Madagascar is a member of the Southern African Development Community (SADC), COMESA (Common Market for Eastern and Southern Africa) and IOC (Indian Ocean Commission), regional free trade organizations totaling more than 600 million potential consumers. Investing in Madagascar will give investors access - in addition to the competitive advantages of the country - to these high-potential free trade zones. In July, Madagascar signed the Tripartite Free Trade Agreement (TFTA), which combines SADC, COMESA, and the East African Community (EAC), which included 57% of the total African population.
The eligibility of Madagascar to the African Growth and Opportunities Act (AGOA) with the United States and the signing of the EPA (Economic Partnership Agreement) with the European Union allow companies in the country to export to these markets without customs duties. This is reflected in a strong trade dynamic between Madagascar and the two countries, with Madagascar exports to the United States rising 12.8% in 2016 and to the European Union 44.6% in 2016.
Through a bold sectoral strategy geared towards promoting sectors with strong comparative advantages, Madagascar offers a range of opportunities in tourism, agribusiness, mining, textiles, ICT, renewable energy, infrastructure.
Madagascar has many competitive advantages, including labor costs (US $ 50/month), the cost of electricity (US $ 0.167/kWh in 2016) and water (US $ 0.30/m3 in 2016). For industrial use, lease price for industrial sites (US $ 2.00/m²/ month), availability of "natural" materials and inputs at low cost, ease of exploitation of resources (eg.: open pit mines, natural conditions for agriculture and infrastructure), etc. Also, investors can take advantage of the value of the Internet connection, which ranks second in terms of speed in Africa.
Madagascar is implementing significant legal, procedural and administrative reforms aimed at facilitating business practices and encouraging local and foreign investment. By 2016, more than 20 reforms have been implemented in the areas of business law, trade justice, import-export, business start-up, facilitation of credit, taxation, etc. Various laws favoring investments have been promulgated, in particular the Law on Free Zones and Companies, which allows freehold companies to benefit from exemptions from customs duties and VAT on imports; and Income Taxes for the first 15 years.
Beyond the achievements of its own, the Malagasy Government relies on Public-Private Partnerships. Several ambitious infrastructure projects are being implemented in the telecommunications sector, with the installation of more than 12,000 km of fiber optic network over 14,000 km of radiorelay networks. The energy sector includes several projects for the construction of hydroelectric power plants, including Volobe's $ 500 million, generating 110 MW. The next stage of the creation of Special Economic Zones, one dedicated specifically to the textile industry (an integrated industrial zone of + 100ha) will favor the construction of infrastructures necessary for the emergence of growth poles.
Madagascar is endowed with potential mining, agricultural, energy, fisheries. Particularly dense and varied, which only need to be exploited. The uniqueness and richness of its biodiversity (the biodiversity rate is 90% (# 1 in Africa), and the endemicity rate is the highest in the world) are also an asset for tourism investments.