by Chengetai Madziwa – SANF 05 no 73
The approval of Madagascar as the Southern African Development Community’s (SADC) newest member demonstrates the deepening of regional integration especially given the huge market potential of the Island.
Heads of state and government admitted Madagascar as a member state during the SADC summit held in Gaborone from 17 to 18 August. This brings the SADC membership to 14 countries.
“It shows that the bloc is improving its economic strength. Madagascar is coming with a huge market potential. The advantages are enormous,” said out going Executive Secretary of SADC, Prega Ramsamy at the summit in Gaborone.
The predominantly agricultural economy of Madagascar is expected to contribute to the region’s overall agricultural output as well as create a market for its products and those from other SADC member states.
The Island’s main agricultural products include coffee, cassava, bananas, maize, sugarcane, vanilla, potatoes and rice.
Madagascar’s mining, oil refinery and tourism industry, the country’s other major industries apart from agriculture, also hold great potential for opening up of trade and business opportunities in the region.
If effectively tapped, economic activity between Madagascar and other SADC member states will contribute to intra-regional trade, which is expected to increase from the current level of 25 percent to between 35 and 60 percent by 2008. Madagascar’s main exports are cloves, coffee, fish, meat, petroleum products, sugar, and vanilla.
The Island’s growing economy expects its unexploited mineral reserves to increase mineral exports from about US$100 million to US$150 million per year over the next ten years. The mining sector currently provides stable employment to at least 100,000 people in the rural areas as well as an additional 500,000 seasonal jobs annually.
Although the country has experienced decades of declining gross domestic product, Madagascar has gradually reformed its economy, particularly under President Marc Ravlomanana.
The economy is expected to grow by over four percent this year as a result of forecast increases in agricultural production and higher investment in both tourism and infrastructure.
Although the country has experienced a slow down in growth due to reductions in vanilla prices on the world market and uncertainty over export earnings from the textile industry after the removal of the Multi-Fibre Arrangement (MFA), which guaranteed textile exports to developed countries, the Island’s economy is expected to pick up momentum as it recovers from these shocks.
According to an economic assessment of the country carried out in July, the country’s mining and tourism sectors will likely create employment in the coming years.
Such trends in economic development are likely, in the long term, to improve the human development indicators for the country which has a population of close to 17 million people.
According to 2002 national figures life expectancy in Madagascar is estimated at 53.6 years and literacy rates are estimated at 67 percent. The country’s HIV and AIDS prevalence rate of almost two percent is one of the lowest in the region.
Madagascar, which was granted a candidate membership status last year in August has been assessed over the past year to determine whether it qualified for membership.
Formerly an independent kingdom, Madagascar became a French colony in 1886, but regained its independence in 1960. Headed by President Marc Ravalomanana since 6 May 2002, it is located on the east coast of southern Africa. The official languages are French and Malagasy, while its capital city is Antananarivo. (SARDC)
