Madagascar

Madagascar, the world’s fifth-largest island, lies in the Indian Ocean off the coast of southern Africa. Its population, estimated at 31.9 million in 2024, faces persistently high poverty.

Read More

Read Less

Madagascar preserved macroeconomic stability but long-standing challenges persist. Economic growth has averaged about 3% annually since the 2010s - insufficient to generate jobs or significantly reduce poverty in a context of rapid population growth of 2.4% annually. Growth is estimated at 3% in 2025, driven by manufacturing and services, particularly tourism, telecommunications, trade, and banking. On the demand side, private investment and consumption remained key drivers. Inflation averaged 8% year‑on‑year, driven by high food and import prices, prompting the central bank to raise its policy rate to 12% in May 2025. The current account deficit widened to 6.6% of GDP due to a larger trade deficit. Lower prices for key cash crops and nickel reduced export earnings, partly offset by strong exports of garments, essential oils, and food products, while imports increased. Looking ahead, growth is expected to be supported by post-cyclone reconstruction and increased infrastructure investment. However, subdued job creation, high poverty (estimated at 66.5% in 2025), and vulnerability to climate and global economic shocks, highlight the urgency of sustained reforms.

Read More

Read Less

Madagascar continues to face deep structural challenges that hinder its development. Growth remains limited by the predominance of low-productivity sectors such as subsistence agriculture, along with weak infrastructure, recurrent natural disasters (cyclones, droughts), limited access to basic services, and rising climate vulnerability, leaving it insufficient to generate the jobs needed for a rapidly growing population. Human capital accumulation is also low, with a Human Capital Index of 0.39, among the lowest globally.

Extreme poverty continues to affect a large share of the population, placing Madagascar among the world’s most vulnerable economies. Rural poverty remains a serious challenge, and urban areas have experienced a significant deterioration in living standards over the past decade. While inequality declined slightly, from a Gini coefficient of 38.2 in 2012 to 36.8 in 2022, this was driven largely by rising urban poverty rather than broad-based welfare gains.

Boosting resilient growth will require bold reforms to improve governance, build resilience to shocks including climate risks, expand access to basic infrastructure, notably energy, transport, and digital infrastructure. Breaking the cycle of poverty further calls for urgent reforms to create better-paying jobs by raising agricultural productivity, strengthening market linkages, and enhancing competition in key export value chains while simultaneously investing in human capital.

Read More

Read Less

The Country Partnership Framework (CPF) for Madagascar for 2023 to 2027 sets out the World Bank Group’s strategy to support inclusive and resilient growth, focuses on expanding job opportunities, improving equity in public services, and strengthening resilience to shocks. Following recent political change, the WBG has developed a two-year Engagement Note to support the new government's priorities: improving basic services, strengthening governance, and preparing for elections. During this period, support will focus on enhancing infrastructure, strengthening the business and regulatory environment, and mobilizing the private sector to create jobs in key sectors. This renewed partnership is anchored in a mutual accountability compact with the authorities, aiming to help Madagascar move away from a low-growth, high-poverty trap toward more and better jobs and a more resilient economy.

As of February 2025, the World Bank portfolio totaled $3.5 billion, comprising 17 national projects and 5 regional operations. The infrastructure sector accounts for the largest share at 43% ($1.5 billion), followed by sustainable development at 25% ($875 million), human development at 20% ($703 million), and equitable growth, finance, and institutions at 12% ($405 million).

Partners

The World Bank works closely with the following partners in Madagascar: the African Development Bank, Agence Française de Développement (AFD), the Food and Agriculture Organization (FAO), UNICEF, UNOPS, UNDP, World Food Programme, the International Potato Centre, AfricaRice, International Livestock Research Institute, International Crops Research Institute for the Semi-Arid Tropics, United States Agency for International Development (USAID), the World Health Organization, the GAVI Alliance, Power of Nutrition, the German International Cooperation Agency (GIZ), Japan’s International Cooperation Agency (JICA), Catholic Relief Services (CRS), Fondation Tany Meva and the European Union.

Read More

Read Less

The World Bank is expanding energy access in Madagascar through a mix of grid and off‑grid solutions. More than 500,000 households have gained access to electricity. Investments extended 1,500 km of power lines and electrified 500 health centers. Support to the private sector accelerated off‑grid solutions in remote areas. New initiatives are scaling up private sector-led energy access and deploying multifunctional solar platforms to support rapid rural transformation in targeted communes in southern Madagascar.

The World Bank is improving access to water nationwide. In Antananarivo, upgrades to key facilities are increasing daily water supply by over 40,000 m3, improving service reliability and reducing service interruptions. In Southern Madagascar, a rehabilitated pipeline provides clean drinking water to 50,000 people, and a partnership with UNICEF is upgrading 320 community water points.

The World Bank has catalyzed private sector development in the tourism, agribusiness and digital sectors across nine regions. Since 2022, it has mobilized $70 million in investment and facilitated the creation of 16,000 jobs. 130 SMEs received support, and 22,000 producers improved their productivity and access to markets, boosting smallholder incomes by 35%. In tourism, projects upgraded 10 sites, rehabilitated 124 km of access roads and trained 20,000 workers.

The World Bank is strengthening Madagascar’s national statistical system to support evidence‑based policymaking by modernizing the Institute of National Statistics and key sector ministries, including through improved data collection such as economic censuses and household surveys.

Following cyclones Gezani and Fytia in February 2026, $37 million was mobilized for emergency response. More than 52,000 households received cash assistance, over 83,000 participated in cash‑for‑work activities, and support was provided to sustain education, health, water and electricity. Recovery and reconstruction efforts are ongoing across sectors.

Read More

Read Less