The African country of Madagascar is the world’s 4th largest island (587,000 square miles) located off the east coast of continental southern Africa in the Indian Ocean, Mozambique is due west. The economy is progressing forward since the mid 1990’s when privatization and market policies were first implemented away from the previous socialist centrally planned model. Madagascar is rich in natural resources including fish, forestry, minerals & metals, hydropower, etc. However, the economic progress has been hampered by political instability at times, external economic shocks and weather risk. As such, upwards of 50 percent of the 18.6 million citizens are considered to be living below the poverty line.
Economic Statistics
Total GDP as measured by purchasing power parity stands at $16 billion USD (2005) with corresponding GDP/Capita at $900 USD. Market GDP at $4.7 billion USD (2005). GDP growth rates include year 2005 at 5.1 percent, year 2002 fell 12 percent (political crisis), year 2006 estimated at 4.7 percent and 2007 at 5.6 percent. Inflation quotes have year 2005 at 15 percent, 2006 projected at 11.2 percent and 2007 at 9.6 percent. The trade deficit came in at $449 million USD (2005), external debt at $4.6 billion USD (2002). Foreign exchange reserves including gold are at $572 million USD equivalent (2002). Agriculture (world’s largest vanilla producer), fishing and forestry employ 80 percent of the population and represents 25 percent of GDP.
CURRENCY: ISO Symbol ‘MGA’, ariary. At time of currency review on November 21, 2006, the exchange value for the ariary was valued at 2097.5 MGA to the US-dollar (USD) and/or 2687.1 MGA to the Euroland euro (EUR). The currency regime follows that of a floating exchange rate.
CURRENCY HISTORY: the ariary replaced the former Madagascar franc (FMG) on January 1, 2005 at a valuation of 1 ariary to 5 francs. Historical quotes as measured by the MGA valuation have year 2005 at 2003 MGA to the USD, 2004 at 1869, 2003 at 1238 and year 2001 at 1317. Conversely, exchange quotes as indicated by the FMG have year 2003 at 6210 FMG to the USD, 2002 at 6831, 2001 at 6588, year 2000 at 6767, 1999 at 6283, 1998 at 5441, 1997 at 5091, 1996 at 4061, 1995 at 4265, year 1994 at 3067, 1993 at 1913 FMG.
CURRENCY FORECAST: risks to economic progress include social such as diseases, primary infectious diseases such as waterborne & food. Madagascar is rich in natural resources (ie. nickel), a nation self-sufficient in energy output, there is great potential ahead if they can win the challenge of limiting the impact of disease and poverty.
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