefore decided to reorganize the gold subsector (upstream to 
downstream), including a legal and organizational framework to provide greater certainty for 
investment, the objective being to achieve indust rial-grade production and develop small-scale 
production.53 The current regulations on gold panning in the Mining Code and in a Decree from 
1995 determining the gold regime could be greatly simplified.54 The same is true of the trade in 
precious stones and metals. 
4.108.  Firstly, the export of gold was regularly banned, as in June 2012, the aim being 
(unsuccessfully) to ensure that the raw material was available to jewellers. Then export was 
occasionally authorized again by means of an order, creating a climate of uncertainty in the subsector. At the end of 2014, exports were pr ohibited, which gives great encouragement to 
smuggling. 
4.109.  Secondly, the levies imposed by administrative authorities are high, which is a disincentive 
to using legal channels. The Gold Agency, a state-owned company created by the 1995 texts and under the supervision of the Ministry responsible fo r mining, had still not been set up by the end of 
the first quarter of 2015. The Agency was supposed to be in charge of registering persons wishing 
to obtain a gold collector's card, for which they  have to pay a large sum (over US$100). According 
to the law, gold offices should be the only bodi es authorized to export gold, but in 2015 there did 
not appear to be many such establishments. 
4.110.  A levy and mining drawback (2% in all) appl y to exports of gold and other precious stones, 
which is yet another disincentive to using the formal export networks. An additional 0.2% of the export value is also levied, with a minimum of MGA 100,000 (around US$33), not forgetting the 
"GasyNet" charge of 0.5% (Section 3.2.2.4). 
4.111.  For all precious metals and precious and fine stones, an export authorization has to be 
sought from the Central Directorate of the Mini ng Administration, through the one-stop window 
(for mining). In addition, transporting these products within Madagascar requires a permit, which 
has to be attached to the customs export declaration. These documents represent a cost in time and money and could usefully be streamlined. 
                                               
53 Mining policy, viewed at: http://www.mprs.gov.mg/wp-content/uploads/2014/10/Politique-Nationale-
Mini%C3%A8re-et-P%C3%A9troli%C3%A8re.pdf . 
54 Decree No. 95-325 of 3 May 1995 determining the gold regime, viewed at: http://jwf-legal2. 
fr.gd/D-e2-crets-388.htm . WT/TPR/S/318 • Madagascar 
 
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  4.6  Manufacturing 
4.112.  Madagascar's manufacturing sector has the advantage of exceptional raw materials 
provided by its flora, fauna, water and socio-cultural heritage, which are unique in the world. This is why the country's main industry, i.e. agro-ind ustry, manufactures not only basic foods but also 
high-quality products eagerly sought after as ex ports, for example, vanillin, honey, foie gras, 
cocoa paste and guano. Madagascar has managed to  develop major manufacturing activities in 
processing fruit, vegetables and, above all, fisheries products, and to gain access to the European 
Union market, where some Malagasy companies are authorized to market their products. 
Considering the overall economic situation, however, the authorities were of the view that the informal sector accounted for close to 90% of value added in 2015. 
4.113.  Madagascar also has a vertically integrated textiles subsector, encompassing 
cotton-growing, including organic cotton, cotton weaving, and making up clothing for export. 
Woodworking and marquetry are also of outstanding quality, which partly explains the major share 
of handicrafts in national value added, with a sizeable export trade. Among the most sought after 
products on export markets are stones, sculpture, furniture and marquetry articles, essential tree 
oils, crocodile skins, leather articles, household textiles, upholstery and basketry. 
4.114.  Madagascar's exports of handicrafts amounted to close to US$16 million in 2013, according 
to the Malagasy National Handicrafts Centre (CENAM). Some 10% of the labour force works in the 
handicrafts subsector, which is thus an important source of earnings. Only 15% of the two million Malagasy artisans, however, are listed by the Directorate-General of Handicrafts as professionals who export their products. The reason for this could be, inter alia, the taxes on exports of 
handicrafts. Handicrafts are estimated to contribute between 8.5% and 12% of GDP. 
4.115.  At US$665 million in 2014, Madagascar's total exports of manufactures were around half 
those in 2008. This poor performance partly re flects the end of the preferences granted to 
Malagasy companies making textile articles under the AGOA, following the suspension of 
Madagascar's Constitution in 2009 (Section 2.1). Many companies in the secondary sector have shut down. 
4.6.1  Overview of trade policy 
4.116.  In 2014, the prime objective of the Mini stry responsible for industry was to increase 
domestic supplies of agro-industrial products, particularly by developing local raw materials, in order to increase food security and provide the po pulation with jobs. For this review, the Ministry 
drew up a list of the sectors in which Malagasy industry has a competitive advantage and to which 
the authorities hope to attract FDI; first of all, agro-industry, including fertilizers; textiles and clothing, and leather; essential oils; and electronics assembly and renewable energy production 
(Section 4.5.3). 
4.117.  The Industrial Policy Letter, publishe d in 2008 as an outcome of the cooperation 
programme with the United Nations Industrial Development Organization (UNIDO), already 
focused on the systemic problems hampering industrial performance, which are exogenous 
(Table 4.10) and delay and raise the cost of manufacturing processes. 
4.118.  Partly to mitigate some of these problems, Madagascar has maintained and gradually 
developed the benefits given to companies operating under the Free Zones and Enterprises (ZEF) 
regime (Section 2.3.2). Despite the dualism that this regime entails between companies producing 
for the domestic market and those having acquired ZEF status, the latter consider the granting of the relevant benefits to be a prerequisite for investing in Madagascar. The Government's current 
emphasis on increasing domestic supplies, however, provides the opportunity to envisage 
extending the ZEF benefits to the rest of the domestic economy. WT/TPR/S/318 • Madagascar 
 
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  Table 4.10 Obstacles to the perfor mance of industrial enterprises 
Problems most often 
cited (section of the 
report) Effects Measure identified 
Section 2   
Political conflicts, 
constitutional crises Loss of support from external partners 
(for example, AGOA) Ensure constitutional stability  
Lack of governance Corruption, abuse of the le gal system Institutionalize whistle blowers, 
strengthen the courts 
Excessive, complicated and 
less than transparent 
taxation Large informal sector, tax loopholes, 
tax fraud Reform of taxation and tax inspectors  
Section 3   
Lack of competition Excessive prices, restrictive practices 
(petroleum products, 
telecommunications, beverages, 
building materials)  Promote competition, combat abuses 
effectively 
Failure to respect quality 
standards Poor product development  Ad opt international standards, 
accreditation, certification 
Section 4   
Expensive and unreliable energy  High costs, insufficient production  Regulatory reform to encourage 
investment in energy  
Inadequate transport 
services High costs, delays, products lost or 
damaged Investment in tran sport infrastructure 
(roads, bridges, oil pipelines)  
High cost and lack of 
access to credit Investment financing inaccessible to 
SMEs Promote the granting of loans for local 
investment by SMEs  
Source: WTO Secretariat. 
4.119.  MFN customs duties on imported manufactu res remain high and have not fallen since the 
previous review (Chart 4.10). This does not incite  companies to be competitive. For example, in 
biscuit production, which depends on imports for 98% of the value of production, customs duties 
and taxes are higher on the inputs than on the finished product. Consequently, the price of 
finished products is 20% higher than import ed products, especially from COMESA countries. 
Chart 4.10 Customs duties by manufacturing industry, 2008 and 2015 
 (%) 
0.02.04.06.08.010.012.014.016.018.0
Food products, 
beverages and 
tobacco
Textiles and 
clothing
Wood and 
articles of 
wood
Paper and paper 
products; printing 
and publishing
Chemicals
Non-metallic 
mineral products
Basic metal 
industries
Metal products, 
machinery and 
equipment
Other 
manufacturing 
industriesAverage rate 
applied in the 
manufacturing 
industry2008
2015
 
Note: The product groups are defined in the two-digit ISIC. 
Source: WTO Secretariat calculations, based on data provided by the authorities. WT/TPR/S/318 • Madagascar 
 
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  4.6.2  Specific industries 
4.6.2.1  Sugar industry 4.120.  Up until 2009, sugar under tariff heading 1701 originating in Madagascar benefited from 
guaranteed access to the European Union market free of community customs duty
55, for a fixed 
quota of 10,760 tonnes a year at a guaranteed co mmunity price above the global price, pursuant 
to Protocol 3 on sugar (Cotonou Agreement).56 Since 1 October 2009, restrictions on the volumes 
exported have been lifted for ACP countries that have signed EPAs with the European Union, 
including Madagascar. The guaranteed access vo lumes have also been abolished and customs 
duties still do not apply irrespective of the volume exported by Madagascar.57 
4.121.  In order to confront increased competition, from 2006 onwards Madagascar adopted a 
national strategy to adapt the sugar subsector, wi th assistance from the European Union, in order 
to revive industrial production of sugar and ensu re the country's self-sufficiency by 2014, while at 
the same time developing its export markets.58 In 2008, the Malagasy Sugar Cane Centre (CMCS) 
was created to promote the sugar cane agro-industry. Some of the measures taken to boost the 
subsector include rehabilitation of hydro-agricultural infrastructure, supplying planters with inputs 
and conducting studies on the subsector. 
4.122.  Sugar production has responded well to these efforts (Table 4.11) and exports even more 
so.59 In 2013, sugar exports amounted to almost US$30 million (83% going to the EU), more than 
four times higher than the US$7 million in 2007. There was also a large volume of imports (worth almost US$67 million in 2013), mostly from Thailand and Brazil. The authorities have also indicated that customs controls revealed that large imports of rice (at zero duty) were in fact 
sugar. 
Table 4.11 Production, import an d export of sugar, 2009-2013 
(tonnes) 
Activity 2009/2010  2010/2011  2011/2012  2012/2013 2013/2014  
Production 54,005  70,878  69,447  75,848 98,004  
Import 127,270  91,857  107,628  103,492 111,502  
Quantity available 181,275  162,735  177,075  179,340 209,506  
Domestic consumption 154,518  133,335  155,831  139,340 143,115  
Export 26,756  29,400  21,244  40,000 66,391  
Source: CMCS. 
4.123.  Recovery in this subsector is also largel y attributable to the private management of three 
of Madagascar's industrial sugar refineries by  the Chinese company COMPLAINT. The other two 
sugar refineries (Brickaville, 15,000 tonnes, and Nosy Be, 16,000 tonnes) await buyers. 
4.124.  Since 2008, the regulations on the sugar trade have continued to be modified: 
 T h e  " s u g a r  l e v y "  p a i d  t o  t h e  C M C S  f o r  i t s  o p e r a t i o n s  r o s e  f r o m  M G A  6  t o  1 0 / k g .  I t  
applies to all sugar sold in Madagascar and since September 2014 has applied to both domestically produced and imported sugar at the same rate. 
 Customs duty decreased, from 20% in 2009 to 5% over the period 2010-2014, then 
rose to 10% in 2015. Sugar is not covered by the liberalization commitments made by Madagascar under the EPA and the SADC. 
 The minimum value for imports was abolished in March 2015 (Section 3.1.2). 
                                               
55 This MFN duty is €34/100 kg for raw cane sugar for refining and €42/kg for refined sugar. 
56 WTO document WT/TPR/S/177/Rev.1 of 15 May 2007. 
57 The EPA nevertheless provides for sa feguard mechanisms (Section 2.2.3). 
58 Viewed at: http://www.agriculture.gov.mg/communication/wp-
content/uploads/sites/2/2014/06/STRATEGIE_-SUCRE.pdf . 
59 See in particular Mesures d'accompagnement du protocole su cre en faveur des paysans producteurs 
de canne à sucre de Madagascar – Allocation 2012, viewed at: 
http://ec.europa.eu/europeaid/documents/aap/2012/af_aap_2012_sugar_mdg.pdf . WT/TPR/S/318 • Madagascar 
 
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   A ban on exports was introduced in 2011, then lifted in 2012 when domestic supply 
problems were deemed to have been resolved. 
4.125.  Madagascar also benefits from a zero-duty tariff quota of 7,258 tonnes of brown sugar 
annually for the United States, but it is underutilized. 
4.6.2.2  Textiles and clothing 
4.126.  Madagascar has the assets to cover all stages of the textiles and clothing production chain, 
from growing natural fibres to manufacturing finished garments. It could cease limiting itself to 
making up clothing provided that the cotton subsector is satisfactorily integrated in the textiles 
and clothing industry. Currently, foreign companies produce a large share of Madagascar's cotton lint and have become some of the principal buyers of seed cotton grown on the island (Section 4.1.2.4). Imported cotton thread and fabric are subject to the maximum tariff protection 
of 20%, which makes them more expensive and hinders the subsector's integration in the 
economy (Sections 2.3.2 and 3.2.4). 
4.127.  The clothing industry grew strongly in the 2000s, mainly making clothing of HS headings 
6110, 6214 and 6203 using imported textiles (Cha rt 4.11), which is then exported to the 
United States under the AGOA tariff preferen ces. These are conditional upon respect for 
constitutional rights in beneficiary countries and the Malagasy industry was badly hit by their 
suspension in 2009. Madagascar has once again been benefiting from AGOA preferences since 
October 2014, including the special AGOA provision on incorporating fabrics from third countries ("third fabric provision"). 
Chart 4.11 Trade in textiles and clothing, 1995-2013 
(US$ million) 
 0 100 200 300 400 500 600 700 800 9001 000
1995
199619971998199920002001
2002
20032004200520062007200820092010201120122013Exports
Imports
 
Note: Textiles and clothing according to the WTO definition. 
Source: WTO Secretariat calculations, based on data from the UNSD Comtrade database. 
4.128.  The clothing industry should also benefi t from implementation of the IEPA with the EU 
(Section 2.2.3), which involves streamlined rules of origin compared to the rules of origin existing 
under the previous trade agreements, particularly as a result of the adoption of the rule of simple 
processing for cotton articles originating in Madagascar, which constitutes an undeniable advantage for clothing firms. 
4.7  Transport services 
4.129.  Madagascar is a large exporter of transport services, amounting to over US$400 million in 
2012, corresponding to almost 10% of its total exports of goods and services and essentially reflecting spending by tourists travelling to Mada gascar with the airline Air Madagascar. As regards 
imports, expenditure was close to US$600 million in 2012, or 15% of total imports of goods and 
services, mainly a reflection of freight costs for goods imports. WT/TPR/S/318 • Madagascar 
 
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  4.130.  Although Madagascar did not make any specific commitments on transport under the 
GATS60, the sector is essentially open to foreign presence, which often dominates. The current 
transport policy has not changed since 2000: the aim is still to attract private investment, including foreign investment, in public-private partnerships with the Malagasy State. As underlined 
by the Ministry responsible for transport in 2013 in its sectoral transport policy, it is now essential 
to invest in rehabilitating the road and rail infrastructure because this is one of the principal conditions that will allow Madagascar's foreign trade to take off and, consequently, the country's 
economic development.
61 
4.131.  Even though the current policy still plan s to privatize operational activities, with the 
Government maintaining a strategic planning, regu lation and coordination role, several companies 
listed in the privatization programme in 1997 are still in the State's portfolio, including the airline 
Air Madagascar (in which the State's share is 80%); the Malagasy National Railway Network 
(RNCFM); Madagascar Airports; and the Finance Co mpany for the Development of Transport and 
Tourism (SOFITRANS).62 The Government has not defined its programme for the privatization of 
these bodies. The delays in the sector's developm ent have certainly been one of the reasons for 
the poor performance in the Logistics Performanc e Index, measured by the World Bank between 
2007 and 2014 (Chart 4.12). Yet the performance of the logistics sector is a key factor in the 
competitiveness of exports. 
Chart 4.12 Logistics performance index, 2014 
0.00.51.01.52.02.53.03.54.0
LPI Quality of infrastructure Ease of arranging
competitively priced
shipmentsCompetence and quality
of logistics servicesAbility to track and trace
consignmentsTimeliness of shipments
in reaching destination
within a scheduled or
expected delivery timeMadagascar Sub-Saharan Africa Mauritius Malawi South AfricaScore: 1 (low) to 5 (high)
 
Source: World Bank, viewed at: http://lpi.worldbank.org . 
4.132.   Indeed, very few transport reform and rehabilitation pr ojects have been implemented 
since the major container port was put out to concession in 2005. The two major challenges facing the authorities in developing an efficient transpor t system conducive to sustainable growth are to 
guarantee the independence of the regulatory au thorities and to improve their coordination. The 
Transport Ministry's total investment and operating budget for 2015, however, was not more than the equivalent of US$12 million. 
4.7.1  Water transport and port services 
4.7.1.1  Maritime and river transport 4.133.  Three shipping companies run container ships to the island (CMA-CGM, Mediterranean 
Shipping Company and SAFMARINE (Maersk)). The list is not available on any official website. 
According to the authorities, the three companies ch arge very similar rates, which implies lack of 
competition. 
                                               
60 WTO document GATS/SC/51 of 15 April 1994. See the I-TIP integrated database: http://i-
tip.wto.org/services/(S(o2wbbw dggzwf3jpvzq1guszw))/default.aspx . 
61 The Ministry has a website: http://www.transport.gov.mg/blog/2013/02/13/politique-sectorielle . 
62 Decree No. 97-584 containing the first list for the programme on State withdrawal from enterprises or 
from participation, viewed at: http://www.mefb.gov.mg/images/files/STP/decret_584_97.pdf . WT/TPR/S/318 • Madagascar 
 
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  4.134.  These companies go to Madagascar as part of their regional "feeder" services in the 
Indian Ocean, with Mauritius as their main hub. 
4.135.  There is no national fleet providing international transport, for either cargo or passengers. 
National cabotage, "bornage" (i.e. domestic transport limited geographically to around the ship's 
home port) and internal waterway transport are re served for Malagasy flag vessels, except in the 
event of exemptions granted by the maritime ad ministrative authority. These exemptions are 
almost systematically granted to the three shipping companies mentioned above for container 
traffic. Bulk transport (cotton, raffia ) are reserved for national carriers. 
4.7.1.2  Port services 4.136.  Madagascar's two major ports are both far from the capital: Toamasina, the largest port, is 
on the east coast, 380 km away from the capital,  while Mahajanga, on the west coast, is 570 km 
away. In 2005, the container terminal at Toamasina Port was modernized by the foreign private 
operator Madagascar International Container Terminal Services Ltd. (MICTSL)
63, after the 
Toamasina Autonomous Port Company (SPAT)64, the manager of the port, gave it a concession for 
20 years. According to the World Bank, this has resulted in large gains in productivity per ship, 
particularly in terms of punctuality (Chart 4.12). The other ports, with the exception of Ehoala, come under the Port, Maritime and River Agency (APMF), established in 2004 (Table 4.12).
65 
4.137.  The new private mineral ore port (Ehoala) is a deep-water port (15.75 metres at berth) 
and is managed by a private company. It was built in 2007 as part of the Rio Tinto QMM ilmenite extraction project (Section 4.5.5). It was jointly financed by the Rio Tinto Group and the Malagasy 
State under the Integrated Growth Poles Project (IGPP) financed by the World Bank. The port 
facilities enable mineral ore extracted from the QMM mines to be exported while at the same time 
helping to end the isolation of the Anosy region. It is privately managed under a global concession regime. 
4.138.  Investors are still being sought to manage the ports of Antsiranana-Nosy Be, Mahajanga 
and Toliara. The management of each of these port s is to be handed over to a public limited 
company in whose capital the State, the autonomous provinces and their components would hold 
the majority, with private operators being invited to take a maximum 20% share. The actual 
creation of these autonomously managed ports is awaiting the adoption of a new Code and its implementing decrees. The 2000 Maritime Code is still in force, although since 2008 it is being revised in order to reflect the State's new approach to private management of transport 
infrastructure (a draft Maritime Code is available on the APMF's website).
66 
Table 4.12 Indicators for Madaga scar's principal ports, 2013 
 Toamasina  Antsiranana  Mahajanga  Toliara Ehoala  
Ships docking      
Ocean-going ships 402 35 52 0 38 
Domestic cabotage  11 130  643 2 22  
Regional feeders (Comoros, 
Mauritius, Réunion, 
Seychelles, Mayotte, 
Mozambique, Kenya) 36 113 77 1 26 
Bornage 1 143  0 297 0 0  
Tonnes unloaded  3,697,280  152,216  184,905  5,101 73,976  
Containers unloaded (TEU) 86,246  4,359  6,795  131 3,781  
Passengers disembarked n.a. n.a. 1,899  0 8,957  
Warehouses 53,000 m2 6,274 m2 20,000 m2 8,945 m2 n.a.  
Aprons 870,000 m2 6,602 m2 16,935 m2 23,500 m2 n.a. 
Management      
Port owner  State  State  State  State State  
Regulatory authority SPA T APMF  APMF  APMF APMF  
Port management SPAT APMF  APMF  APMF Ehoala Port SA  
Container terminal 
management Madagascar International 
Container Terminal (MICTSL)  APMF  APMF  APMF Ehoala Port SA  
                                               
63 Viewed at: http://www.ictsi.com/operations.aspx?p _id=3&category_id=72&operation_id= 
136&id=193 . 
64 Viewed at: http://www.port-toamasina.com . 
65 Viewed at: http://www.apmf.mg/#nogo1 . 
66 Law No. 99-028 of 3 February 2000, viewed at: http://www.apmf.mg/pdf/code2000.pdf . WT/TPR/S/318 • Madagascar 
 
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   Toamasina  Antsiranana  Mahajanga  Toliara Ehoala  
Container handling ICTSI  COMADIE  COMAMA 
SEMS  SEMS 
COMATO Strang Ehoala  
Port Logistics 
(SEPL) 
Bulk handling SMMC  COMADIE 
SGTPSM COMAMA 
SEMS COMATO 
SEMS SEPL 
ISPS certification 2013 n.a. n.a. n.a. 2010 
n.a. Not available. 
Source: WTO Secretariat, on the basis of information provided by the authorities. 
4.139.  The APMF is self-financed through paymen t of services provided to port and maritime 
transport users, but concession fees are paid by port operators directly into the State's general 
budget. A new Decree determines the principal port charges.67 In ports managed by the APMF that 
have not been put out on a global management and operating concession, the charges include: 
 port dues for ships, goods and passengers; 
 berthing dues; 
 charges for temporary occupation of aprons; 
 government fees and operating charges owed by concessionaires or permit holders; and 
 handling fees owed by certain categories of ship. 
4.140.  "Merchant shipping" dues also payable to the APMF include: 
 fees for the issuing and renewal of maritime documents which the APMF is authorized to 
issue on behalf of the State such as: deeds,  certificates diplomas, patents, permits and 
attestations; 
 safety inspection fees; and 
 ship registration fees. 
4.141.  The assessment bases and rates for these dues and fees are fixed by decree, the tariffs by 
interministerial order or in the specifications for global concessions. 
4.142.  The International Ship and Port Facility Se curity Code (ISPS Code) is in force in the ports 
of Toamasina and Ehoala. Bringing all the internatio nal ports up to standard is a declared priority, 
as is the implementation of international conventions on monitoring the risks of marine pollution. 
4.7.2  Road transport 
4.143.  The fact that the only route linking the capital (Antananarivo) to the main port 
(Toamasina) has just one lane each way, goes over three passes and through two national parks, 
with an average speed of around 40 km/h for the 380-km trip, meaning that lorries take an 
average of over 24 hours because of the numerous po tholes or landslides, shows the extent of the 
land transport constraints and their likely impact on trade, including international trade. In 
general, road transport infrastructure is under-dev eloped and in a very poor state of repair so 
large increases in the investment and operating budgets are needed in order to facilitate trade. 
4.144.  The authorities have also indicated that the bus station infrastructure is inadequate, the 
ageing fleet of vehicles is not conducive to optimum road safety, and heavy lorries that do not 
meet the requisite standards and carry excessive loads degrade the roads and engineering works. 
The poor state of the infrastructure is a major obstacle to Madagascar's economic development, and that of its agricultural, mining and tourism sectors in particular. 
4.145.  Projects to rehabilitate the road infrastructure are financed by the development partners 
and (in principle) by a contribution from the Road Maintenance Fund, which was supposed to be replenished by a fee of around 4.5% of the price at the pump in 2014. 
                                               
67 Decree No. 2012-391 providing for the restructuring of the Port, Maritime and River Agency (APMF), 
laying down its statutes and financ ing modalities, and establishing the Port, Maritime and River Transport 
Council and the Maritime Supp ort and Operations Centre. WT/TPR/S/318 • Madagascar 
 
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  4.146.  The regulatory framework for land tran sport (railways and roads) dates back to 2004.68 
According to this legislation, any company under Malagasy law, even those with foreign capital, may freely set up to offer road transport services. In March 2015, ten years later, the implementing decrees for this law had not yet been  approved. The tasks of regulation, granting of 
concessions and management have been delegated to the Land Transport Agency
69, which issues 
driving licences, vehicle registration cards and permits to operate transport vehicles, and also approves road carriers. The authorities have poin ted out that the subsector suffers from lack of 
professional organization and poor service. 
4.7.3  Rail transport 
4.147.  The Government is currently seeking investors capable of upgrading Madagascar's rail 
network and making it profitable. Rail infrastructure is in a poor state, with metric gauge tracks 
and outdated rolling stock, which caused derailments in 2014. According to information received in 
connection with this report, carrying freight by ra il between the principal port at Toamasina and 
the capital takes at least a week. 
4.148.  At present the network is divided into two: since 2004, the 750-km long northern route 
has been operated by Madarail under a 25-year concession.
70 Madarail is a privately owned 
company with foreign capital in which the State has a 25% share; it has three segments, including 
one track from the port at Toamasina to the capital Antananarivo. The company had promised 
substantial investment (US$37.5 million over five years) to modernize the rail track and keep up with demand, especially from mi ning companies, under the Fourth Adaptable Program Loan (APL4) 
project financed by the World Bank's Internationa l Development Association (IDA). Because of the 
political situation in 2009, this investment never materialized. In the south, the RNCFM is still 
owned by the State but, generally speaking, the trains are not operational. 
4.7.4  Air transport and airport services 
4.149.  The development of air traffic has been badl y hit by the impact of the series of political 
crises that have affected Madagascar since 1990, the latest in 2009 (Chart 4.13). In 2014, only 1.6 million passengers travelled by air. Besides having an effect on international arrivals, these 
crises have caused serious losses of purchasing power for the population, depriving it still further 
of access to air transport services. Recently, air traffic has suffered from the economic downturn in Europe, which has reduced demand for tourism, and has also felt the effects of the regulatory measures taken against certain aircraft belonging to Air Madagascar. 
Chart 4.13 Civil aviation in Madagascar, 2008-2013 
 01 0002 0003 0004 0005 0006 0007 0008 0009 000
2008 2009 2010 2011 2012 2013Long-haul network Regional network Domestic network 050 000100 000150 000200 000250 000300 000350 000400 000450 000
2008 2009 2010 2011 2012 2013Cargo carried (tonnes) Number of passengers carried
 
Source: Madagascar Civil Aviation (ACM). 
                                               
68 Law No. 2004-053 of 28 January 2005. 
69 Decree No. 2006-279 of 25 April 2006. 
70 Madarail has a website: http://www.madarail.mg . WT/TPR/S/318 • Madagascar 
 
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  4.150.  Yet Madagascar's geography (mountains in the centre of the country and dense plant cover 
in the east) and the large size of the island mean that air transport plays a key role. Performance in this subsector has considerable repercussions on other subsectors of Madagascar's economy, the foremost being tourism. 
4.7.4.1  Regulation of air transport 
4.151.  The ACM is responsible for regulation, the granting of operating licences and any other 
documents needed by air carriers (including service suppliers at airports and airfields) and for 
managing safety standards.
71 It compiles the national air transport regulations.72 
4.152.  Since the enactment of the Civil Aviation Code in 2004, the State has opened up domestic 
air transport to competition from companies under Malagasy law.73 The Code was replaced by a 
new one in 2012, and supplemented by a decree in 2014 laying down the economic rules for air 
transport.74 Despite this opening up, no new company has invested in providing domestic flights. 
As cabotage is not allowed, Air Madagascar has been the only airline to provide regular domestic flights since 1996, even though its domestic monopoly has been abolished.
75 Around a dozen small 
national private companies fly domestic routes for passengers on demand. In 2014, Air 
Madagascar provided around 90% of domestic flight s; the State holds 89% of its capital. In 2011, 
Air Madagascar was on the brink of bankruptcy , but was recapitalized by the State in 2012.76 
Furthermore, since April 2011, some of Air Madagascar's fleet has been banned from flying in 
European air space.77 
4.153.  The ACM negotiates Madagascar's international air transport agreements, including 
frequencies, destinations and tariffs. Since 2008, most of these agreements have provided for 
multiple destinations. Madagascar applies the Decision relating to the implementation of the 
Yamoussoukro Declaration of 2000 concerning the lib eralization of access to air transport markets 
in Africa. Among the 38 bilateral agreements sign ed by Madagascar are an open-skies agreement 
with the United States in 2004. It has also negotiated agreements with unlimited frequency with 
several partners, including Namibia, Chad, Cameroon, the United Arab Emirates, Kenya, Thailand and Ethiopia. 
4.154.  Because of the strategic importance of  air transport for Madagascar's economy and 
tourism in particular and in view of the relatively high prices charged by airlines, the authorities could encourage or systematize the updating of  Madagascar's international air agreements, 
including those not being implemented, in order to liberalize the clauses on tariffs or capacity, 
which should help to bring down prices. The market for unscheduled flights (e.g. charters), on the 
other hand, is wholly open to competition wi th freedom to determine tariffs and capacity. 
4.155.  Domestic air transport needs to be further liberalized in order to increase the supply and 
quality of domestic routes. As mentioned above, only Air Madagascar provides scheduled domestic 
services and its service is criticized. The authorities are not currently considering authorizing, for example, consecutive cabotage (eighth-freedom rights), which would enable foreign companies to 
offer domestic services. 
4.7.4.2  Airports 4.156.  Madagascar has 57 airports open to public air traffic, of which 12 have been managed 
since 1991 by the state-owned enterprise Aéroports de Madagascar (ADEMA). The international 
airports at Ivato (Antananarivo) and Nosy-Be can take wide-bodied aircraft, while the other 
                                               
71 Decree No. 99-821 of 20 October 1999. 
72 Summary of Madagascar's nati onal regulations, viewed at: http://acmweb.acm.mg/dreg/0-
SOMMAIRE DES TEXTES REGLEMENTAIRES/SOMMAIRE DES REGLEMENTS NATIONAUX DE MADAGASCAR 29 
07.pdf  . 
73 Law No. 2004-027 of 9 September 2004, viewed at: http://www.justice.gov.mg/wp-content/ 
uplLoads/textes/1TEXTES NATIONAUX/DROIT PUBLIC/Transports/Transport aerien/L2004-027.pdf . 
74 Law No. 2012-011 of 13 August 2012 repealing Law No. 2004-027 of 9 September 2004, and Decree 
No. 2014-1106 on economic regulation of air transport operations, viewed at: http://www.acm.mg/IMG/pdf/decret_2014_1106_reg_economique.pdf . 
75 Privatization Law No. 96-011 of 13 August 1996, amended by Law No. 98-014 of 17 November 1998. 
76 Viewed at: http://lanation.mg/archive.php?id=3052 . 
77 European Commission (2014). WT/TPR/S/318 • Madagascar 
 
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  six airports can receive domestic flights (Ant siranana, Mahajanga, Sainte-Marie, Toamasina, 
Toliara and Tolagnaro). All the airports are owned by the State. Twenty-eight airfields are managed by private operators and sixteen offer no assistance; two of them comply with the standards set by the Ministry responsible for transport. 
4.157.  In addition to management, the 1991 concession contract covers the airports' ground, 
works, buildings, facilities, equipment, materials and services. The Malagasy State holds 64% of the company's registered capital.
78 ADEMA determines the rates for its services, including airport 
fees, subject to approval by the Mi nistry responsible for transport. It is also included in the list of 
companies due for privatization.79 Most of its revenue comes from aviation fees, which account for 
85% of its overall turnover and whose rates ar e determined in a decision by the ACM after 
consulting users. The following services are provided by service suppliers holding monopolies: 
 supply and distribution of av iation fuel: Total Aviation; 
 ground handling and assistance: Air Madagascar80; 
 control of air navigation safety at three airports (Ivato, Toamasina and Mahajanga): 
Agency for Air Navigation Safety in Africa and Madagascar (ASECNA). ADEMA provides 
this service at the other nine airports. 
4.8  Tourism 
4.158.  Madagascar's spectacular land and marine natural resources make it a prime tourist 
destination for a wide range of travel interests, and tourism is a key sector of the economy. In 2013, travel (i.e. tourism and other travel) accounted  for US$600 million of export earnings (Chart 
1.6), or 13% of total exports of goods and services. Tourism's estimated total contribution to 
Madagascar's GDP was 16% in 2013 and the total number of jobs in the sector represented 12% 
of total employment, including both  direct and indirect employment.
81 Around 80% of tourism 
revenue comes from travellers from the euro zone, most of them from France or Italy. Overall, 
tourism is open to competition, including from abroad, despite Madagascar's lack of commitments 
in this sector under the GATS.82 
4.159.  Tourist arrivals, either by air or on crui se ships, fell drastically after 2008 (Chart 4.14). 
Forecasts from the Ministry in charge of tourism (MT) aimed for 250,000 tourists in 2014. By 
comparison, the Madagascar Action Plan (MAP ) of 2007 had a target of 500,000 international 
arrivals annually, and earnings of US$750 millio n in 2012. The inadequacy of the statistics on 
tourism hampers planning and decision-making. 
                                               
78 French Development Agency (AFD) (2012). 
79 Viewed at: http://www.adema.mg . 
80 Decree No. 2013-027 of 15 January 2013 regulating airfields in Madagascar, Title 10, sets out the 
conditions for providing these services. 
81 World Travel & Tourism Council, p. 6 [18 June 2014]. 
82 I-TIP database, viewed at: http://i-tip.wto.org/services/(S(wxl23e4pa2sdtg12cxvg2a0m)) 
/SearchResultGats.aspx . WT/TPR/S/318 • Madagascar 
 
- 108 - 
 
   Chart 4.14 Tourism: number of arrivals and earnings, 2000-2012  
050100150200250300350400
050100150200250300350400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Number of arrivals (right-hand scale) Revenue(US$ million) (thousand)
 
Note: Spending in Madagascar by international travellers. 
Source: World Bank, World Development Indicators; and World Tourism Organization, Compendium of 
tourism statistics, 2012, 2013 and 2014 editions. 
4.160.  Madagascar's hotel infrastructure has developed considerably since 2008 (Table 4.13), a 
reflection of the efforts made since 2003. In 2003, tourism was placed at the heart of the World Bank's IGPP. A master plan for tourism in Madaga scar was adopted in 2003, targeting the need for 
sustainable management of the sector. In order to promote the development of eco-tourism, 
23 tourism reserves have been established. Subsequently, the MAP further increased the importance of developing the tourism sector in Madagascar.
83 Partly as a result of these efforts, 
the average length of a tourist's stay in Madagascar rose from 21 to 23 days. Despite these 
initiatives, the political crisis in 2009 did not spare the sector, which saw a definite downturn in 
activities. 
4.161.  Following a slight recovery, tourism was hit once again by security and air transport 
problems in 2013. After this transitional period, the MT adopted a new development strategy in 
July 2014 to revive the sector. The lack of luxury  hotels and the shortage of hotels that can 
accommodate large groups of tourists are currently cited as obstacles to growth in this sector. A 
new IGPP project aimed at developing tourism was adopted by the World Bank in 2014.84 
Table 4.13 Number of hotels and travel agencies, 2008 and 2011-2014 
 
2008  2011  2012  2013 2014 Growth 
2008-2014 
(%) 
Hotels 1,292  1,693  2 010   2,251 2,325 80  
Hotel rooms 14,493  19,112  20,520  22,263 22,888 58 
Travel agencies/Suppliers of tourism services 861  1,019  1,280  1,356 1,378 60  
Source: Ministry responsible for tourism. 
4.162.  The MT drafts and implements tourism policy.85 The Ministry was reorganized in 
January 2015; its website functions reasonably well and is regularly updated.86 The MT decides on 
the classification of hotels and restaurants, with  the assistance of the Regional Directorate of 
                                               
83 World Bank (2013), p.14. 
84 World Bank, viewed at: http://www.worldbank.org/projects/P113971?lang=en . 
85 Website of the Ministry responsible for tourism: http://www.tourisme.gov.mg . 
86 Decree No. 2011-726 of 6 December 2011, determining the responsibilities of the Minister responsible 
for tourism and the general organization of the Ministry, viewed at: 
http://www.madagascar-services.biz/wp-content/uploads/2013/02/Décret-N°-2011-726-du-06-décembre-201
1.pdf. WT/TPR/S/318 • Madagascar 
 
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  Tourism where the establishment is situated.87 The MT oversees and supervises several institutions 
and organizations in which the State participates: 
 The National Institute of Tourism and Hospitality (INTH) is an independent government 
institution which dates back to 1991. It offers training programmes in hotel management 
and sustainable tourism. 
 The Madagascar National Tourism Board (ONTM) was set up in 2003 to promote 
Madagascar as a destination. It groups together 22 regional tourism boards belonging to 
the private sector, eight professional associ ations, the airline Air Madagascar, the INTH 
and the Ministry responsible for tourism. In 2013, 46% of its income came from subsidies from various technical and financial partners, and 54% from the tourism permit. 
 National Tourism Development was created in October 2009. The Malagasy State holds 
99% of its capital and Air Madagascar 1%. The bulk of its financial resources come from the rental paid by the Andilana Beach hotel in Nosy Be and, in general, from the funds 
made available by the State for financial partnerships in tourism projects. The creation, 
purchase or take-over of the management of hotels and contributing to any activities that help to develop tourism in Madagascar are among its priority tasks. 
 The Malagasy Hotel Company (SMH) is a company whose assets belong to the State, 
which has a holding in the company, and it is run by Hotel Carlton. 
 ZAHAMOTEL is a state-owned company with two operating units. The Majunga complex 
is operated by SOFITRANS and that at Ihosy is not operating. 
4.163.  In addition, Madagascar National Parks is a government auxiliary responsible for promoting 
the policy for managing biodiversity and implementing the strategy for the conservation and development of the 52 protected areas.
88 
4.164.  The private sector associations belonging to the ONTM comprise the following: the 
Federation of Hotel and Restaurant Owners of Madagascar (FHORM) (1991), 350 members, the national umbrella organization
89; the Association of Professional Tour Operators of Madagascar 
(TOP) (1991)90; the Association of Travel Agencies of Madagascar (1981), around 40 local travel 
agencies; the National Federation of Tourist Guid es (1999), 140 local and national guides; and the 
Madagascar Association of Tourism Operators (GO TO Madagascar), set up in 2002 by a group of 
companies in the sector. 
4.165.  There have been no major changes to the regulatory framework for tourism since the first 
review of Madagascar in 2001. The principal legal texts are available on the MT's website. Law No. 95-017 of 25 August 1995, the Tourism Code
91, does not specify any requirements as to 
nationality or residence in order to engage in activities in this sector, although a prior authorization 
from the Ministry must be obtained. Tourism oper ators must preferably employ Malagasy nationals 
of equal capability.92 The Malagasy nationality requirement for guides is not laid down in the order 
regulating the profession, although it is specified that national guides must collaborate with a local 
                                               
87 See Article 67 of Decree No. 2001-02 revising Decree No. 96-773 of 3 December 1996 on standards 
for tourism companies, establishments and operat ors, as well as the ru les for applying them. 
88 See for example: http://www.parcs-madagascar.com/ma dagascar-national-parks_en.php? 
Navigation=34 . 
89 Viewed at: http://www.hotels-restaurants-madagascar.com . 
90 Viewed at: http://www.top-madagascar.com/article.php?id=11&lang=fr . 
91 Viewed at: 
http://www.madagascar-services.biz/wp-content/uploads/2013/02/Loi-N°-95-017-du-25-août-1995-Code-du-T
ourisme.pdf . 
92 Ministerial Order No. 4912-2001-MINTOUR of 19 April 2001 determining the composition of 
applications for authorization to open  travel companies and offe r tourism services, as we ll as the professional 
capability of personnel. Viewed at: 
http://www.madagascar-services.biz/wp-content/uploads/2013/02/Arrêté-ministeriel-N°-4912-2001-MINTOUR
-du-19-avril-2001-obtention_licence_EVPT.pdf . WT/TPR/S/318 • Madagascar 
 
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  guide whenever they are working in a particular locality.93 Madagascar has been a member of the 
World Tourism Organization (UNWTO) since 1975. 
4.166.  In 2014, tourism was one of the "key sectors for short-term recovery".94 In the opinion of 
both the private sector and the Government, several challenges will be decisive for the success of 
this recovery. One of the problems most frequently mentioned is limited, costly and unreliable air 
transport. As regards domestic air transport, Air Madagascar is repeatedly cited as an obstacle to development of the sector (Section 4.7.4). At the international level, Madagascar only has four 
direct weekly flights to Europe (France and Italy) and two others to Thailand and China. At the 
regional level, there are direct flights to South Africa, Réunion, Mauritius, Kenya, Comoros, Mayotte and Seychelles. Madagascar is ranked as one of the least accessible countries globally according to the World Bank Index.
95 
4.167.  The second problem concerns access to the land needed for real estate projects. In order 
to facilitate access to property by foreign investor s, in the previous review it was mentioned that 
land was bought by the MT and would then be the subject of an international tender96, but this 
policy has not been implemented (Section 2.3.6). Th e property situation of investors is often not 
regularized. Most of the time, operators only have a deed of sale, although the texts in force also require the possession of a building permit, which operators are not always able to provide. 
4.168.  Thirdly, in practice, only 30% of promot ers appear to receive bank loans. In addition, 
interest rates are generally too high for medium- and long-term loans (Chart 1.3). 
4.169.  Lastly, taxation on tourism investment is not clearly defined. In 2014, investment in 
tourism was subject to ordinary law and not to the free-zone regime, although tax incentives were 
introduced in 2013, such as reduced tax for inve stment, equal to 50% of the investment made 
(Article 01.01.14 of the General Tax Code (CGI)).
97 This measure is justified in the context of the 
Government's economic recovery programme, under which tourism is one of the key sectors. For 
stamp duty and similar charges, Article 02.05.06 of the CGI fixes the amount of each visa for 
foreigners; Article 02.8.15 of the CGI specifies that the purchase of buildings for the tourism industry benefits from a reduction of half the sales tax. 
4.170.  In addition, the procedures for granting the licences required by tourism companies are 
frequently described as problematic and could be simplified, especially through closer interministerial coordination (Section 2.3).
98 
4.9  Telecommunications and postal services 
4.9.1  Telecommunications services 
4.171.  Madagascar's telecommunications market ha s a turnover of around US$250 million, with 
some 9 million clients, the number of which was trending downwards in 2013 (Table 4.14). 
Telma SA, the historical operator, is the only one with a licence for fixed telephony. Its capital 
belongs to the State (32%) and private companies (68%). The mobile telephony market is shared 
by Telma Mobile, which had 19% of the total number of subscribers in 2013, Airtel, a foreign 
company (34% of subscribers); and Orange Madagascar (47%), also owned by a foreign group. 
The sector's average growth has been around  9% per annum since 2008. There is little 
competition in the market and prices are high. Th is could change following the publication in 2014 
of the decrees implementing Law No. 2005-023 governing the sector, the aim of which is to 
encourage competition while at the same time lowering costs, thereby obliging operators to share 
high-speed infrastructure. 
                                               
93 Order No. 31752-/2010/MTA regulating the profession  of guide and the classification of guides. 
Viewed at: http://www.madagascar-services.biz/wp-content/uploads/2013/02/Arrêté-N°-31752-2010-MTA-du-19-Août-20
10.pdf . 
94 Government of Madagascar (2013). 
95 World Bank (2013), p. 9. 
96 Viewed at: http://www.tourisme.gov.mg . 
97 The Annex to Decision No. 05 MFN/SG/DGI/DELF of 26 December 2013 sets out the terms of 
eligibility and the list of ma terials for this  reduced tax. 
98 The procedure for obtaining an authorization to open and the contents of each application were 
viewed on the Ministry's website: http://www.tourisme.gov.mg/?page%20id=35 . WT/TPR/S/318 • Madagascar 
 
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  Table 4.14 Telecommunications statistics, 2008-2013 
 2008  2009  2010  2011 2012 2013  
Fixed telephony statistics        
Telephone lines 164,851  186,150  142,065  236,863 242,963 245,603  
Telephone lines (per 100 persons) 0.83  0.91 0.67 1.09 1.09 1.09  
Mobile telephony statistics        
Mobile telephony subscribers 4,835,239  6,283,799  7,711,721  8,665,156 8,778,600 8,461,120  
Mobile telephony subscribers 
(per 100 persons) 24.27  30.66  36.58  40.04 39.38 36.13  
Internet statistics        
High-speed fixed Internet subscribers 3,488  4,558  5,359  6,852 8,667 13,911  
High-speed fixed Internet subscribers 
(per 100 persons) 0.02 0.02 0.03 0.03 0.04 0.06  
Internet users (per 100 persons) 1.65 1.63 1.70 1.90 2.05 2.20 
Secure Internet servers 4.00  8.00 10.00  11.00 12.00 15.00  
Secure Internet servers (per 1  million 
persons) 0.20 0.39 0.47 0.51 0.54 0.65 
Note       
Investment in telecommunications with 
private participation (US$ million)  162.2  83.0 132.0  124.4 87.8 n.a. 
Imports of ICT goods (% of total goods 
imports) 3.82 3.58 3.13 2.56 2.38 n.a.  
n.a. Not available. 
Source: World Bank, World Development Indicators.  
4.172.  The Internet market in Madagascar has made enormous strides since 2012, thanks to the 
authorization given to mobile telephony operators to transmit data, although the rate of 
penetration remains fairly poor because of the population's low purchasing power. Since 2009, Telma has invested in installing optical fibre infrastructure (backbone), extending for 6,000 km in 
2014, compared to 4,000 km in 2008, with a view to developing fixed high-speed and telephony 
services. In October 2014, Telma SA was also the only Malagasy operator taking part in the EASSy (East African Submarine Cable System), linking Madagascar to the global submarine fibre-optic 
network launched in 2003 and put into operation in 2010. 
4.173.  The Ministry responsible for telecomm unications is the Ministry of Postal and 
Telecommunications Services and New Technology. The Malagasy Telecommunications Studies and Regulation Board (OMERT), set up in 1997, is th e regulatory authority for the subsector and as 
such must ensure that there is effective fair and sustainable competition. 
4.174.  The regulatory framework was overhauled in 2005
99, following the privatization of Telma in 
2004, but the Law had no implementing decree. In October 2014, three implementing decrees 
were adopted in order, inter alia , to boost competition in the subsector, notably by allowing 
operators to expand their activities to all the services they wished to provide.100 The decrees are 
Nos 2014-1650, 1651 and 1652, all of 21 October 2014. The texts define the procedures and 
measures to be applied by OMERT to regulate the telecommunications subsector; contain the 
regulations for telecommunications networks and services; and define regulation of the subsector. Licences are granted by means of competitive bidd ing, which may be organized by OMERT, by the 
Ministry responsible for telecommunications or at the request of an applicant. Decree No. 1650 
specifies the cost of obtaining the various licences. 
4.175.  Rates are fixed freely by the operators and are subject to OMERT's approval; the same 
applies to interconnection rates, but only if there is disagreement among the operators. OMERT 
monitors application of the decree concerning  the methods for containing rates. Decree 
No. 2014-1651 defines in particular the obligations  of universal service, coverage, quality of 
service and confidentiality for all licence holder s. OMERT evaluates the quality of the service, 
receives the opinions of users and envisages remedi al action when necessary. In this connection, 
the Communications Infrastructure Project for Madagascar (PICOM) is intended to make good the gaps in the universal service by lowering the cost of access to high-speed telecommunications 
                                               
99 Law No. 2005-023 of 17 October 2006. 
100 The decrees can be viewed on OMERT's website: http://www.omert.mg . WT/TPR/S/318 • Madagascar 
 
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  services, extending the geographical coverage of the services, and introducing high-speed 
telecommunications infrastructure in Madagascar's isolated zones and remote regions.101 
4.176.  The licence fees determined in Decree No. 2014-1651 are paid to OMERT for the 
Telecommunications and ICT Development Fund.102 The licence fee amounts to 2% of turnover for 
operators subject to the licensing regime (1% for those subject to the declaration or free regimes). 
The amount of the contributions to the Fund is set at 2% of turnover for all operators. The Fund's 
annual resources amounted to the equivalent of US$5 million in 2012-2013. The Minister 
responsible for telecommunications alone assumes the tasks of administration, direction and 
related control.103 
4.177.  The third Decree (No. 1652) defines the terms for managing the international cables 
serving Madagascar and the national broadband telecommunications network (the "backbone"). 
The intention of this new series of rules is to impose telecommunications infrastructure-sharing so 
as to lower costs and protect the environment. This could in future lower Internet connection costs, which are still relatively high in Madagascar and do not allow competitive development of 
high value-added services. 
4.9.2  Postal services 4.178.  The public postal operator, Paositra Malaga sy (PAOMA), is responsible for managing postal 
services.
104 It has financial autonomy under the technical supervision of the Ministry responsible 
for telecommunications. It may set up branches, join with local or foreign partners and participate in companies or organizations whose objective is related or complementary to the responsibilities given to it by law. 
4.179.  PAOMA has the monopoly of reserved postal services (letters and packages weighing less 
than 2 kg and postal accounts) and proposes various financial services including postal savings accounts to around 500,000 savers. It currently has a network comprising 250 post offices and 
rural postal agencies. PAOMA has been a full member of the Universal Postal Union since 
2 November 1968 and became a member of the Pan African Postal Union in 1980. It did not prove 
possible to ascertain the operating conditions for express delivery services. 
4.10  Financial services 
4.180.  Banking is the backbone of financial activities in Madagascar. Although the country did not 
undertake any commitments on financial services under the GATS in 1994, the latter are open to foreign presence and foreign companies entirely dominate Madagascar's highly concentrated 
banking subsector, with three foreign banks shar ing two thirds of the market. Foreign investors 
are beginning to enter the microfinance subsector.  There is also a strong foreign and Government 
presence in the insurance subsector. 
4.10.1  Banking and microfinance services 
4.181.  The Malagasy banking sector consists of 11 banks, all of them foreign owned. Despite the 
crisis and the squeezing of both public and priv ate foreign capital flows that ensued, the banking 
subsector as a whole has not reported losses since 2008. Nevertheless, only a very limited 
percentage of the population has access to bank credit (less than 5% in 2008 according to the World Bank). Insufficient credit availability has a negative impact on the economy as a whole, particularly on agriculture, but also on export sectors such as tourism (Section 4.8).
105 
                                               
101 Viewed at: http://www.mtpc.gov.mg/index.php/picom. 
102 The Fund is governed by Decree No. 2006-16 of 22 August 2006, as amended by Decree 
No. 2007-031 of 30 January 2007. 
103 Viewed at: http://www.omert.org/wp-content/uplo ads/2014/04/RAPPORT-définitif-CFDT-2012-
OMERT.pdf . 
104 Law No. 93/001 of 28 January 1994, on institutional reform of the telecommunications sector and 
Paositra, viewed at: http://www.mtpc.gov.m g/index.php/paoma . 
105 Financial Times, "Bank Lending at Root of UK's Economic Puzzles", 5 August 2014. WT/TPR/S/318 • Madagascar 
 
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  4.182.  The authorities are aware that easier access to credit could rapidly boost economic 
growth106 and have introduced several measures to facilitate access to microfinance. A national 
microfinance strategy was established over the pe riod 2008-2012, with the objective of improving 
the legislative and institutional framework and expanding its geographical coverage. The 
microfinance sector has developed strongly and in 2014 a microfinance institution for the first time 
obtained a banking licence. 
4.183.  As indicated in the previous review, regulations specific to microfinance institutions have 
been in force since 2005.107 The microfinance services subsector continued to expand over the 
period 2008-2014, from 25 to 31 approved credit  establishments. A World Bank programme is 
under way to help micro, small and medium-sized enterprises and households to gain access to sustainable financial services.
108 Commercial banking in Madagascar is subject to the national 
banking regulations, the main legislation being the 1996 Banking Law109, under the supervision of 
the Banking and Financial Supervisory Commission (CSBF).110 The criteria for access to banking 
are the same for all credit establishments, whether foreign- or Malagasy-owned. Credit 
establishments whose head office is abroad are only authorized to open credit establishments that 
are fully funded pursuant to the Banking Law, or information, liaison or representation offices, 
which must receive approval from the CSBF. 
4.184.  In order to set up any of these establishm ents, the rule of representativeness requires the 
following minimum capital, which has not changed for a number of years: MGA 3 billion (US$1.2 million) for specialized banks and financial institutions; MGA 1 billion for financial establishments; and MGA 300 to 700 million for mi crofinance institutions. These are extremely 
modest amounts and, according to the CSBF, ar e being reviewed. In addition, this rule of 
representativeness in respect of minimum capital has not always been observed, particularly by some microfinance institutions.
111 
4.185.  The CSBF also controls the criteria for operating credit establishments, monitors the 
stability of their financial situations and ensures respect for the profession's rules of ethics. Control is also exercised over microfinance institutions which accept deposits from the public. In an 
instruction dating from 2009, the minimum amount of mandatory reserves for credit 
establishments was set at 15% of their deposits. In addition, the minimum solvency ratio of own 
funds to assets and off-balance-sheet commitments is 8% and was not respected either in the case of two banks in 2011. 
4.186.  The authorities' declared objective is to  improve prudential supervision of the banking 
subsector and to reinforce the BCM's audit and control functions. According to the CFSB, the 
prudential rules are not always respected by the banks, despite its warnings. Two establishments 
saw their financial situation deteriorate following an increasing number of defaults, while the 
measures recommended by the CSFB to try to reme dy the situation were not followed in full. The 
Industrial and Commercial Bank of Madagascar (BICM) closed in 2014. Among its largest 
depositors was the National Social Security Fund. 
4.10.2  Insurance services 4.187.  Madagascar's insurance market is small, wi th the equivalent of US$50 million in premiums 
(Table 4.15). Five insurance firms have been approved, but the market is dominated by the 
Insurance and Reinsurance Company for All Branches (ARO); the State owns 75% of ARO's 
capital, as well as 48% of the Malagasy Insurance and Reinsurance Company (NY HAVANA). The political crisis led to either short-time working or to a reduction in activities, but not to the 
definitive closing of the insurance companies. The main types of insurance policy are for vehicles, 
                                               
106 See in particular WTO (2014). 
107 Law No. 2005-016 of 27 July 2005. 
108 Viewed at: http://documents.worldbank.org/curated/en/2014/07/19892433/madagascar-acgf-
madagascar-financial-services-project-p109607-implementation-status-results-report-sequence-13 . 
109 Law No. 95-030 of 22 February 1996 on the activities and control of credit establishments, viewed 
at: http://www.banque-centrale.mg/index.php?id=m4_4_1_8 . 
110 Instruction No. 002/97/CSBF of 2 June 1997 (banks and financial establishments) and Instructions 
Nos 002/2007, 003/2007, 004/2007 and 005/2007 of 11 May 2007 (microfinance institutions). 
111 IMF (2014a). WT/TPR/S/318 • Madagascar 
 
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  various risks and life insurance (30%, 30% and 24% of total premiums, respectively).112 
 
Table 4.15 Premiums received by insurance companies, 2008-2013 
 
2008 2009  2010  2011  2012  2013 Growth 
2008-2013 
(%/year) 
ARO 57,319 55,655  61,291  66,535  73,452  83,790 9.2 
NY HAVANA 27,760 23,845  25,544  27,219  29,437  31,815 2.9 
MAMA 8,216 9,062  9,678  10,423  11,814  13,786 13.6 
ALLIANZ 6,611 6,986  8,002  8,843  11,191  11,836 15.8 
SAHAM (ex COLINA) 3,259 5,173  6,690  7,732  8,826  10,727 45.8 
Total 96,554 100,721  111,205  120,752  134,720  151,954 9.5  
Source: Le magazine du syndicat des indust ries de Madagascar – Expansion Madagascar, 
September/October 2011, No. 11, p. 8. Viewed at: http://madagascar-services.biz/wp-
content/uploads/2011/10/Expansion-Ma dagascar-N%C2%B011-SIM-Partie1.pdf . 
4.10.2.1  Regulation 
4.188.  The Insurance Code dates back to 1999 and the regulatory framework for insurance 
services has not changed since the previous review in 2008. The legal texts are available on the website of the Economic Development Board of Madagascar (EDBM).
113 The authority responsible 
for overseeing the insurance subsector is the Financial Operations Directorate and its insurance 
department in the Ministry responsible for finance; this department has provided little information in connection with this report. The institutional framework also comprises an Insurance Council, an information body at the service of the Minister, which grants approval and settles disputes, and a 
Committee of Insurance Companies in Madagascar (CEAM), which represents the private sector 
within the Government. 
4.189.  The requirements for establishing a company are the same for foreign and Malagasy 
insurers. Persons wishing to offer insurance services must be set up as public limited companies 
and comply with corporate law. They must obta in approval for each branch of activity – 
property-casualty, life, and capitalization – but the same company may offer services in all 
branches.
114 The minimum capital required to set up an insurance company offering personal 
insurance is MGA 100 million; MGA 600 million for an insurance company offering property-casualty insurance; and MGA 1 billion for life insurance and capitalization services. Approval for each branch is given by the Minister responsible for finance after the request has 
been reviewed. 
4.190.  A company established in Madagascar may not cover risks outside the country. Likewise, 
risks in Madagascar may not be covered by non-resident companies; residents may not take out 
direct insurance abroad to cover a risk situated in Madagascar. In practice, however, most 
insurance is reinsured abroad. 
4.191.  The only compulsory insurance is civil liability for owners of motor vehicles. The policy on 
premiums is free but is monitored by the Ministry responsible for finance in order to ensure that 
the premiums are reasonable and take into account relevant factors, including the company's solvency and prudential standards. 
4.192.  Insurance and reinsurance companies are authorized to conduct banking operations and to 
take deposits from the public.
115 Any insurance agreement with a Malagasy or foreign company is 
subject to an annual tax of 4.5%, except for annuity contracts (5%), maritime, river or air navigation risks (4%), fire insurance (7% for the goods used for industrial, commercial, 
agricultural, handicrafts, tourism or transport activities; 20% for others), and life and similar 
insurance (3%). 
                                               
112 Central Bank of Madagascar, BCM (2012). 
113 Law No. 99-013 of 2 August 1999 containing the Insurance Code applicable to Madagascar and its 
four implementing decrees, viewed at: http://www.edbm.gov.mg/fr/Textes-reglementaires/Assurances . 
114 Decree No. 2001-1120 on State control and the institutional framework for the insurance subsector, 
viewed at: http://www.mefb.gov.mg/images/files/assurances/ar_1120_01_controle.pdf . 
115 Banking Law, Article 10, viewed at: http://www.banque-centrale.mg/index.php?id=m4_4_1_8 . WT/TPR/S/318 • Madagascar 
 
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  4.11  Professional and business services 
4.193.  Trade in professional and business services is based to a large extent on the movement of 
natural persons. Overseas, Malagasy suppliers of pr ofessional services are affected by rules which 
limit their movement in countries where they seek to offer their services (mode 4 according to the 
GATS terminology). In Madagascar, the entry of foreign professionals is governed by a law of 
1962, amended in 1995 (Section 2.3.5). 
4.194.  Madagascar did not undertake any commitment on professional services in the WTO. The 
professions regulated in Madagascar are listed in Table 4.16. They are usually protected against 
foreign competition. Professionals wishing to practise must obtain an authorization to exercise their profession or accreditation from the relevant professional associations. Each professional association draws up its own rules, regulations and standards for practising the profession in 
question. Although it is not always necessary to be a Malagasy national in order to join a 
professional association, most of the texts contain nationality requirements. 
Table 4.16 Information on some regula ted professions in Madagascar, 2014 
Activity/Law 
(National association) Market access  
Accountant 
Association of Accountants and Financial Experts 
http://www.oecfm.org 
 Law No. 92-047 of 5/11/1992, supplemented by Law No. 96-019 of 4/09/1996 and Law No. 2001-023 of 2/01/2002 on organization of the profession of 
accountant and financial expert and reorganization of 
the Association grouping the members of this profession.  Any external accountancy-related service may be exercised only by 
professionals listed in Register A of the Association of Accountants and 
Financial Experts. Professionals who meet the required conditions but may not be included in the members' Register because they are employees are listed in an attachment entitled Register B. Honorary accountants and financial experts appear in Register C. (Number of 
accountants and financial experts listed in Register A in 2014: 123; in 
R e g i s t e r  B :  2 2 ;  a n d  i n  R e g i s t e r  C :  0 ) .  E x e r c i s e  o f  t h e  p r o f e s s i o n  o f  accountant or auditor is exclusively reserved to persons of Malagasy nationality or foreigners residing in Madagascar and listed in Register A 
of the Association.  
Engineer 
Madagascar Association of Engineers 
http://www.ingenieurmadagascar.org/oim 
Law No. 95-024 of 6/09/1995 on organization of the 
profession of engineer and creation of the 
Madagascar Association of Engineers (OIM). 
Decree No. 96-1023 of 8/10/1996 determining the 
Code of Ethics for Malagasy engineers. 
Decree No. 96-1024 of 8/10/1996 determining the 
number, eligibility criteria and methods for electing 
the OIM National Council, pursuant to Law 
No. 95-024 of 6/09/1995. n.a. 
Solicitor 
National Chamber of Solicitors 
 Law No. 2007-026 of 12/12/2007 containing the 
Statutes for the profession of solicitor in Madagascar (O.J. No. 3 181 of 14/04/08, p. 3492)  Must be of Malagasy nationality or a national of a State granting 
reciprocity to Malagasy nationals. The status of solicitor is conferred by 
a decree adopted in the Government Council.  
Lawyer 
Malagasy Bar Association 
http://barreaudemadagascar.org 
 Law No. 2001-006 of 9/04/2003 organizing the 
profession of lawyer (O.J. No. 2849 du 11/08/2003, 
p. 2112)  Mandatory registration in the Association's Register. Certificate of 
completion of three years' training required. Must have held Malagasy 
citizenship for more than five years). A lawyer registered with a foreign 
bar having a reciprocity agreement may only represent the parties and 
plead subject to an authorization from the Minister of Justice. He/she 
does not require such an authorization if he/she pleads together with a 
lawyer from the Madagascar bar.  
Bailif f 
Law No. 2005-034 containing the Statutes for bailiffs and auctioneers  One of the eligibility criteria is Malagasy citizenship at the time of the 
competition.  
Veterinary surgeon n.a. 
Physician/Acupuncturist/Odontologist- 
stomatologist National Medical Association Register of the Association of Odontologists-Stomatologists 
 Law No. 2011-002 containing the Health Code  Malagasy nationality required. 
 
Dental surgeon 
http://www.univ-mahajanga.mg n.a. 
Nurses and midwives 
Union of nurses and midwives  Registration with the Union authorizes the profession. Only Malagasy 
nationals may belong to the Union. There is no long-term exercise of 
the profession by foreigners, although this does occur in connection with missions or projects.  
Pharmacist 
National Association of Pharmacists  Registration with the Association authorizes the profession. Only 
Malagasy nationals or citizens of countries with a reciprocity agreement 
with Madagascar may belong to the Association. Currently, there is no 
formal agreement in this area.  WT/TPR/S/318 • Madagascar 
 
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  Activity/Law 
(National association) Market access  
Architect 
Association of Malagasy Architects Ordinance No. 93-018 of 25/04/1993 http://www.oam-madagascar.com Exercise of the profession of ar chitect requires listing in the 
Association's Register. Any architect exercising outside Madagascar must be associated with a Malagasy architect listed in the Association's Register if he/she is involved in a local project.  
n.a. Not available. 
Source: WTO Secretariat, on the basis of information provided by the Malagasy authorities. 
4.195.  In 2008, Madagascar was the subject of a Report on the Observance of Standards and 
Codes (ROSC) of the World Bank, focusing on accounting and auditing services. This analysis of 
compliance with international accounting standards evaluates the robustness of accounting 
infrastructure, the quality of which, in turn, has an impact on foreign direct investment and hence the country's economic performance.
116 The Malagasy authorities subsequently reviewed the 
implementation of the Madagascar ROSC project. A plan of action was drawn up in 
December 2010, with the following  specific objectives, but was not carried out owing to lack of 
financing: regular updating of the country's accounting standards in line with international accounting standards; adoption of the International Standards on Auditing (ISA) as national 
standards and updating of the latter on a regular basis; building up the capacity of the National 
Accountancy Council (CSC), the Association of Malagasy Accountants and Financial Experts 
(OECFM) and accountancy training institutions; an d adoption of the standards by professional 
accountants and company directors. 
                                               
116 World Bank (2008). WT/TPR/S/318 • Madagascar 
 
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French Development Agency (AFD) (2007), La Concession des aéroports de Madagascar , 
Document de travail No. 43. Viewed at: http://www.afd.fr/webdav/site/afd /shared/PUBLICATIONS/RECHERC HE/Scientifiques/Documents-
de-travail/043-document-travail.pdf . 
African Development Bank (AfDB) (2004), Madagascar – Projet de renforcement institutionnel 
visant la bonne gouvernance (PRIBG) . Viewed at: http://www.afdb.org . 
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