07.10.2020

Online Country Talk: Madagascar

On October 7th, the Economic Policy Competence Center (EPCC), operating from FES Ghana, organized its 4th online Country Talk to discuss the effects of Covid-19 on employment and economic growth in Africa. The focus of the 4th seminar was on Madagascar while the previous ones were on Ghana, Ethiopia and Rwanda.

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.

Friedrich-Ebert-Stiftung
Ghana Office

Postal address
Friedrich-Ebert-Stiftung
Ghana Office
P.O. Box 9722, KIA
Accra
Ghana

Location
Ring Road East 869/2,
150 m off Danquah Circle

+233 (0)303 93 34 96
+233 (0)303 93 34 97
+233 (0)302 77 29 90
office(at)fesghana.org

Team & Contact

back to top