Madagascar

Region: Africa
 

Classification of economies by geographic region is based on that of the United Nations Statistics Division.

Low Income
 

Based on the income levels set out by the World Economic Forum (WEF) in its Global Competitiveness Report. However, the groupings are slightly different due to the numbers of economies covered. For GEM, the low income group contains both those classified as low income and lower middle by WEF, and the middle income group has those that WEF groups as upper middle. High income is the same for both GEM and WEF.

Population: 25.6 million (2018)
 

Population data is from the World Bank, except Palestinian Territories World Population Review and Taiwan Worldometers

GDP Growth: 4.2% (2016)
 

GDP growth data is from the World Economic Outlook Database, except Palestinian Territories Worldometers

GDP Per Capita: $414 (2010)
 

GDP per capita data is from the World Economic Outlook Database, except Palestinian Territories Worldometers

Entrepreneurial Behaviour and Attitudes

Most recent data: 2019
  • Madagascar 2019
  • Madagascar 2018
  • Global Average
  • Regional Average
  • Income Level Average

Self-Perceptions

  • 1
     
    Perceived Opportunities Rate:Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who see good opportunities to start a firm in the area where they live
  • 2
     
    Perceived Capabilities Rate:Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who believe they have the required skills and knowledge to start a business
  • 3
     
    Fear of Failure Rate*:Percentage of the 18–64 population who agree that they see good opportunities but would not start a business for fear it might fail. NOTE: this is a percentage of those seeing good opportunities, and not the total adult population
  • 4
     
    Entrepreneurial Intentions Rate:Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who are latent entrepreneurs and who intend to start a business within three years
  • 1. Perceived Opportunities Rate
  • 2. Perceived Capabilities Rate
  • 3. Fear of Failure Rate*
  • 4. Entrepreneurial Intentations Rate:

Activity

  • 1
     
    Total early-stage Entrepreneurial Activity (TEA):Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business
  • 2
     
    Established Business Ownership Rate:Percentage of 18-64 population who are currently an owner-manager of an established business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than 42 months
  • 3
     
    Entrepreneurial Employee Activity Rate:Rate of involvement of employees in entrepreneurial activities, such as developing or launching new goods or services, or setting up a new business unit, a new establishment or subsidiary
  • 1. Total early-stage Entrepreneurial Activity (TEA)
  • 2. Established Business Ownership Rate
  • 3. Entrepreneurial Employee Activity Rate

Motivations

  • 1
     
    Motivational Index:Percentage of those involved in TEA that are improvement-driven opportunity motivated, divided by the percentage of TEA that is necessity-motivated
  • 1. Motivational Index

Gender Equity

  • 1
     
    Female/Male TEA Ratio:Percentage of female 18-64 population who are either a nascent entrepreneur or owner-manager of a 'new business', divided by the equivalent percentage for their male counterparts
  • 2
     
    Female/Male Opportunity-Driven TEA Ratio:Percentage of those females involved in TEA who (i) claim to be driven by opportunity as opposed to finding no other option for work; and (ii) who indicate the main driver for being involved in this opportunity is being independent or increasing their income, rather than just maintaining their income, divided by the equivalent percentage for their male counterparts
  • 1. Female/Male TEA Ratio
  • 2. Female/Male Opportunity-Driven TEA Ratio

Impact

  • 1
     
    High Job Creation Expectation Rate:Percentage of those involved in TEA who expect to create 6 or more jobs in 5 years
  • 2
     
    Innovation Rate:Percentage of those involved in TEA who indicate that their product or service is new to at least some customers AND that few/no businesses offer the same product
  • 3
     
    Business Services Sector Rate:Percentage of those involved in TEA in the 'Business Services' sector - Information and Communication, Financial Intermediation and Real Estate, Professional Services or Administrative Services, as defined by the ISIC 4.0 Business Type Codebook
  • 1. High Job Creation Expectation Rate
  • 2. Innovation Rate
  • 3. Business Services Sector Rate

Societal Values

  • 1
     
    High Status to Successful Entrepreneurs Rate:Percentage of 18-64 population who agree with the statement that in their country, successful entrepreneurs receive high status
  • 2
     
    Entrepreneurship as a Good Career Choice Rate:Percentage of 18-64 population who agree with the statement that in their country, most people consider starting a business as a desirable career choice
  • 1. High Status to Successful Entrepreneurs Rate
  • 2. Entrepreneurship as a Good Career Choice Rate

Entrepreneurial Framework Conditions

Most recent data: 2019

Expert Ratings: 1 = highly insufficient, 5 = highly sufficient

  • Madagascar 2019
  • Madagascar 2019
  • Regional Average
  • Income Level Average
  • Global Average
  • Madagascar 2019
  • Madagascar 2019
  • Regional Average
  • Income Level Average
  • Global Average

Immediate impact: January - July 2020

 

As a result of COVID-19, entrepreneurs have lost significant revenue, while also still having to pay government taxes and employees’ salaries. Only 15 new businesses have been registered by the EDBM (Economic Development Board of Madagascar) so far in 2020, compared to 104 new businesses over the same period last year. This demonstrates a severe reduction in entrepreneurial motivation. Other difficulties experienced by entrepreneurial ecosystems include a lack of raw material for manufacturing, and layoffs. Online educational services have been introduced.

 

Immediate policy interventions: January - July 2020

 

Many funds are available to deal with the pandemic. The emphasis has been placed on social rather than economic aspects.

From the total amount of $347.5 million to support the economy coming from the World Bank, the French Development Agency, the European Union and the Malagasy State, some $295 million was allocated to support companies and employees. To support SMEs, the Central Bank of Madagascar has made $40 million available for low-rate loans, and the World Bank has $5 million available for the same purpose.

Immediate measures include support given directly to individuals and the extension of deadlines for filing and paying taxes and electricity bills. As stated in the 2017 GEM National Report, the African Development Bank is actively working to promote entrepreneurship. A new scheme called the Business Linkage Program will be launched in September 2020 and will run until 2023. The program targets 300 MSMEs from the textiles, mining, agro-industry, manufacturing and service sectors. The main actions will focus on enabling access to skills, the market and finance.

 

Future economic / policy outlook

 

A GDP growth rate of –1.5% is expected for 2020, according to the World Bank. The pandemic is evolving differently depending on region. As an example, to revive tourism, Nosy Be (an island located in northern Madagascar) will welcome foreign tourists from October 2020 with strict COVID-19 testing on arrival and a ban on leaving the island during the stay.

If inadequate steps are taken, it is likely that many more Malagasy businesses will close and unemployment will increase dramatically.

Madagascar Reports

Name
Report information
pdf
  • Year of publication: 2020
  • Category: National Reports
  • Language: French
  • Upload date: 2020-10-01

  • Avec un TAE relativement stable d'année en année, le choix d'une carrière entrepreneuriale est particulièrement désirable, la reconnaissance du statut élevé de l'entrepreneur de mieux en mieux affirmée et l'attention des médias à l'égard de l'entrepreneuriat de plus en plus accrue. Cependant, peu d'opportunités sont jugées profitables et, advenant le cas, elles ne sont pas transformées. L'analyse du talent entrepreneurial montre que les jeunes filles sont plus opportunistes et plus proactives quand les jeunes gens sont plus créatifs et plus visionnaires. Une complémentarité qui pourrait être gagnante lorsque l'on sait que l'égalité homme/femme reste acquise dans l'activité entrepreneuriale à Madagascar.
  • URL: https://gemconsortium.org/report/50524
 Les enjeux et défis de l'entrepreneuriat à Madagascar en 2019/2020
Report information
pdf
  • Year of publication: 2019
  • Category: National Reports
  • Language: French
  • Upload date: 2020-10-01

  • Une activité entrepreneuriale bien ancrée avec le plus grand nombre d'entrepreneurs établis dans le monde et une activité entrepreneuriale des employés quasi nulle: c'est ce qui marque le profil des actifs à Madagascar. Le potentiel des jeunes se confirme. La résilience des femmes est encourageante. Dans un contexte considéré comme plutôt mauvais, la définition d'une politique de développement de l'entrepreneuriat s'inscrit dès lors dans l'urgence.
  • URL: https://gemconsortium.org/report/50529
 Les enjeux et défis de l'entrepreneuriat à Madagascar en 2018
Report information
pdf
Les enjeux et défis de l'entrepreneuriat à Madagascar en 2017
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