I made a fresh trip to Madagascar last week, a place where I have been conducting business for a considerable amount of time. To be honest, Madagascar, which never fails to amaze me on each visit, is now actively pursuing development, with Indian-descended traders in the nation beginning to participate in industrial affairs. My initial trip to this country was in 2016, where they relied on imports for all goods, but now they produce almost all commodity products.
Let’s start by addressing the political steadiness in the nation, with Andry Rajoelina serving as the head of state since 2018. As a result of this stability, there is a gradual rise in confidence in the country’s economy. To provide a more explicit illustration, when $1 was worth 4100 Madagascar Ariary in July 2022, it only grew by 10 percent in the 24-month period, reaching 4500 AR. This represents a vital sign of belief in the country’s economic strength, providing assurance to local investors wishing to access foreign currency loans.
The country’s development plan, known as Plan Emergence Madagascar (MEP), aims to transform Madagascar into a strong, united and welfare-oriented emerging nation. Despite ongoing issues with economic stability and democratic progress, Madagascar is working towards enhancing its prosperity.
Within the country, there exists a limited number of individuals of Indian descent, who hold complete control over the financial and commercial operations, with their population not surpassing 17000-18000. To put it briefly, this small group holds significant influence in this nation of 27 million inhabitants. Instead of British-connected Indians in East Africa, this particular minority is made up of individuals with a preference for French customs, many of whom hold French nationality. This explains their deep connection to France.
Nowadays, along with the country’s natural resources, numerous factories have started functioning in Madagascar to fulfill the essential food requirements. The products manufactured consist mainly of flour, pasta & spagetti, biscuits, drinks, baby diapers, cosmetic products and cleaning supplies. Following this industrial expansion, a sugar mill, one more wheat flour mill and margarine production facility will be set up shortly. Madagascar is experiencing a positive outcome as a result of the continuous rivalry among Indian traders, which is diminishing the country’s need for foreign support and opening up opportunities for job creation. To illustrate, within my business circle in Madagascar, consider this scenario: when one person opens a flour factory, other Indian traders may also decide to invest in or express interest in the same industry. The scenario in Madagascar is reminiscent of the friendly rivalry among Eritrean merchants in Angola, enhancing market dynamics. In the past, Madagascar was recognised solely for importing vanilla, cloves, fish, spices, and limited minerals, but it has shifted to exporting various industrial goods to nearby nations.
Not only the capital Antanarivo, but also Tamatave and other major cities like Morandava and Antsirabe are witnessing a rise in industrial investments. The investment initiative in the country reached beyond a single city to include other regions. The tourism development in the northern Nosy Be region of the country has significantly revitalised the Indian Ocean geography.
On the flip side, it is highly likely to observe an increase in Chinese influence in Madagascar, as well as throughout Africa. Chinese companies are notably strong in the construction, construction machinery, and automotive industries, and they also have a significant presence in the electronic products market within the country.
When it comes to supermarkets, fast-moving consumer goods, and B2C products, Madagascar surpasses other African nations in development. Many French products have made their way into the market as a result of the growing number of French supermarket chains in recent years. Unlike in a regular African country where Turkish, Indian, Dutch, and Belgian food products are common, the Madagascar market is clearly filled with French products on supermarket shelves.
In summary, the developments in Madagascar are proving to be even more surprising than expected. Madagascar seems to have a bright future in the medium term, with strong support from Indian-origin entrepreneurs.
