Madagascar

Madagascar is a beneficiary of the EU's "Everything but Arms" (EBA) scheme for least developed countries. Madagascar is considered a low-income economy by the World Bank with a per-capita income of $ 510 in 2022. Overall EU imports from Madagascar amounted to € 1 billion in 2022. Despite about 77% of these imports are eligible for tariff suspensions under the EBA, only 15% make use of the preferential access to the EU market.

What is the EBA?

The “Everything but Arms”(EBA) scheme is a permanent arrangement covering Least Developed Countries (LDC’s) as classified by the United Nations. This arrangement enables duty-free and quota-free access for all products (7200 products in total) originating in LDC’s except for arms and ammunition. Different from the Standard GSP and GSP+, LDC’s are not excluded from the scheme if they benefit from other preferential arrangements.

Madagascar flag

At a glance: EBA beneficiaries' preferential imports to the EU

group

29,61 M

Population

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Semi-Presidential Republic

Government

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3.80%

GDP Growth

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8.80%

Inflation

money

$ 15,30 B

GDP

58 v

Freedomhouse index

3 -

ITUC Global Rights Index

28 ^

Environmental Performance Index

Facts about Madagascar's economy

Strategic Location

Madagascar is an island economy located off the South-Eastern coast of the African continent. It is strategically well located along the Mozambique Channel, which still plays an important role for big commercial vessels (e.g. oil tankers) unable to navigate through the Strait of Hormuz.

Export Products

Madagascar's most important export products are vanilla, nickel, frozen shrimp, apparel, and clothing (jerseys and pullovers made of wool and cashmere in particular), as well as metals such as cobalt, gold and titanium.

Trade Partners

With about 37%, China and the EU account for the largest share of Madagascar's overall trade. The EU is the most important export market. Regional trade, for example with South Africa, plays a subordinate role.

Economic Structure

Madagascar's economy is largely dependent on agriculture and its natural resource wealth. The country is known for its high-quality vanilla but also cultivates rice, bananas, sugarcane and other fruits and vegetables. In recent years, the fisheries sector expanded significantly, benefitting from the richness in fish in the surrounding waters. Furthermore, the country has a number of mineral deposits including titanium, nickel and cobalt. The industrial sector focusses on textiles and footwear, pulp and paper, wood, and fertilizers.

Vanilla Production

Madagascar is the world’s largest producer of natural vanilla and produces about 60% of the global vanilla supply.

Trade with the EU

Total trade with the EU summed up to €1,916 million in 2022. The EU is Madagascar's most important trading partner and accounts for a share of 18.2% of overall trade.

Madagascar and the EU (2022)

Imports from Madagascar by product section

Imports from Madagascar over time (in € m)

MADAGASCAR AND THE EU’s GSP

Economic Impact

77%

The large majority of Madagascar's exports to the European market are eligible for EBA preferences.

15.00%

Madagascar currently has a low preference utilisation rate of 15%.

Preference utilisation and export diversification

Madagascar's imports to the EU

Preference Utilisation vs. total eligible imports

While overall EU imports from Madagascar have increased in recent years, the EBA only plays a subordinate role for Madagascar as it benefits from an Economic Partnership Agreement with the EU. Nonetheless, Madagascar takes advantage of the EBA for its exports of spices and garments.

The largest product sections under EBA

Madagascar’s economy is comparatively well-diversified, despite the low usage of EBA preferences. The country is among the beneficiaries which traded the largest number of tariff lines following the update of the GSP regulation in 2014. The graph visualises the considerable difference between eligible exports and those that made use of EBA preferences.

SUSTAINABLE DEVELOPMENT

The preferential access to the EU market granted by the EBA scheme is not bound to the ratification of international conventions. Madagascar maintains a very high level of ratification of international conventions. It has ratified 14 out of 15 core international conventions on human rights and labour standards. Furthermore, Madagascar has ratified 8 conventions on environmental protection and 4 conventions on good governance.

Core international conventions on human rights and labour standards

Ratified

  • International Convention on the Elimination of All Forms of Racial Discrimination (1969)
  • International Covenant on Civil and Political Rights (1976)
  • International Covenant on Economic Social and Cultural Rights (1976)
  • Convention on the Elimination of All Forms of Discrimination Against Women (1981)
  • Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
  • Convention on the Rights of the Child (1990)
  • Convention concerning Forced or Compulsory Labour, No 29 (1930)
  • Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)
  • Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)
  • Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
  • Convention concerning the Abolition of Forced Labour, No 105 (1957)
  • Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
  • Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
  • Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)

Not Ratified

  • Convention on the Prevention and Punishment of the Crime of Genocide (1948)

Additional Conventions

  • Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
  • Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
  • Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
  • Convention on Biological Diversity (1992)
  • The United Nations Framework Convention on Climate Change (1992)
  • Cartagena Protocol on Biosafety (2000)
  • Stockholm Convention on persistent Organic Pollutants (2001)
  • Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
  • United Nations Single Convention on Narcotic Drugs (1961)
  • United Nations Convention on Psychotropic Substances (1971)
  • United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
  • United Nations Convention against Corruption (2004)

EU-Madagascar Bilateral Development Assistance

DG INTPA

Access all info about EU-Madagascar relations on the International Partnerships website: https://international-partnerships.ec.europa.eu/countries/madagascar_en

Opportunities in Madagascar

  • Current investments in infrastructure, focussing on port, airport, roads, energy projects
  • Dynamic development of the services sector with further opportunities particularly with regards to telecommunications, banks, and insurance
  • Further potential in the agricultural sector and processing plants

Contact points