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Light Industries: Madagascar, land of transformation:

Light Industries: Madagascar, land of transformation:

Madagascar has currently a low level of industrialization. Indeed, compared to primary (28.8% of GDP) and tertiary (54.6% of GDP) sectors, the industrial sector contributes very little (16.6%) to the GDP.

This low industrialization shows an untapped market considering Madagascar’s assets for light industries development:

  • A significant supply basis in terms of local resources for developing word-class mill and weaving operations, plant fiber-based products or other processed products of plant and/or animal origin, …;
  • A competitive labor cost, for example: 0.40 USD/h for textile industry;
  • A recognized ability: a highly qualified manpower which is renowned to be exceptionally skilled and profitable;
  • An interesting geographical position near other business platforms in Mauritius and in South Africa, which eases the access to expertise, input and logistical preparations;
  • Port infrastructures (Toamasina, Ehoala Port, …) and airports (Antananarivo, Nosy Be, Taolagnaro, …) easing the shipping;
  • Preferential regional and international market access (COMESA,IOC, EBA/EPA, …);
  • A pool of potential partners such as private sector representatives in professional groupings and associations (GEM, SIM, GEFP, FIVMPAMA, FCCIM, CCIFM, …);
  • An incentive scheme of free zones and free companies exempted from customs duties and taxes.

Companies under the scheme of free zones and free companies prevail widely in the Malagasy industrial sector. A special incentive scheme intended for activities which are focused on exports such as textile, agribusiness and ICT businesses has been added. More than 1/3 of the jobs in industrial sector belong to free trade companies.

Although the market is highly focused on export, the local market is developing with the emergence of a middle class and with the implementation of important mining projects (Ambatovy, QMM …).

Legal framework

Loi N°2007-036 du 14 janvier 2008 sur les investissements à Madagascar
Loi N°2007-037 du 14 janvier 2008 sur les Zones et Entreprises Franches à Madagascar