TRADE POLICY REVIEW

REPORT BY THE SECRETARIAT

Madagascar

Revision

This report, prepared for the fourth Trade Policy Review of Madagascar, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Madagascar on its trade policies and practices.

Any technical questions arising from this report may be addressed to Mr Arne Klau (+41 22 739 5706), Mr Pierre Latrille (+41 22 739 5266) or Mr Bouraima Sawadogo (+41 22 739 6868)

Document _WT/TPR/G/466 contains the policy statement submitted by Madagascar.

Note: This report was drafted in French.

CONTENTS

SUMMARY. 8

1   ECONOMIC ENVIRONMENT. 11

1.1   Main features of the economy. 11

1.2   Recent economic developments. 13

1.3   Developments in trade and investment 16

1.3.1   Trends and patterns in merchandise and services trade. 16

1.3.2   Trends and pattens in FDI 19

2   TRADE AND INVESTMENT REGIMES. 21

2.1   General framework. 21

2.2   Trade policy formulation and objectives. 26

2.3   Trade agreements and arrangements. 28

2.3.1   WTO. 28

2.3.2   Regional and preferential agreements. 29

2.3.2.1   Southern African Development Community. 29

2.3.2.2   Common Market for Eastern and Southern Africa (COMESA) 30

2.3.2.3   Tripartite Free Trade Area. 30

2.3.2.4   African Continental Free Trade Area (AfCFTA) 30

2.3.2.5   Madagascar - United Kingdom.. 31

2.3.2.6   Economic Partnership Agreement (EPA) with the European Union. 31

2.3.3   Other trade agreements and arrangements. 31

2.4   Investment regime. 33

2.4.1   Sectoral regimes. 34

2.4.2   Free zones and enterprises (ZEF) 34

2.4.3   Special Economic Zones (SEZ) 34

2.4.4   Business climate. 35

3   TRADE POLICIES AND PRACTICES BY MEASURE. 37

3.1   Measures directly affecting imports. 37

3.1.1   Customs procedures, valuation, and requirements. 37

3.1.1.1   Customs procedures and requirements. 37

3.1.1.2   Customs valuation and inspection. 41

3.1.2   Rules of origin. 42

3.1.3   Tariffs. 42

3.1.3.1   Applied MFN tariff 43

3.1.3.2   Tariff bindings. 50

3.1.3.3   Preferential tariffs. 51

3.1.3.4   Customs duty exemptions or reductions. 51

3.1.4   Other charges affecting imports. 52

3.1.4.1   Tax on intermittent income. 52

3.1.4.2   VAT. 52

3.1.4.3   Excise duty and other levies. 53

3.1.5   Import prohibitions, restrictions, and licensing. 54

3.1.5.1   Import prohibitions. 54

3.1.5.2   Quantitative import restrictions. 55

3.1.5.3   Import licensing and other restrictions. 55

3.1.6   Anti-dumping, countervailing, and safeguard measures. 55

3.2   Measures directly affecting imports. 57

3.2.1   Customs procedures and requirements. 57

3.2.2   Taxes, charges, and levies. 58

3.2.3   Export prohibitions, restrictions, and licensing. 59

3.2.3.1   Export prohibitions. 59

3.2.3.2   Quantitative export restrictions. 59

3.2.3.3   Export licensing and other restrictions. 60

3.2.4   Export support and promotion. 60

3.2.4.1   Export promotion schemes. 60

3.2.4.2   Free zones and enterprises (ZEF) regime. 60

3.2.5   Export finance, insurance, and guarantees. 62

3.3   Measures affecting production and trade. 63

3.3.1   Incentives. 63

3.3.2   Standards and other technical requirements. 63

3.3.2.1   Standards. 63

3.3.2.2   Technical regulations and labelling requirements. 64

3.3.2.3   Conformity assessment, testing and inspection. 64

3.3.2.4   Measures incumbent on the National Environment Board. 64

3.3.2.5   Products regulated by the Madagascar Medicinal Products Agency. 65

3.3.3   Sanitary and phytosanitary requirements. 66

3.3.4   Competition policy and price controls. 71

3.3.5   State trading and state-owned enterprises. 72

3.3.6   Government procurement 73

3.3.7   Intellectual property rights. 76

3.3.7.1   Industrial property. 77

3.3.7.2   Copyright and related rights. 79

3.3.7.3   IPR protection measures. 79

4   TRADE POLICIES BY SECTOR. 80

4.1   Agriculture, forestry, and fisheries. 80

4.1.1   Agriculture. 81

4.1.1.1   Agricultural policy. 81

4.1.1.2   Inputs. 82

4.1.1.3   Trade and tax measures. 83

4.1.1.4   Land reform and investment 83

4.1.1.5   Production and export support 83

4.1.1.6   Policy by subsector 84

4.1.1.6.1   Rice, cassava and maize. 84

4.1.1.6.2   Cloves. 85

4.1.1.6.3   Vanilla. 85

4.1.1.6.4   Seed cotton. 86

4.1.1.6.5   Tobacco. 86

4.1.1.6.6   Cocoa. 86

4.1.1.6.7   Other horticultural products. 86

4.1.1.7   Livestock and animal products. 87

4.1.2   Fisheries and aquaculture. 87

4.1.2.1   Overview. 87

4.1.2.2   Deep‑sea fishing. 89

4.1.2.3   Conservation and sustainable management of fisheries resources. 89

4.1.3   Forestry. 90

4.2   Mining and energy. 91

4.2.1   Mines. 91

4.2.1.1   Overview. 91

4.2.1.2   Solid minerals. 92

4.2.1.3   Upstream hydrocarbons sector 95

4.2.2   Energy. 97

4.2.2.1   Overview. 97

4.2.2.2   Upstream and downstream coal 97

4.2.2.3   Downstream oil 97

4.2.2.4   Downstream gas. 99

4.2.2.5   Electricity. 99

4.2.2.6   Water distribution. 102

4.3   Manufacturing. 102

4.4   Services. 104

4.4.1   Financial services. 104

4.4.1.1   Banking services. 104

4.4.1.2   Microfinance institutions. 106

4.4.1.3   Insurance services. 107

4.4.1.4   Electronic payments. 109

4.4.2   Telecommunications and information technology services. 109

4.4.2.1   Telecommunications. 109

4.4.2.2   Information technology services. 112

4.4.3   Transport services. 113

4.4.3.1   Air transport 113

4.4.3.2   Maritime transport 114

4.4.3.3   Railway transport 116

4.4.3.4   Tourism services. 117

5   APPENDIX TABLES. 120

CHARTS

Chart 1.1 Merchandise trade by main HS section, 2015-23. 17

Chart 1.2 Merchandise trade by trading partner, 2015 and 2023. 18

Chart  3.1 Applied MFN tariff rates, 2015 and 2024. 47

Chart 3.2 Average applied tariff rates, by HS section, 2015 and 2024. 48

Chart 3.3 Government procurement volumes, 2015-22. 75

Chart 4.1 Exports of fisheries products from Madagascar and imports from partner countries, 2015‑23. 88

Chart 4.2 Breakdown of fisheries exports (value) by main countries, 2015 and 2023. 89

TABLES

Table 1.1 Basic economic indicators, 2015-23. 11

Table 1.2 Balance of payments, 2015-23. 15

Table 1.3 Trade in services, 2015-23. 19

Table 1.4 Foreign direct investment inflows and outflows by sector, 2015-23. 19

Table 1.5 FDI by main source, 2019-23. 19

Table 2.1 Changes in illicit financial flows identified by SAMIFIN, 2014-23. 24

Table 2.2 Madagascar's scores and ranking according to specialized AML/CFT indices, 2015‑24. 25

Table 2.3 Unilateral preferences granted to Madagascar 31

Table 2.4 Tax provisions of sectoral regimes. 34

Table 2.5 Bilateral investment promotion and protection agreements. 36

Table 3.1 Trade facilitation policy performance. 38

Table 3.2 GasyNet user fees. 39

Table 3.3 Revenue from taxes on imports, by item, 2015‑24. 43

Table 3.4 Madagascar's MFN rates, 2015 and 2024. 44

Table 3.5 Tariff lines with applied MFN tariffs higher than the bound rates, 2024. 44

Table 3.6 Summary of Madagascar's applied MFN tariff, 2024. 48

Table 3.7 Estimated non-ad valorem duties. 50

Table 3.8 Preferential tariffs, 2024. 51

Table 3.9 Differences in excise duty on local and imported products, 2024. 53

Table 3.10 Special taxes on alcoholic beverages and manufactured tobacco. 54

Table 3.11 Prohibited imports. 54

Table 3.12 Trade remedies applied in Madagascar 56

Table 3.13 Export‑prohibited products. 59

Table 3.14 General Tax Code incentives promoting ZEFs applicable to ZEFs created as of 2022  61

Table 3.15 Main SPS‑related legislation and regulations. 67

Table 3.16 SPS measures notified to the WTO, 2016‑24. 67

Table 3.17 Quality controls conducted by ACSQDA on imported products, 2016‑23. 69

Table 3.18 Actors involved in SPS food risk control measures. 69

Table 3.19 Main companies with a state holding operating as of 31 December 2023. 73

Table 3.20 Thresholds for awarding government procurement contracts through calls for tender, 2024. . 76

Table 3.21 Patent fees. 78

Table 3.22 Industrial property applications filed and approved, 2015 and 2022. 78

Table 4.1 Production of food, industrial and cash crops, 2017‑23. 80

Table 4.2 Principal agricultural imports, 2015‑23. 80

Table 4.3 Principal agricultural exports, 2015‑23. 81

Table 4.4 Imports and production of rice, 2015‑23. 84

Table 4.5 Support for the development of the rice subsector, 2015‑24. 84

Table 4.6 Exports of vanilla and cloves, 2015‑23. 85

Table 4.7 Summary of economic data for the fisheries and aquaculture sector, 2018‑22. 87

Table 4.8 Exports of fisheries products, 2015 and 2023. 88

Table 4.9 Forestry sector exports by main product, 2015‑23. 90

Table 4.10 Export‑related forestry fees. 90

Table 4.11 Main indicators of the economic importance of the mining sector, 2015‑23. 91

Table 4.12 Brief description of the activities and shareholders of the main mining companies operating in Madagascar 93

Table 4.13 Value of hydrocarbon exports, 2015‑23. 95

Table 4.14 Activities of major oil and gas operators. 96

Table 4.15 Coal imports and exports (HS code 2701), 2015‑23. 97

Table 4.16 Oil sector imports, 2015‑23. 98

Table 4.17 Gas sector imports, 2015‑23. 99

Table 4.18 Manufacturing indicators, 2015‑23. 103

Table 4.19 Main financial soundness indicators^a 105

Table 4.20 Main economic indicators for the microfinance sector, 2015 and 2023. 106

Table 4.21 Premiums collected by insurance companies (ICs), 2015-23. 107

Table 4.22 Telecommunications indicators, 2015-23. 109

Table 4.23 Exports, imports, and total market size for telecom, e-commerce, IT outsourcing platforms and equipment, 2019-23. 113

Table 4.24 Maritime traffic by type of merchandise, 2016-19. 114

Table 4.25 Rail traffic on the southern network, 2015-23. 116

Table 4.26 Rail traffic on the northern network, 2015-23. 116

Table 4.27 Main tourism sector indicators, 2015-23. 117

Table 4.28 Top ten countries of origin for tourists, 2014 and 2023. 117

Table 4.29 Establishments, capacity and jobs in the various tourism professions, 2016‑23. 118

Table 4.30 Investment in hotels, restaurants and travel and tourism service companies,
2015‑23. 119

BOXES

Box 3.1 VAT-exempt products and services. 52

APPENDIX TABLES

Table A1.1 Merchandise exports by HS section and main HS chapter, 2015-23. 120

Table A1.2 Merchandise imports by HS section and main HS chapter, 2015-23. 122

Table A1.3 Merchandise exports by trading partner, 2015-23. 124

Table A1.4 Merchandise imports by trading partner, 2015‑23. 125

Table A2.1 Cases processed and sentences handed down by the PACs since their effective establishment, 2019-23. 126

Table A2.2 New trade-related laws and regulations, 2015-24. 127

Table A4.1 Trade in mining sector goods, 2015‑23. 129

Table A4.2 Madagascar's power plants by type of energy, start-up date and managing entity  130