On 22 February, the UK Ambassador to Madagascar, David Ashley, hosted a virtual discussion exploring the potential impact of Madagascar formally joining the African Continental Free Trade Area (AfCFTA).
The event, organised by the British Embassy and the London-based global affairs think tank, ODI, aimed to support informed deliberations within Madagascar regarding AfCFTA membership. Key attendees included the Minister of Foreign Affairs, H.E. Mrs Rasata Rafaravavitafika, senior government officials from other relevant ministries, as well as representatives from Madagascar’s private sector stakeholders and the international community.
The meeting focused on a new research report by ODI, funded by the British Government, that analyses the potential benefits and challenges for Madagascar joining the AfCFTA. While Madagascar has signed the AfCFTA, it is one of only seven African countries yet to ratify the landmark agreement which aims to increase intra-African trade in goods and services.
The ODI report, which will be made available in French and English in the coming weeks, suggests that joining the AfCFTA would likely increase Madagascar’s exports and imports by almost $10 million and $4.4 million respectively, once the agreement is fully implemented. This will bolster Madagascar’s economy, leading to increased employment, improved food security, and reduced poverty.
Furthermore, the AfCFTA is expected to create new opportunities within the services sector, particularly in areas like transport, logistics, and tourism – potentially increasing Madagascar’s appeal as a tourist destination.
The study also highlights Madagascar’s potential for growth within the digital commerce sector. However, to fully maximise the benefits from the opportunities provided by the AfCFTA, the report recommends the need for Madagascar to further develop its hard and soft infrastructure and reduce the costs associated with digital services.
Moreover, increased trade and investment resulting from membership could result in opportunities that benefit women and youths, while contributing to poverty reduction. However, the report acknowledges the need to mitigate potential negative environmental and climate impacts on sectors such as agriculture, tourism, forestry and fishing.
In his speech, Ambassador Ashley explained the British Government’s support for the research:
The UK wants to see economic development in Madagascar and wants to see Madagascar exploit the opportunities that its geographical position offers.
He noted that AfCFTA offers enormous potential to Madagascar today as a market of 1.3 billion people with a combined GDP of US $43.3 billion and with even greater potential for the future as Africa continues to grow economically and demographically.
Dr Max Mendez-Parra, Technical Lead of the Supporting Investment and Trade in Africa (SITA) programme, an initiative funded by the British Government, said:
The SITA programme is committed to supporting governments in negotiating and implementing the AfCFTA. We believe the AfCFTA holds significant promise for Madagascar’s development. Our research can help countries like Madagascar make informed decisions, maximising the benefits of membership while carefully addressing any potential challenges.
