Madagascar is on the move again. Fair and transparent presidential elections have paved the way for political stability and reawakening the economy. Investors are taking note.
“Opportunities exist in all sectors serving the local economy and among exporters,” said Satyam Ramnauth, IFC Country Manager for Madagascar. “IFC is looking at increasing its portfolio to support a vibrant private sector.”
Economic growth, which dropped to as low as 1.0 percent in 2011, has been steadily rising and is expected to jump from 3.0 percent in 2014 to 3.6 percent this year, according the Global Economic Prospects.
IFC has a strong and resilient financial sector portfolio in Madagascar, including a $25 million trade finance facility with Bank of Africa Madagascar launched last year, along with an important minority stake in the bank. IFC seeks to further facilitate access to finance, especially through telecom infrastructure, technology and mobile banking. IFC will also broaden out its investments into other areas which will help improve lives and living standards in Madagascar.
“Agriculture is a critical component of the economy and IFC believes it can leverage its knowledge across the World Bank Group to invest along with credible private sector players,” said Ramnauth. “Infrastructure investment, especially in renewable and low-cost power, is being crafted in coordination with the World Bank. Our strategy extends to telecom ventures, investments related to climate change, and other projects that have significant positive impact on Madagascar’s economy.”
That strategy is helping IFC build a strong pipeline of investments that is leading to new investments. Investor prospects are further buoyed by the increasing consensus that the government and development partners can’t do it all. The private sector is being called upon to invest in assets that will create a momentum for growth and efficient resource allocation. To bolster Madagascar’s growing private sector, the World Bank Group will work closely with the government to improve the country’s investment climate through a revitalized program that begins in 2015.
“Madagascar is blessed as it has an abundance of natural and physical resources that can put the country on the path of sustainable development,” notes Ramnauth, “To leverage these, a serious commitment to infrastructure development and human development is critical. Combined with political and economic stability, which is a result of agreement between Madagascar’s key stakeholders, we expect to see significant business opportunities ahead. If sustained, these opportunities will lead to more jobs, reduced poverty, and sharing of prosperity.”