With a GDP of 16.3 billion dollars and the 173rd largest economy in the world out of 191 countries, Madagascar is a country on the move. The Big Island, the 5th largest island in the world, is a major economic hub in the Indian Ocean. Its GDP is growing, as is the total number of its working population, and Madagascar is enjoying success in the fields of culture, economics and manufacturing.

In this article, we take a look at the sectors that are growing in Madagascar, and at the economic pillars of the island.

Mining :

The leading sector in terms of foreign investment, mining is an important industry on the island. Working the soil, extracting minerals and selling them are common activities that create jobs on the island: 40% of the island’s exports come from working the soil.

The companies operating in Madagascar are Canadian giant Rio Tinto, Sumitomo from Japan, Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) from South Korea, and Bolloré Africa Logistics from France.

The minerals mined in Madagascar include cobalt, iron, nickel, gold, chromium, sapphire and ruby.

These metals are used in the transport industry, jewellery and construction.

In Madagascar, the extraction of minerals from the ground is placed under the authority of the Ministry of Mines. A mining permit is required to extract minerals in industrial quantities.

Drilling sites are generally employment areas employing companies and workers from all sectors of the Malagasy economy. These include transport companies, catering companies and service companies. For local residents, all kinds of jobs are in demand, including engineers, translators, designers and farm workers.

In 2024, the government launched a project to build a gold refinery. The project is in cooperation with the United Arab Emirates, with a view to producing 15 tonnes of gold ingots a year.

Madagascar is a major exporter of gold, a resource that the country exports en masse around the world.

Tourism sector :

Madagascar’s second-largest economic sector, with a net income of 90 million euros per year, tourism is an industry that employs the most people on the island. Madagascar is expected to welcome 1 billion tourists between 2020 and 2025, making it a major tourist destination on the African continent. Madagascar is home to fauna and flora endemic to the island, making it unique among other tourist destinations.

Tourism is a booming business on the island, and there are many language teaching establishments: ELF for French, ELC for English, Espresso for Italian, and Chinese language courses for Mandarin and Cantonese.

The island’s capital also boasts a number of hotel schools, including the prestigious Vatel higher education establishment. The tourism sector recruits and trains many young people on the island.

What’s more, the sector continues to attract many young people from outside the island, as many of them go on to study abroad.

Services :

Telecommunications

Madagascar is a connected island, with 3G, 4G and 5G networks, and 85% of the island is covered by the telephone network. Telecommunications services are booming, generating around €1.5 billion in revenue a year. The island has three telephone operators and several thousand telephone retailers.

The sector is healthy, users are regulars, and the handset market is rapidly renewing itself.

Outsourcing

Service outsourcing is the second pillar of the Malagasy economy in terms of services. Madagascar is a host country for many outsourced services. This is because the country has an abundance of inexpensive, skilled labour in tertiary services: accounting management services, IT development services, business development services – all services that are outsourced to Madagascar.

Service outsourcing is generally carried out by French-speaking companies, especially French SMEs and medium-sized companies.

Services outsourced by Anglo-Saxon companies are also present on the island, mainly in the field of new technologies.

Free zone :

To obtain a free zone in Madagascar, an application to operate in a free zone must be sent to the EDBM, together with a file containing duly completed forms drawn up by the EDBM.

Free zones are granted to legal entities that meet tax, legal, customs, environmental and social conditions. They are available for manufacturing, sewing, pharmaceutical, building materials and other activities.

Free zones are generally tax-free for the first 15 years of operation, after which they are subject to specific conditions imposed by the applicant.

Agriculture :

The last pillar of the economy in Madagascar, agriculture is an area of activity that concerns the people: the activity is carried out by nearly 80% of the population on a subsistence basis. The seeds grown are maize, soya beans, rice, manioc, vegetables and fruit.

The crops are grown in the traditional way, and keep both young and old busy. In the countryside, where cereal crops are grown, the know-how is passed on orally within the locality.

Nearly 3,241,230 tonnes of rice are produced annually in Madagascar, accounting for almost one tenth of the country’s rice consumption. Maize is produced to the tune of 260,494 tonnes a year.

When not destined for household consumption, Madagascar’s agricultural produce is used to feed horses, oxen, cows, goats, sheep and pigs.

Agriculture is the default activity of every peasant in Madagascar.