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China-Africa Trade Information Service
FDI in Figures
FDI inflows in Madagascar have strongly declined due to the global economic crisis and the major political crisis that the country experienced in 2009-2013, which has resulted in Madagascar's significant diplomatic isolation. Despite the election of Hery Rajaonarimampianina as President, the political situation remains uncertain. In 2014, the country received only about USD 290 million in FDI inflows, a decrease from 2013 when inflows amounted to about USD 500 million.
Madagascar has a tremendous natural potential, but the poor-quality and costly infrastructure (roads, electricity, telecommunications, ports and air freight), its limited access to credit and financial instruments as well as the poor definition of its property titles are all barriers to investment. Political instability has become another major barrier, which has blocked all public investment and provoked the departure of many investors. In terms of its business climate, Madagascar ranked 164th out of 189 economies in the 2016 Doing Business report published by the World Bank. Corruption remains a problem, with Madagascar being ranked 123rd (out of 168 countries) in the 2015 Transparency International report.
Nevertheless, the situation seems to be showing signs of improvement, which is expected to lead to the gradual return of investments, as evidenced by the resumption of the exploration of Malagasy subsoils and ocean floors, which are rich in oil, gold, chromium and uranium. The company Sherrit has launched an exploitation project for nickel and cobalt, at an estimated cost of more than EUR 4 billion. In addition, new oil fields in Tsimiroro have also been opened since 2014 and the French company Rhodia is planning to invest in the exploitation of rare soils in the northwest of Madagascar.
France, Mauritius, China and the United States remain the main investors in Madagascar.