The country of Madagascar is often unmentioned in conversations revolving around the
global economy. The country is rarely in the news nor is it ever the topic of conversation,
but maybe it should be. This country is one with an attention-grabbing economy, and not
for a positive reason. From research, one can see that this country is struggling and has
been unable to relieve themselves from great difficulties for quite some time.
Madagascar has been battling poverty for many years now as it is one of the world’s
poorest countries. The country continues to face many corruptions involving, but not
limited to, the judiciary system, the police, taxation, customs, land, trade, mining, industry,
environment, education, and health. With such a large number of challenges standing
between the country and its escape from poverty, Madagascar’s economy is paying the
price.
Macroeconomic Description
Madagascar’s GDP has displayed an increasing trend which may be due to the
governmental objective to “fight poverty through inclusive growth” (The World Bank,
2016). Despite these efforts, and although the GDP for the country has increased
significantly within the past ten years, it is still rather low and just dropped in 2015.
According to The World Bank, Madagascar’s GDP for 2015 was $9.739 billion, a decline
of about $935,000,000 from the previous year. (The World Bank, 2016)
Accounting for Madagascar’s GDP in terms of composition by end use, household
consumption makes up 82.5%. The government consumption of the country contributes to
13.3% of the GDP. Related to the government of Madagascar, in 2015, the government had
revenues of $1.149 billion but had expenditures of $1.654 billion and the budget deficit
during this time was -5.2% of GDP (Central Intelligence Agency, 2016). Also in 2015, the
International Monetary Fund (IMF) approved a Rapid Credit Facility worth around $42.1
million to help Madagascar’s government meet their balance of payments. At the end of
2015, the account balance of the country was -$211 million.(Central Intelligence Agency,
2016)
Another component of Madagascar’s GDP was their investment in fixed capital accounts
at 15.8% of GDP, but investment in inventories did not account for any part of GDP.
Additionally, exports of goods and services contributes to 31.5% of the GDP. In 2015,
Madagascar’s net exports were valued at $2.238 billion (Central Intelligence Agency,
2016). The exported commodities of the country include coffee, vanilla, shellfish, sugar,
cotton cloth, clothing, chromite, and petroleum products. (Central Intelligence Agency,
2016)The country distributes 15.2% of exports to France, 12.7% to the U.S., 7.1% to
