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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