In Madagascar, Covid-19 has threatened its poverty reduction efforts; it has led to job losses, income losses and low growth. Owing to lower demands from Covid-19 restrictions, income generation capacities of government, firms and individuals have been reduced. The agriculture sector has experienced 44.7% income loss; household’s income has declined by 67.2% and tax revenues have decreased by 30%. Other sectors of the economy such as the tourism industry were gravely affected with 100% decrease in activities.
Additionally, the employment sector of Madagascar, has witnessed about 40% of enterprises and 36% of salaried jobs being negatively affected from the Covid-19 outbreak. These developments have also accounted for the sharp downward projection of Madagascar’s economic growth from 5.8% to 0.8%.
Nevertheless, the government of Madagascar has put in place some measures to curb the effects of Covid-19 on its economy. It has provided subsidized loans to SMEs, $245 million support for the private sector and an interest free loan system for salaried workers. However, to further bolster post pandemic recovery, it is recommended that; economic recovery plans include climate resilience, sustainable local food production and informal sector tailored financial support programme. In addition, the private sector recommends that, the government creates the space for private public stakeholder consultations, wide access to financial assistance and subsidized bank loans.
Though Covil-19 has bedeviled economic growth in Madagascar, it has also provided opportunities in theinformation technology sector and the agro-industry. More specifically, sectors in the production of protective equipment, medicines and essential oils have benefitted from rising demands for their products.