IV.

Economy

Madagascar is one of the world’s poorest countries, with a gross domestic product (GDP) of $5 billion, or $270.90 per person, in 2005. The economy remains, as in colonial times, predominantly agricultural, with 78 percent of the labor force engaged in agricultural activities. During the 1980s and late 1990s the agricultural sector was hurt by frequent cyclones. Strikes and political instability also limited economic growth in the 1990s and early 21st century. The government’s budget in 2004 included revenues of $2,637 million and expenditures of $2,749 million.

A.

Agriculture

Because of the mountainous terrain, only 5 percent of Madagascar is farmed. The chief food crop is rice, which is grown on about one-half of the agricultural land. Since the early 1970s imports of this staple food have been necessary to meet needs. Other important food crops are cassava, sweet potatoes, corn, beans, and bananas. Leading cash crops are coffee, vanilla, and cloves. Other important crops are sugarcane, cotton, sisal, and tropical fruits. Cattle are the main livestock raised in Madagascar.

B.

Forestry and Fishing

In 2005 some 11.2 million cu m (397 million cu ft) of timber was cut, most of it for local use as fuel. Efforts are under way to increase wood supplies by reforesting eroded upland areas. The fishing industry is expanding, and shrimp, lobsters, and fish products have become significant sources of export revenue. Madagascar allows other countries to fish in its exclusive maritime zone in exchange for compensation.

C.

Mining and Manufacturing

Mineral products of Madagascar include chromite, mica, graphite, salt, and various gemstones. Food processing (meat packing, brewing, and sugar refining) is the leading manufacturing industry. Other manufactures include refined petroleum, textiles, soap, cement, cigarettes, and paper.

D.

Energy

Madagascar’s people rely on traditional fuels such as wood and charcoal for 84 percent (1997) of their energy needs. In 2003 Madagascar produced 825 million kilowatt-hours of electricity. Some 66 percent of all electricity is produced in hydroelectric facilities.

E.

Foreign Trade

Madagascar usually has a negative trade balance. In 2003 imports were valued at $1,091 million and exports at $766 million. Foods such as coffee, cloves, vanilla, fruit, and shrimp accounted for 55 percent of export revenue in 2003. Other important exports were fabrics, gemstones, chromite, and refined petroleum. Leading imports were petroleum, foodstuffs, chemical products, machinery, vehicles and vehicle parts, and electrical equipment. France is by far the leading trading partner, accounting for about one-quarter of Madagascar’s trading activity. Other significant purchasers of the country’s exports are the United States, Singapore, Germany, and Mauritius; chief sources of imports in addition to France are the United Arab Emirates, Bahrain, China, and South Africa.

F.

Currency and Banking

The Malagasy franc, divided into 100 centimes, is the currency unit (2,003 Malagasy francs equal U.S.$1; 2005 average). The Central Bank of Madagascar (founded 1973) is the bank of issue. All banks were nationalized in 1975 but reopened to private and foreign investment beginning in the late 1980s.

G.

Transportation

Antananarivo is the main hub of Madagascar’s limited transportation system. Only about 12 percent (1999) of the country’s roads are paved. Toamasina, the chief port, handles about 70 percent of the nation’s foreign trade. Other port cities are Mahajanga, Toliara, and Antsiraana. Madagascar has four major airports, including the international airport at Antananarivo. Air Madagascar is the national airline.

H.

Communications

Until 1990 the state owned all broadcasting operations in Madagascar. That year the state monopoly was abolished by legislation that opened the industry to private stations working in partnership with the government. State restrictions on publishing were also lifted in the early 1990s. The daily newspapers published in Antananarivo include Gazetiko (written in Malagasy), La Gazette de la Grande Ile (French), and Midi Madagasikara (French and Malagasy).