INVESTMENT OPPORTUNITIES
INVESTMENT OPPORTUNITIES
IN
MADAGASCAR
September 2004
MALAGASY ECONOMY
□ Structure of the economy:
GNP: US $ 230 per inhabitant
Population: 17 millions (2004)
□ GDP structure:
Primary sector: 29.2%
Secondary sector: 15.4%
Tertiary sector: 55.4%
□ Exportation: 28% GDP (average 2001–2003)
□ Coffee, clove, vanilla, crustaceans, textile, chromite,
□ France, USA, Germany, Japan, Great Britain,
□ Importation: 22% GDP (average 2001–2003)
□ Equipment, oil products, raw materials (textile, chemical, iron and steel)
o France, United Arab Emirates, Hong Kong, Mauritius, China, South Africa, Belgium,
ECONOMY:
PERSPECTIVES 2004
Growth rate at least 10%
➢ Inflation restraint at most 5%
➢ Export increase of 16%
➢ Import increase of 7.6%
➢ Tax rate pressure: 11.2%
➢ Increase of the purchasing power
➢ Improvement of health conditions, education, basic infrastructures, security…
GLOBAL OBJECTIVES
➢ Respect of Democracy
➢ Good management of State business
➢ Respect of Human's Rights
➢ Justice and Liberty
INVESTMENT POLICY
➢ Free enterprise–Economy of market
➢ Free movement of goods, people and capitals
➢ Private sector: motor of the growth
➢ Administration: facilitator
INVESTMENT GUARANTEES
➢ Member of the Multilateral Investments Guarantee Agency (AMGI/MIGA): non commercial Risks
➢ African Trade Insurance Agency (A.T.I.A.): political and commercial Risks
ARRANGEMENT REGULATIONS
➢ Liberty of investment
➢ Reassurance of capitals and investments
➢ Liberty of contribution transfer into capitals
➢ Free working order of the business according to statutory rules
➢ Free management of the staff in the respect of the Malagasy labour regulation
➢ Equality of investor treatment
FUNDAMENTAL MEASURES
➢ Foreigners access to the landed-estate: (Law 2003-028 on the 21-08-2003)
Conditions:
Presentation of an investment program
• Supplying of an attestation of contribution of investment funds (U.S. $ 500.000)
Given surface:
• Ranging from 5.000 to 25.000 sq. meter with possible derogation according to the investment in foreign currencies
➢ Possibility of emphyteotical lease for the state property lands: from 18 to 99 years
➢ Planning of dedicated industrial zones: pilot free zone in Toamasina
➢ Construction of tourist land reserves
➢ Constructions of special economic planning zones (SEPZ)
TAX REGIME
Two effective regimes types
1) Regime of common law:
Applicable to all activities operating on local market
2) Regime of exception:
• Preferential Free Zone regime reserved to the activities oriented toward the exportation.
• Law on the Main Mining Investments (more than U.S.$ 250 Millions)
REDUCTION OF DUTIES ON IMPORTATION
(From September 2003 to September 2005)
o Goods of industrial, agricultural and public work facilities.
o Trucks, commercial vehicles,
o Computer facilities, electrical and audiovisual devices,
o Inputs and consumable for clothing industry
o Construction materials (cement, hoses, etc)
BUSINESS ENVIRONMENT IMPROVEMENT
Setting up of the “Guichet Unique des Investissements et du Développement de l’Entreprise” - G.U.I.D.E.-
G.U.I.D.E: “ONE STOP SHOP”
Information – Advice – Orientations
Simplification of Administrative Procedures
Administrative procedures within the GUIDE:
Creation of enterprises: 03 days
• Visa for foreign investors: 05 days
• Concession of work permit: 72 hours
• Application for land acquisition : 60 days
• Prior authorization on Tourism: 25 days
• Approval on free enterprises: 20 days
• Compatibility of Investments with the Environment (MECIE)
➢ Creation of the (Support Committee to the enterprise running follow-up):
• Consulting organ between Administration and Private Sector
• Re-enforcement of partnership between Administration and Private Sector
ECONOMIC POTENTIALITIES
a) Human potentiality:
• Young population
• Skilled and serious labour force
• Competitive labour force cost
b) Natural resources:
• Piscatorial resources
• Intensive and extensive breeding
• Unique and varied forest ecosystems
• Palms – rose wood – ebony
• Important mining Resources:
• Semi-precious stones and gold
• Industrial stones and precious ores
c) Flourishing sectors :
• Tourism
• Mines
• Fishery and aquaculture
• Manufacturing industries oriented toward exportation
• Handicraft
• Agriculture (Biologic, agribusiness)
• TIC
• Basic infrastructures : roads, telecommunications, transportation,
PISCATORIAL RESOURCES
• Seawater – fresh water
- 5.000 km of coastline,
- 2 navy miles of continental shelf,
- 2.000 km2 of lakes, of rivers and aquaculture centers,
• Potential not yet exploited
- 450.000 tons of fish
- Tuna, octopuses, squids cuttlefishes, algaes, “trépang”,…
• Shrimp
- very profitable,
- possibility of improving the reproduction conditions
• Dialogue between authorities (Ministry of Agriculture Breeding and Fishery) and the Association of Shrimp boat Owners in Madagascar (GAPCM),
• Transparency in license concessions
• Products:
- Varied and of qualities
- “Chevaquines”, “bichiques”, “cigales de mer”, shark fins, eels, frogs’leggs, etc.
• Aquaculture:
- Available lands at the rear of mangroves and tropical water of quality
- Eligible sector to the free Zone regime
• Other potentialities:
- Processing Industries after the “boutres”,
MINING RESOURCES
• Rich subsoil:
- World leader in terms of mica, second in chromite, deposits growth (quartz, marbles, graphite, nickel, cobalt, “ilmenite”, titanium, iron, copper, gold, tin of strong “cassiterite” content,…
- Safe of treasure: fine stones, ruby, sapphire, emerald, beryl,…
- Under - exploited
• Mining code:
- Guaranteed mining rights
- Equitable management of mining permit
- Investment securities
- Automatic transformation of research permits into exploitation permit
• Mining titles: transferable, modifiable, susceptible of pledge or mortgage,
• Privilege of Industries jewelers
AGRICULTURE
➢ Potentiality
- Varied climate
- Varied Pedology
- Fertile and virgin land set for large scale culture
- Young rural and abundant labour force
• Biological agriculture:
- Spices: pepper, cinnamon, ginger, “curcuma”, pimento… (Total Production: 3.000 t per year
- Essential oils: ylang-ylang, cinnamon, vanilla, clove, mint, “tagète”, geranium,…
- Medicinal plants: Centella asiatica, Raventsara…
- Textile fibers: raffia, “rabane”, raw cotton,
- Others; sugar bio, agricultural rum…
➢ In term of figurers:
- Biological Products: increasing demand on the international market (ex.: USA: a market of more than US $200 Billions)
- “Spices–Essential Oils” sector generates for Madagascar foreign currency of more than US $20 Millions per year
T.I.C
• Telephonic facilities modernization:
- Numerical stations,
- Land stations linked by satellite
- Operations of network adjusting
• Opening to the outside world:
- Land lines till the remote regions,
- Concession of licenses to operators of mobile telephony
TOURISM
➢ Madagascar: a privileged site
- Fourth biggest island of the world with its coast full of islets serving shelters to fishers;
- Crossroad between Asia and Africa;
- Diversity of destinations:
• Seashore sport,
• Surfing and diving,
• Discovery of parks, reserves, beaches of white sand or volcanic canyons of Madagascar,
REGIONAL SPECIFICITIES
➢ Haut-plateaux:
❖ Past volcanic
❖ Massif of Andringitra
➢ North-West: virgin island coast
❖ Bay of Antsiranana : one of most beautiful in the world and the first tourist destination, Nosy Be
➢ South-West and:
❖ Tropic of Capricorn
❖ “Exhumation: returning of death” re-wrapped in their new shroud
❖ Depth of sub-marine and immense coral reef of Toliary
➢ South-East:
❖ Coast of contrasts, between tropical forest and “bush” semi-arid
➢ East:
❖ Coast of Rosewood and primary forest
❖ Vanilla Creeks Gardens of pirates dens
DIVERSIFIED AND ENDEMIC NATURAL RESOURCES
➢ Varied flora:
❖ 95% of plantation species specific to the island
❖ Orchids, wild rosebushes, dwarf baobab,
❖ Large virgin spaces
➢ Unique fauna to the world:
❖ 32 species of lemurs,
❖ 190 types of amphibians,
❖ 250 kinds of reptiles
➢ Varied climates
HOST COUNTRY FOR INVESTORS
➢ Constitution of tourist land reserves
➢ Modernization of roads and airports
➢ Tourism: Second source of foreign currencies
MADAGASCAR:
ENORMOUS POTENTIALITY
OPENING TO FOREIGN INVESTORS
Misaotra Tompoko!
Merci beaucoup!
Thank you!
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