Trade impacts of the AfCFTA in Madagascar: An analysis of trade in goods and services

Calab ese, Linda; Abudu, De ick; Ayele, Yohannes; Lemma, Albe o; Mendez Pa a,
Maximiliano
Resea ch Repo
T ade impac s o he A CFTA in Madagasca : An analysis o
ade in goods and se ices
ODI Repo
P o ided in Coope a ion wi h:
ODI Global, London
Sugges ed Ci a ion: Calab ese, Linda; Abudu, De ick; Ayele, Yohannes; Lemma, Albe o; Mendez
Pa a, Maximiliano (2024) : T ade impac s o he A CFTA in Madagasca : An analysis o ade in
goods and se ices, ODI Repo , O e seas De elopmen Ins i u e (ODI), London
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/313874
S anda d-Nu zungsbedingungen:
Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen
Zwecken und zum P i a geb auch gespeiche und kopie we den.
Sie dü en die Dokumen e nich ü ö en liche ode komme zielle
Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich
machen, e eiben ode ande wei ig nu zen.
So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen
(insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en,
gel en abweichend on diesen Nu zungsbedingungen die in de do
genann en Lizenz gewäh en Nu zungs ech e.
Te ms o use:
Documen s in EconS o may be sa ed and copied o you pe sonal
and schola ly pu poses.
You a e no o copy documen s o public o comme cial pu poses, o
exhibi he documen s publicly, o make hem publicly a ailable on he
in e ne , o o dis ibu e o o he wise use he documen s in public.
I he documen s ha e been made a ailable unde an Open Con en
Licence (especially C ea i e Commons Licences), you may exe cise
u he usage igh s as speci ied in he indica ed licence.
h ps://c ea i ecommons.o g/licenses/by-nc-nd/4.0/
T ade impac s o he
A CFTA in Madagasca
An analysis o ade in goods and se ices
Linda Calab ese, De ick Abudu, Yohannes Ayele, Albe o Lemma and
Maximiliano Mendez-Pa a
May 2024
Key messages
As a pa y o he A ican Con inen al F ee T ade A ea (A CFTA), Madagasca could
see some inc eases in impo s om and expo s o A ican coun ies. On balance, he
inc ease in expo s is likely o o se he inc ease in impo s.
Madagasca is likely o see inc eased oppo uni ies o ade in se ices, in pa icula
in anspo and logis ics (a p io i y a ea o he A CFTA) and ou ism. Madagasca
could be p omo ed o o he A ican coun ies as a ou ism des ina ion.
Madagasca ’s digi al ade sec o is g owing bu , i i is o p o i om oppo uni ies
a ailable unde he A CFTA, he coun y will need o s eng hen i s ha d and so
in as uc u e and dec ease cos s ela ed o digi al se ices.
Opening up ade and in es men could esul in an inc ease in wo k oppo uni ies ha
could bene i women and you h and educe po e y. Howe e , some o hese ac i i ies
( o es y, ishe ies) may ha e nega i e en i onmen al and clima e impac s ha need o
be add essed a he sec o le el.
Repo
ODI Repo
2
Reade s a e encou aged o ep oduce ma e ial o hei own publica ions, as long as
hey a e no being sold comme cially. ODI eques s due acknowledgemen and a copy
o he publica ion. Fo online use, we ask eade s o link o he o iginal esou ce on he
ODI websi e. The iews p esen ed in his pape a e hose o he au ho (s) and do no
necessa ily ep esen he iews o ODI o ou pa ne s.
This wo k is licensed unde CC BY-NC-ND 4.0.
How o ci e: Calab ese, L., Abudu, D., Ayele, Y., Lemma, A. and Mendez-Pa a, M.
(2024) T ade impac s o he A CFTA in Madagasca : An analysis o ade in goods and
se ices. ODI Repo . London: ODI (h ps://odi.o g/en/publica ions/ ade-impac s-o -
he-a c a-in-madagasca -an-analysis-o - ade-in-goods-and-se ices)
ODI Repo
3
Acknowledgemen s
Abou his publica ion
This epo is pa o he Suppo ing T ade and In es men in A ica p og amme, which
is unded by he UK Fo eign, Commonweal h & De elopmen O ice (FCDO). I does
no necessa ily e lec he iews o posi ions o FCDO o ODI. The au ho s wish o
hank Sheila Page o he pee e iew. Any e o s emain ou own.
Abou he au ho s
Linda Calab ese is a Resea ch Fellow a ODI.
De ick Abudu is a Senio Resea ch O ice a ODI.
Yohannes Ayele is a Senio Resea ch O ice a ODI.
Albe o Lemma is a Resea ch Fellow a ODI.
Maximiliano Mendez-Pa a is a P incipal Resea ch Fellow a ODI.
ODI Repo
4
Con en s
Acknowledgemen s .................................................................................................................... 3
Con en s ................................................................................................................................. 4
Ac onyms ................................................................................................................................. 6
Execu i e summa y .................................................................................................................... 8
1 In oduc ion ................................................................................................................... 11
2 Backg ound on Madagasca ’s cu en ade con ex ..................................................... 12
Pa e ns o ade in goods wi h A ican coun ies .......................................................... 12
2.1.1 Gene al ends .............................................................................................................. 12
2.1.2 Madagasca ’s ading pa ne s ...................................................................................... 13
2.1.3 Sec o s and p oduc aded ........................................................................................... 13
Ta i s uc u e ............................................................................................................... 14
Madagasca ’s membe ship o egional economic communi ies .................................... 15
Pa e ns o ade in se ices wi h A ican coun ies ...................................................... 17
Focus on digi al: in as uc u e and e-comme ce .......................................................... 20
2.5.1 Digi al pene a ion and li e acy ...................................................................................... 20
2.5.2 Ha d and so digi al in as uc u e ................................................................................ 20
2.5.3 Digi al comme ce .......................................................................................................... 22
2.5.4 O he ade ag eemen s wi h digi al p o isions ............................................................. 23
In es men o and om o he A ican coun ies ............................................................ 23
3 How will he A CFTA a ec Madagasca ’s ade? ......................................................... 25
B ie desc ip ion o he A CFTA’s p o isions ................................................................. 25
Analysis o he A CFTA’s impac on Madagasca ’s ade using a pa ial equilib ium model
............................................................................................................................... 27
3.2.1 Impac s on goods impo s and a i e enues .............................................................. 27
3.2.2 Impac s on expo s ........................................................................................................ 28
Assessing po en ial ade di e sion, ade c ea ion and compe i i eness losses ......... 29
Po en ial impac s on ade in se ices wi h a ocus on e-comme ce ............................. 29
4 Social and en i onmen al impac s o he A CFTA ......................................................... 32
Impac s on po e y ........................................................................................................ 32
Impac s on women and you h ....................................................................................... 33
Impac s on clima e and he en i onmen ...................................................................... 34
5 Policy ecommenda ions ............................................................................................... 36
T ade and in es men ................................................................................................... 36
Recommenda ions o digi al ade and e-comme ce de elopmen .............................. 37
Recommenda ions on how o mi iga e ad e se social and en i onmen al impac s ...... 38
Re e ences ............................................................................................................................... 39

ODI Repo
5
Appendix 1 Re iew o exis ing s udies on he impac s o he A CFTA on Madagasca ...... 42
Appendix 2 Ma ke access .................................................................................................. 43
Appendix 3 T ade in goods wi h A ican pa ne s ................................................................ 44
Appendix 4 T ade in goods by p oduc ................................................................................ 46
Appendix 5 De ailed impo a i s ....................................................................................... 48
Appendix 6 T ade in se ices wi h A ican coun ies ........................................................... 50
Appendix 7 O e iew o e-comme ce in majo A ican ma ke s .......................................... 51
Appendix 8 Pa ial equilib ium model .................................................................................. 52
Appendix 9 Resul s o he pa ial equilib ium model ........................................................... 54
ODI Repo
6
Ac onyms
A CFTA A ican Con inen al F ee T ade A ea
AGOA A ican G ow h and Oppo uni y Ac
BaTiS Balanced T ade in Se ices
BPO business p ocess ou sou cing
CAGR compound annual g ow h a e
COMESA Common Ma ke o Sou he n and Eas e n A ica
DCTS De eloping Coun ies T ading Scheme
EAC Eas A ican Communi y
EBA E e y hing Bu A ms
EDBM Economic De elopmen Boa d o Madagasca
EPA Economic Pa ne ship Ag eemen
EU Eu opean Union
FDI o eign di ec in es men
GATS Gene al Ag eemen on T ade in Se ices
GDP g oss domes ic p oduc
GHG g eenhouse gas
GNI g oss na ional income
GNIpc g oss na ional income pe capi a
GSP Gene alised Sys em o P e e ences
ICT in o ma ion and communica ion echnology
IMF In e na ional Mone a y Fund
INSTAT Ins i u na ional de la s a is ique
ISDS in es o –s a e dispu e se lemen
IT in o ma ion echnology
ITU In e na ional Telecommunica ion Union
LDC leas de eloped coun y
MFN mos a ou ed na ion
n.e.s. no elsewhe e speci ied
NTB non- a i ba ie
OECD O ganisa ion o Economic Co-ope a ion and De elopmen
PEM Plan Emé gence Madagasca
PIC2 Pôles In ég és de C oissance e Co ido s
PPP pu chasing powe pa i y
PPP$ pu chasing powe pa i y dolla s
REC egional economic communi y
RoO ules o o igin
SADC Sou he n A ican De elopmen Communi y
SITC S anda d In e na ional T ade Classi ica ion
SMEs small and medium-sized en e p ises
TAPED T ade Ag eemen P o isions on Elec onic-comme ce and Da a
TMEA T adeMa k Eas A ica
TRAINS T ade Analysis In o ma ion Sys em
UK Uni ed Kingdom
UNCTAD Uni ed Na ions Con e ence on T ade and De elopmen
UNECA Uni ed Na ions Economic Commission o A ica
ODI Repo
7
US Uni ed S a es
USD US dolla s
USITC Uni ed S a es In e na ional T ade Commission
VAT alue-added ax
WDI Wo ld De elopmen Indica o s
WITS Wo ld In eg a ed T ade Solu ion
WTO Wo ld T ade O ganiza ion
ODI Repo
8
Execu i e summa y
The A ican Con inen al F ee T ade A ea (A CFTA) is a c i ical ins umen o A ican
coun ies in use in di e si ying and ans o ming hei economies. I will educe ba ie s
be ween A ican Union Membe S a es wi hin he aim o inc easing in a-A ican ade
in goods and se ices, and in es men .
Madagasca is one o he 54 signa o ies o he A CFTA bu , a he ime o w i ing, is
among he se en coun ies ha ha e no a i ied he Ag eemen ( alac, 2023a). The
coun y’s go e nmen and he p i a e sec o a e conside ing he implica ions o joining
he ee ade a ea. The pu pose o his epo is o summa ise some o he e idence
on possible e ec s om joining and o indica e how membe ship could bene i
Madagasca .
In he pas wo decades, Madagasca ’s ade wi h o he A ican coun ies has
inc eased in olume, in e ms o bo h impo s and expo s, bu i has emained
ela i ely s able as a sha e o o al ade. Madagasca ades wi h many A ican
coun ies bu he majo i y o i s ade is wi h wo pa ne s, Sou h A ica and Mau i ius.
Madagasca is al eady pa o ee ade a eas wi h hese coun ies unde he
Sou he n A ican De elopmen Communi y (SADC) and he Common Ma ke o
Sou he n and Eas e n A ica (COMESA). In ade in se ices, mos o he coun y’s
ade is again wi h Sou h A ica and Mau i ius, and o a mino ex en wi h Angola and
Egyp , e lec ing he impo ance o ade wi hin SADC and COMESA. The main
se ices expo s a e anspo and a el.
One a ea o pa icula in e es is digi al ade. Madagasca ’s digi al ade is g owing,
and his is a p io i y a ea o he go e nmen . Howe e , ha d and so digi al
in as uc u e is s ill unde de elopmen , and he high cos s o da a and de ices mean
he coun y s ill sees a ma ked digi al di ide. As a signa o y o he A CFTA, he
go e nmen o Madagasca has pa icipa ed in i s nego ia ions on digi al ade.
This s udy conduc ed a pa ial equilib ium analysis o assess he po en ial impac s o
joining he A CFTA on ade in goods. I should be no ed ha any changes do no
a ec a i s on Madagasca ’s ade wi h SADC and COMESA coun ies, which a e i s
majo ading pa ne s. The analysis ound ha :
• The A CFTA would gene a e an inc ease in o al Madagasca impo s o 0.1%, o
a ound $4.4 million. The co esponding educ ion in a i e enues is es ima ed a
$1.5 million. These changes a e domina ed by a single p oduc (p ese ed
sa dines).
• In e ms o expo s, he changes will a ec only expo s o Mo occo and Nige ia,
which will inc ease by $3.8 million and $9.7 million, espec i ely (o 58% and 36%
o o al ade wi h hese coun ies). These inc eases cons i u e a la ge expansion o
he alue expo ed o hese A ican coun ies, g ea e han he expansion o
impo s gene a ed by he A CFTA.
ODI Repo
15
Table 2 Madagasca ’s impo a i s, 2022
Summa y
To al
Ag icul u al p oduc s
Non-ag icul u al p oduc s
Simple a e age inal bound
27.4
30.0
25.3
Mos a ou ed na ion applied
Simple a e age
11.8
14.8
11.3
T ade-weigh ed a e age
8.3
6.5
8.8
Sou ce: WTO
Looking a b oad p oduc g oups, ish and ish p oduc s ha e high applied a i a es,
a 19.7%, ollowed by be e ages and obacco, a 19.4%. Fo non-ag icul u al goods,
he ca ego y wi h he highes a i s in Madagasca is clo hing p oduc s, subjec o an
a e age a i o 19.9%. Appendix 5 p o ides de ails on a i s on main impo s.
Madagasca imposes a i s o abo e 10% on a e age on he o he A CFTA coun ies.
Impo an ly, Madagasca , being a membe o egional ag eemen s such as he
Common Ma ke o Eas e n and Sou he n A ica (COMESA) and he Sou he n A ican
De elopmen Communi y (SADC), bene i s om a i exemp ions in i s expo s o
ellow membe s a es like Sou h A ica, p o ided hese expo s adhe e o ules o
o igin equi emen s. When conside ing Madagasca ’s many ade pa ne s in A ica,
we can see ha applied a i s a y conside ably. Sou h A ica, a signi ican expo
des ina ion pa ne o Madagasca , main ains a mos a ou ed na ion (MFN) applied
a i o 7.6%. Mo occo and Kenya le y a i s o 14% each. E hiopia imposes a a i o
17%. Sudan imposes a highe a i bu accoun s o jus 0.3% o ade. Appendix 5
p o ides de ails o o he coun ies.
Madagasca ’s membe ship o egional economic communi ies
Madagasca pa icipa es in a ious egional economic communi ies (RECs). Wi hin he
A ica egional con ex , Madagasca has been a membe o he COMESA ee ade
a ea since 2000. COMESA, as a egional o ganisa ion o Eas A ica comp ising 21
membe s a es, acili a es economic coope a ion and in eg a ion, wi h a popula ion o
o e 520 million and o al ade in goods wo h $235 billion. COMESA p o ides a i -
ee access among membe s a es. Figu es 6 and 7 show Madagasca ’s expo s o
and impo s om COMESA and non-COMESA A ican coun ies o e he pas wo
decades. The sha e o expo s going o COMESA coun ies has been subs an ial bu
is declining. In 2022, only 34% o Madagasca ’s expo s o A ica wen o COMESA
membe s a es, down om 59% in 2009. Madagasca ’s impo s om COMESA
membe s a es a e subs an ial, amoun ing o 48% o i s A ican impo s in 2022.
Addi ionally, Madagasca joined SADC in 2005. Membe ship o SADC p o ides
Madagasca wi h subs an ial comme cial ad an ages, o e ing access o a ma ke
boas ing o e 200 million consume s and p e e en ial a i ea men among i s
membe s a es. In 2022, 77% o Madagasca ’s expo s wen o SADC coun ies, e en
hough his had declined compa ed wi h 89% in 2002 and 81% in 2009. Simila ly, he
sha e o Madagasca ’s impo s om SADC membe s a es declined om 85% in 2002
and 88% in 2009 o 79% in 2022.
An impo an hing o no e is ha he e is an o e lap be ween COMESA and SADC
membe ships, as Figu e 5 shows. Figu e 5 illus a es ha , in addi ion o Madagasca ,
se en coun ies a e membe s o bo h COMESA and SADC. Because o his, i is
use ul o p o ide an o e iew o Madagasca ’s ade wi h bo h COMESA and SADC,
is-à- is ha wi h he es o A ica. Madagasca ’s expo s o COMESA and SADC

ODI Repo
16
a e aged $105 million/yea in 2002–2023, equi alen o 89% o Madagasca ’s o al
ade wi h A ica (Figu e 6). Simila ly, Madagasca ’s impo s om COMESA and
SADC a e aged $382 million/yea in 2002–2023, equi alen o 98% o Madagasca ’s
o al impo s om A ica (Figu e 7).
Figu e 5 O e lapping COMESA and SADC membe ships
Sou ce: Au ho s
Figu e 6 Madagasca ’s expo s o COMESA and SADC is-à- is expo s o he
es o A ica
Sou ce: Au ho s’ calcula ions using da a om WITS
-
50
100
150
200
250
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
US$ million
Expo s o COMESA/SADC coun ies Expo s o es o A ica
ODI Repo
17
Figu e 7 Madagasca ’s impo s om COMESA and SADC is-à- is impo s
om he es o A ica
Sou ce: Au ho s’ calcula ions using da a om WITS
Pa e ns o ade in se ices wi h A ican coun ies
Madagasca ’s se ices expo s o A ica inc eased ma ginally om $76 million in 2012
o $79 million in 2019. Howe e , se ices expo s ha e plumme ed since 2019,
p ima ily because o es ic ions imposed o con ol he COVID-19 pandemic. They
we e a $32 million in 2021, e lec ing a 58% decline since 2012. The expo
s agna ion and subsequen plumme ing pos -COVID led o he coun y’s al eady small
A ican sha e o i s o al se ices expo s declining om 6% in 2012 o 5% in 2021.
Figu e 8 Se ices expo s o A ica ( olume and sha e o o al expo s)
Sou ce: Au ho s’ calcula ions using da a om OECD and WTO BaTiS
Madagasca ’s se ices expo s a e concen a ed in a ew sec o s. In gene al, se ices
expo s can be classi ied as:
• adi ional se ices – anspo ; a el; main enance and epai se ices
• knowledge-in ensi e se ices – manu ac u ing; cons uc ion; insu ance and
pension se ices; inancial se ices; elecommunica ions, compu e s and
in o ma ion se ices; pe sonal, cul u al and ec ea ional se ices; cha ges o use
o in ellec ual p ope y; o he business se ices
• non-ma ke se ices – go e nmen goods and se ices
-
200
400
600
800
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
US$ million
Impo s om COMESA/SADC coun ies Impo s om es o A ica
1
2
3
4
5
6
0
10
20
30
40
50
60
70
80
90
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
%
US$ million
To al se ices expo s o A ica A ican sha e o global se ices expo s
ODI Repo
18
O he h ee ca ego ies o se ices, he highly knowledge-in ensi e ones ha e
ela i ely high linkages wi h o he sec o s o he economy. T anspo and ou ism
se ices yield o he bene i s, in pa icula wi h ega d o hei employmen c ea ion
po en ial. In Madagasca , on a e age, adi ional se ices such as anspo and
ou ism domina e. These se ices accoun ed o 84% o Madagasca ’s expo s o
A ica om 2012 o 2019 be o e hei sha e d opped o 51% in 2021. None heless,
imp essi ely, inancial se ices and elecommunica ions and compu e and in o ma ion
se ices wi nessed compound annual g ow h a es (CAGRs) o 36% and 15%,
espec i ely, in he pe iod unde e iew. Wi h he po en ial o ease egula o y
equi emen s and immig a ion policies, he A CFTA P o ocol on T ade in Se ices
could be a condui o Madagasca o inc ease i s expo s o se ices, especially
knowledge-in ensi e se ices, o A ican ma ke s.
Figu e 9 Sec o al b eakdown o se ices expo s o A ica
Sou ce: Au ho s’ calcula ions using da a om OECD and WTO BaTiS
Madagasca ’s impo s om A ica, which ha e been consis en ly highe han i s
expo s, we e e ec i ely unchanged om 2012 ($106 million) o 2019 ($108 million)
be o e declining o $93 million in 2021. As o Madagasca ’s A ican expo sha e,
impo s om A ica pale compa ed wi h i s o al impo s. On a e age, A ica accoun ed
o 8% o Madagascan impo s o se ices in 2012–2021. Addi ionally, a he sec o al
le el, adi ional se ices domina ed Madagasca ’s impo s om he A ican con inen .
010 20 30 40 50 60 70 80
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
US$ million
Cha ges o use o in ellec ual p ope y no included elsewhe e Cons uc ion
Financial se ices Go e nmen goods and se ices no included elsewhe e
Insu ance and pension se ices Main enance and epai se ices no included elsewhe e
Manu ac u ing se ices on physical inpu s owned by o he s O he business se ices
Pe sonal, cul u al and ec ea ional se ices Telecommunica ions, compu e and in o ma ion se ices
T anspo T a el
ODI Repo
19
Figu e 10 To al se ices impo s om A ica and global sha e
Sou ce: Au ho s’ calcula ions using da a om OECD and WTO BaTiS
Figu e 11 Sec o al b eakdown o se ices impo s om A ica
Sou ce: Au ho s’ calcula ions using da a om OECD and WTO BaTiS
Rega ding se ices ade pa ne s, coun ies in he Sou he n A ican egion (Sou h
A ica, Mau i ius and Angola) a e he leading des ina ions o Madagasca ’s se ices
expo s in A ica. This pa ly e lec s he ade bene i s associa ed wi h he coun y’s
membe ship o COMESA and SADC, o which Sou h A ica, Mau i ius and Angola also
belong. Bo h COMESA and SADC ha e made e o s o libe alise ade in se ices.
The COMESA Regula ions on T ade in Se ices we e es ablished in 2009 bu wo k
he e is s ill ongoing, as no all coun ies ha e iden i ied sec o s o be libe alised i s .
The SADC P o ocol on T ade in Se ices, which en e ed in o o ce in Janua y 2022,
se s ou gene al ade ules go e ning ade in se ices among he membe s a es,
and p io i ises communica ion, cons uc ion, ene gy, inancial, ou ism and anspo
se ices o ade libe alisa ion.
1
2
3
4
5
6
7
8
9
10
0
20
40
60
80
100
120
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
%
US$ million
To al se ices imop s om A ica A ican sha e o global se ices impo s
020 40 60 80 100 120
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
US$ million
Cha ges o use o in ellec ual p ope y no included elsewhe e
Cons uc ion
Financial se ices
Go e nmen goods and se ices no included elsewhe e
Insu ance and pension se ices
Main enance and epai se ices no included elsewhe e
Manu ac u ing se ices on physical inpu s owned by o he s
O he business se ices
Pe sonal, cul u al and ec ea ional se ices
Telecommunica ions, compu e and in o ma ion se ices
T anspo
T a el
ODI Repo
20
O e all, a leas 75% o Madagascan se ices expo s o A ica ha e been des ined o
10 coun ies on he con inen . As o expo s, he leading h ee impo ing coun ies
om A ica o Madagasca ’s se ices a e Mau i ius, Egyp and Sou h A ica, which all
belong o COMESA; he emaining op impo sou ces a e sp ead ac oss he
con inen . Appendix 6 p o ides a de ailed b eakdown.
Rega ding i s commi men s unde he Gene al Ag eemen on T ade in Se ices
(GATS), Madagasca is s ill in he ea ly s ages o commi men s and has sough o
expand hose in p o essional, communica ion, inancial and ou ism se ices. The
go e nmen has iden i ied hese sec o s, oge he wi h anspo , as p io i y sec o s,
and i has planned o de elop schedules o speci ic commi men s o con o m wi h he
GATS. Be o e 2015, apa om in p o essional and business se ices, e en wi hou
commi men s unde he GATS, es ic ions on o eign pa icipa ion in o compe i ion o
ou ism, anspo and inancial se ices we e eased (WTO, 2015).
Focus on digi al: in as uc u e and e-comme ce
2.5.1 Digi al pene a ion and li e acy
The go e nmen o Madagasca wan s o p omo e he digi al sec o as an engine o
g ow h o he economy. I has included in o ma ion and communica ion echnology
(ICT) a he cen e o he Ini ia i e Emé gence Madagasca , i s de elopmen s a egy,
published in 2018. This has ICT as one o i s six p io i y sec o s. In line wi h his, he
Plan Emé gence Madagasca (PEM) 2019–2023 looks a he c ea ion o a dynamic
ICT sec o ha can suppo he c ea ion o mo e han 20,000 p i a e jobs and he
de elopmen o human capi al h ough digi al echnologies.
Madagasca 's ICT landscape p esen s a peculia pic u e. The island na ion epo ed
5.9 million in e ne use s a he s a o 2023, ansla ing o an in e ne pene a ion a e
o 19.7% (Kemp, 2023). This igu e, while signi ican , alls below he mo e subs an ial
a es obse ed in he es o sub-Saha an A ica, which had a pene a ion a e o 43%
in e ms o unique mobile subsc ibe s and 25% in e ms o mobile in e ne use s in
2023 (GSMA, 2023). Key ba ie s o he adop ion o mobile heal h in e en ions in
Madagasca include limi ed phone owne ship and low digi al li e acy (Lac oze e al.,
2023).
Fu he mo e, he b oade con ex o li e acy in Madagasca also p esen s challenges.
Wi h 75% o i s popula ion li ing below he po e y line, he coun y aces signi ican
challenges in i s educa ion sys em. The li e acy a e s ands a 65%, placing
Madagasca a 182 ou o 194 coun ies globally. The in eg a ion o digi al
echnologies in educa ion is seen as i al o e e sing educa ional decline (Oyebamiji,
2021).
2.5.2 Ha d and so digi al in as uc u e
Madagasca is well se ed in e ms o in e na ional connec i i y, wi h h ee ope a ional
subma ine cables and h ee landing s a ions (and a ou h planned). Howe e , he
middle mile, which is he co e ne wo k o he coun y, managed mainly by Telma, he
incumben ope a o , has only a ound 10,000 km o ib e cables. As a esul , he
backbone ne wo k o he coun y is s ill cos ly, pa ly because o Telma's monopoly in
his sec o o a long ime and i s cu en dominan posi ion (Wo ld Bank, 2023b).

ODI Repo
21
Rega ding he las mile, only 67% o he popula ion had access o a 4G mobile signal
in 2022. In as uc u e deploymen and main enance in u al a eas is expensi e, and
lowe incomes and weak consume demand make he in es men less p o i able, and
hus less appealing, o p i a e ope a o s. Signi ican inancial in es men s a e needed
o imp o e connec i i y in u al and emo e a eas (Wo ld Bank, 2023b).
In addi ion o he gap in co e age, he e emains a signi ican gap in usage e en
among hose who a e co e ed. In pa icula , 72% o hose who can access b oadband
(15.5 million people) do no do so. This is because o he cos o se ices and de ices,
as well as low incomes, o mos o he popula ion.
The cos o mobile in e ne in connec i i y is a ba ie o widesp ead adop ion o
in e ne se ices. Madagasca ’s posi ion in e ms o mobile da a p icing is no able. I
anks 106 h globally, wi h an a e age cos o 1GB o mobile da a a $1.12. Gi en ha
many people in he coun y ha e a low income, his cos is high o hem, con ibu ing
o he digi al di ide.
Figu e 12 p esen s a compa ison be ween he cos s o ixed b oadband (5GB) and
da a-only mobile b oadband (2GB) o Madagasca and he en i e y o A ica in h ee
di e en p ice me ics: US dolla s (USD), pu chasing powe pa i y dolla s (PPP$) and
as a pe cen age o g oss na ional income pe capi a (GNIpc).
In Madagasca , he cos o ixed b oadband (5GB) is no ably highe han ha o da a-
only mobile b oadband (2GB) ac oss all h ee me ics. When measu ed in USD, he
ixed b oadband cos is a ound ou imes highe han he mobile b oadband cos . The
dispa i y is e en g ea e when compa ing he cos s in PPP$, wi h ixed b oadband
cos ing mo e han six imes he p ice o mobile b oadband. The di e ence is mos
s a k when looking a he cos as a pe cen age o GNIpc, whe e ixed b oadband akes
up nea ly he en i e GNIpc while mobile b oadband is only a ac ion o i .
Fo A ica as a whole, he pa e n is simila , al hough he ela i e cos s a e lowe . The
ixed b oadband cos in USD and PPP$ emains highe han he mobile b oadband
cos bu he di e ence is less p onounced han in Madagasca . Howe e , when
compa ing cos s as a pe cen age o GNIpc, he di e ence becomes mo e no iceable,
wi h ixed b oadband equi ing a signi ican ly la ge po ion o he a e age income
compa ed wi h mobile b oadband.
O e all, he cha illus a es ha accessing in e ne in Madagasca is mo e expensi e
han in he es o he A ican con inen ; and ha in Madagasca , and o a lesse ex en
in A ica o e all, ixed b oadband is conside ably mo e expensi e han mobile
b oadband, bo h in absolu e e ms and ela i e o income.
ODI Repo
22
Figu e 12 Compa ison o in e ne cos s, Madagasca and A ica, 2022
Sou ce: ITU ICT P ice Baske s da ase
Ano he challenge is he cos o de ices. The Wo ld Bank es ima es ha he cheapes
sma phone cos s 87% o he a e age mon hly income. As a esul , only a ound a hi d
o households in Madagasca ha e a mobile phone, and less han 40% o hese
phones a e sma phones. The high cos o de ices is in luenced by he imposi ion o
high axes and du ies on ICT equipmen (Wo ld Bank, 2023b). O e all, while ac o s
such as low income, demog aphics and limi ed co e age con ibu e o Madagasca 's
unde pe o mance in absolu e e ms, he main eason o i s sho comings compa ed
wi h simila coun ies in he egion is he lack o a o dabili y. While his is a esul o
low incomes, policy also plays a pa . P omo ing compe i ion in he sec o and
educing axes on de ices and da a, o ins ance, could con ibu e o educing p ices
and imp o ing a o dabili y.
In e ms o so digi al in as uc u e, he go e nmen o Madagasca is commi ed o
imp o ing he policy and egula o y en i onmen o digi al ac i i ies. To his end, i has
pu in place se e al pieces o legisla ion and egula ions, including laws on
elecommunica ions and ICT, elec onic ansac ions, elec onic signa u es,
cybe secu i y, p o ec ion o pe sonal da a and digi al cu ency. Howe e , hese laws
lack implemen a ion, which hinde s he de elopmen o he digi al sec o in he coun y
(As o e Conseil, 2022).
2.5.3 Digi al comme ce
E-comme ce is a g owing sec o in Madagasca . As o 2023, he e-comme ce ma ke
in Madagasca is p ojec ed o achie e a signi ican alue, es ima ed a a ound $89
million. P edic ions sugges a s eady CAGR o 7.9% o e he pe iod om 2023 o
2027, poin ing owa ds a p ojec ed ma ke olume o $120.8 million by 2027.
The g ow h o he sec o is pa o a b oade end ac oss A ica, d i en by ac o s
such as inc eased in e ne and sma phone pene a ion; he a ailabili y o a o dable
da a packages; and a young, ech-sa y popula ion. The A ican e-comme ce ma ke
eached $241.6 billion in 2022 and is expec ed o each $567.6 billion by 2028,
g owing a a CAGR o 15.3% in 2023–2028 (IMARC G oup, 2023), eaching an o e all
as e g ow h han ha o Madagasca .
0
20
40
60
80
100
120
140
160
USD PPP$ GNIpc USD PPP$ GNIpc
Madagasca A ica
Fixed b oadband baske (5GB) Da a-only mobile b oadband baske (2GB)
ODI Repo
23
Madagasca 's e-comme ce ma ke , while g owing, is smalle han some o he leading
A ican na ions (see Appendix 7 o a discussion on he e-comme ce ma ke in o he
A ican coun ies). Howe e , he e is a no iceable disconnec be ween cus ome needs
and expec a ions and he cu en ope a ional app oaches o e-comme ce businesses
in Madagasca . This gap is po en ially a ibu able o a ious ac o s, including he
quali y o p oduc s, p icing, deli e y se ices and cus ome suppo (Rapanoel e al.,
2020). In he u u e, i mo e indi iduals in Madagasca gain in e ne access, he
olume o online shopping could escala e, making e-comme ce a no able componen
o he na ion's e ail ade (Smy no a, 2021).
To p omo e he e-comme ce sec o , he go e nmen has c ea ed he S ee ing
Commi ee o he De elopmen o Elec onic Comme ce. Ne e heless, a ce ain
numbe o obs acles emain in e ms o enabling a eal boom in e-comme ce, including
hose ela ed o in as uc u e; s uc u ing o he en i onmen and e-comme ce playe s
in pa icula o acili a e las -mile deli e y; o e en he democ a isa ion o means
(As o e Conseil, 2022).
2.5.4 O he ade ag eemen s wi h digi al p o isions
Las ly, i should be no ed ha Madagasca is pa o a numbe o ade ag eemen s,
some o which include p o isions ela ed o digi al ade. The T ade Ag eemen
P o isions on Elec onic-comme ce and Da a (TAPED) indica es ha Madagasca is
pa o wo such ag eemen s: he SADC–COMESA–EAC (Eas A ican Communi y)
T ipa i e F ee T ade A ea and he In e im Economic Pa ne ship Ag eemen be ween
he Eu opean Communi y and Eas e n and Sou he n A ica S a es (In e im EPA) (Bu i
e al., nd). These ag eemen s ha e limi ed p o isions on digi al ade. Fo ins ance, he
T ipa i e F ee T ade A ea e e s o elec onic da a p ocessing sys ems o be used o
ade acili a ion.
In es men o and om o he A ican coun ies
Madagasca ’s o e all ne o eign di ec in es men (FDI) in lows declined o e 2012–
2022, e lec ing a d op om $778 million o $396 million. In p e ious decades, he
coun y’s na u al esou ces, chie ly nickel, cobal and ag ibusiness goods like sea ood
and anilla, we e c ucial a ac i e ac o s o na u al esou ces o eign in es o s.
Howe e , he coun y has seen a change in sec o al a ac i eness om esou ce-
seeking o e iciency in es men s. In pa icula , acco ding o he Wo ld Bank (2020),
Madagasca ’s IT and business p ocess ou sou cing (BPO) sec o s ha e seen a ise in
FDI in lows, con ibu ing o a apid inc ease in he expo s o hese se ices.
Figu e 13 Value o ne FDI in lows
Sou ce: Au ho s’ calcula ions using UNCTAD FDI da a
778
551
314
436 451 358 353
474
358 358 396
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
US$ million
ODI Repo
24
Madagasca ’s FDI s ock ose by a CAGR o 5% o each $9.09 billion in 2022. Pu ing
Madagasca ’s CAGR o FDI s ock in o con ex , apa om Como os (5%), i is lowe
han ha o some o i s pee s – E hiopia (21%), Mozambique (15%), Rwanda (19%)
and Uganda (9%). None heless, Madagasca s ill has as po en ial o inc ease ne
in lows o se ices FDI o g ow i s FDI s ock. In pa icula , he coun y’s download
speed, ea u ing in he global op 25, a o dable labou luen in F ench and na u al
esou ces (Wo ld Bank G oup, 2020) can be le e aged mo e o a ac inc easing
alues o FDI and numbe s o in es o s in o he se ices sec o , especially IT and
BPO.
Figu e 14 Value o FDI s ock: Madagasca and pee coun ies
Sou ce: Au ho s’ calcula ions using UNCTAD FDI da a
I should be no ed ha ew A ican coun ies in es in Madagasca . Up un il a leas
2014, Mau i ius was he la ges o eign in es o in Madagasca in e ms o FDI in lows
bu no o he A ican coun y was among he op 10 in es o s (INSTAT, 2015). In 2019,
China became he main o eign in es o in e ms o numbe o en e p ises c ea ed,
and Mau i ius was he ou h – bu , again, no o he A ican na ion ea u ed in he op
10 (EDBM, 2019).2
2 I should be no ed ha he wo igu es used o compa e o eign in es men in lows in 2014 and 2019 e e o di e en uni s: FDI
in lows o 2014 and numbe o en e p ises c ea ed in 2019. While hese a e no immedia ely compa able, hey o e a sense o
he magni ude o o eign in es men in he coun y.
0
10,000
20,000
30,000
40,000
50,000
60,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
US$ million
Como os E hiopia Madagasca Mozambique Rwanda Uganda
ODI Repo
31
This migh in ol e adap ing o bes p ac ices in global bila e al ag eemen s and
add essing challenges such as logis ical issues and limi ed in e ne pene a ion (ibid.).
Fo Madagasca , joining he A CFTA and aligning wi h i s P o ocol on Digi al T ade
could mean se e al hings. Fi s , i may necessi a e he de elopmen o policies ha
manage and go e n da a e ec i ely, con ibu ing o he g ow h o he digi al economy
unde he A CFTA amewo k. Addi ionally, Madagasca could bene i om he
p oposed P o ocol, which is expec ed o add ess issues including cybe secu i y,
consume p o ec ion and empowe ing you h and women in digi al ade (ITU, nd).
Gi en Madagasca ’s cu en si ua ion in digi al ade de elopmen , adop ion o
A CFTA p o isions could accele a e i s in eg a ion in o he digi al economy. This could
lead o an enhanced digi al comme ce sec o , le e aging he coun y’s g owing
in e ne access and mobile de ice usage. Howe e , he success o such in eg a ion
would depend on he e ec i e implemen a ion o policies ha add ess exis ing
challenges in digi al li e acy, in e ne pene a ion and he alignmen o e-comme ce
business ope a ions wi h cus ome needs and ma ke demands (Rapanoel e al.,
2020).
In summa y, he A CFTA’s p o isions o digi al ade o e an oppo uni y o
Madagasca o in eg a e mo e ully in o he digi al economy. Howe e , his in eg a ion
equi es signi ican imp o emen s in in e ne in as uc u e, digi al li e acy and policy
amewo ks o ensu e he bene i s o digi al ade unde A CFTA can be ully ealised
in he Malagasy con ex .

ODI Repo
32
4 Social and en i onmen al
impac s o he A CFTA
Impac s on po e y
As Madagasca is a coun y wi h high incidence o po e y (80% o he popula ion
li ing unde he $2.15 po e y line in 2022) (Wo ld Bank, 2023a), po e y educ ion is
a p io i y.
T ade has been ecognised as an engine o g ow h and po e y educ ion. T ade
libe alisa ion can imp o e li elihoods and educe po e y h ough he ollowing
channels (Win e s e al., 2004; Wo ld Bank, 2018):
• T ade spu s economic g ow h and leads o mac oeconomic s abili y. This a ec s
he dis ibu ion o income and can educe associa ed inequali ies, as well as aise
he s anda d o li ing.
• I a ec s ela i e p ices. Since he poo a e bo h consume s and p oduce s, ade
can educe he p ice o wha he poo consume and inc ease he p ice o wha hey
sell. I can inc ease access o he ma e ials, ma ke s, inpu s and echnology ha
aise p oduc i i y. Rela i e p ices can also a ec wages and employmen .
• I may inc ease o eign exchange ese es and go e nmen e enue, which can
suppo be e and inclusi e policies. T ade libe alisa ion educes a i s, which may
lead o a decline in cus oms e enues, bu , by inc easing ade and s imula ing
p oduc ion, i may lead o an inc ease in he collec ion o o he axes, such as
excise du ies, consump ion o VAT on impo s.
Howe e , no all people li ing in po e y a e a ec ed equally by, and bene i equally
om, ade; his depends on whe e hey li e, wha hey consume, wha hey p oduce,
hei gende , hei skill le el and whe e hey wo k. I also depends on whe he ade
inc eases impo compe i ion h ough imp o ed ma ke access.
T ade alone canno end po e y. I mus be suppo ed by di ec policy ac ions ha
edis ibu e he gains om ade. These may include:
• lowe ing cos s o goods and se ices ha a e c i ical o po e y educ ion
• p omo ing p oduc ion (i.e. inc easing he a ie y and quan i y o goods p oduced in
he coun y, and ha can be aded)
• aising in es men in public in as uc u e
• suppo ing hose who ‘lose ou ’ om inc eased ade compe i ion
• imp o ing he educa ion and skill le el (including digi al skills) o he poo ,
especially women
ODI Repo
33
• connec ing small and medium-sized en e p ises (SMEs) o ma ke s
• imp o ing access o inance and esou ces a low cos s and de eloping sa e y ne s
in he e en o p ice ola ili y.
A speci ic men ion in e ms o ade and po e y needs o be made abou ade in
ag icul u al goods. Madagasca has a la ge sha e o he popula ion employed in
ag icul u e (74% o o al labou ; WDI). The e o e, he ag icul u e sec o is key o
po e y educ ion. T ade in commodi ies and ag icul u al goods, wo ca ego ies
p oduced by u al households, is suscep ible o p ice- and wea he - ela ed ola ili y
(And iampa any e al., 2021; Celio e al., 2023). This lea es he poo ulne able o
p ice luc ua ions, which can be add essed by di e si ying expo s (chie ly in e ms o
p oduc s bu also o ma ke s).
Unde he A CFTA, Madagasca ’s expo e s will ha e a i - ee access o a la ge
A ican ma ke . Inc eased sales o adi ional expo s, as well as e-expo s6 o
consume and capi al goods, will lead o g ow h in g oss domes ic p oduc (GDP).
E idence sugges s ha e-expo s ha e a mul iplie e ec on ancilla y se ices such
as anspo , logis ics, packaging and s o age and hus con ibu e o hei g ow h – in
addi ion o spu ing o e all economic g ow h (P akash and Chand, 2022; P oho o s,
2023). Re-expo s a e o en unde es ima ed – and ye hey can con ibu e o inc eased
bene i s om in eg a ion.
The pa ial equilib ium analysis conduc ed in Sec ion 3 sugges s ha , upon en e ing
he A CFTA, Madagasca will impo mo e om o he A ican coun ies. The main i em
o see an inc ease in impo s would be sa dines (p epa ed o p ese ed). This would
amoun o a co esponding loss o a i e enues o a ound $1.5 million. Sa dines
being a ood i em, his inc eased impo could bene i he poo , who will be able o buy
sa dines a a lowe p ice. On he o he hand, he loss o a i e enues may mean ha
he go e nmen has less inance o alloca e o se ices, hus penalising he poo .
The analysis also shows ha he A CFTA is likely o inc ease Madagasca ’s expo s o
una and o ex iles and ga men s o Mo occo and o lea he and wood p oduc s o
Nige ia. As hese sec o s expand, employmen may also g ow, bene i ing he poo .
Joining he A CFTA will also allow Madagasca o boos i s se ices ade, in pa icula
he expo o anspo and ou ism se ices. These sec o s employ many wo ke s,
including hose wi h lowe incomes, and he e o e hei expansion may ha e a posi i e
impac on po e y educ ion.
Impac s on women and you h
The impac s o he A CFTA on gende shed ligh on he impac o he ee ade a ea
on he Malagasy economy and socie y.
T ade libe alisa ion can ha e implica ions o women and you h. T ade can c ea e jobs
and business oppo uni ies, allowing hem o inc ease hei income. An expansion o
ade and p oduc ion can allow young people o en e he labou ma ke , which is a
way o exi po e y (Fox and Gandhi, 2021). Women’s empowe men is associa ed
6 Re-expo s a e expo s o o eign goods in he same s a e as p e iously impo ed; hey a e o be included in a coun y’s expo s.
Madagasca e-expo s goods such as machine y, packaging, and ex ile and clo hing- ela ed goods o he Uni ed A ab Emi a es,
F ance, China, Mau i ius and o he coun ies.
ODI Repo
34
wi h be e nu i ion and educa ion ou comes o child en, which can lead o highe
p oduc i i y and po e y educ ion in he long e m (Ab eha and Ze eyesus, 2021).
The A CFTA has he po en ial o inc ease women’s pa icipa ion in ade, which could
con ibu e o a ise in con inen al GDP by 40%. The Ag eemen can help add ess
challenges acing women and educe gende dispa i ies. A p esen , women-led SMEs
accoun o 60% o A ica’s GDP and gene a e mo e han 450 million jobs (UNECA e
al., 2022).
Madagasca has high pa icipa ion o women in he labou ma ke . In 2022, almos
84% o women aged 15+ we e ei he wo king o in sea ch o employmen (WDI). Bu
women’s wo king condi ions a e gene ally wo se han hose o men, wi h highe
unemploymen a es, highe p esence in he in o mal sec o (21% o he emale
wo k o ce s 16% o he male wo k o ce) and a lowe sha e among wage wo ke s
(13% o he male wo k o ce s 8% o he emale wo k o ce) (INSTAT, 2013). O e all,
women occupy he mos ulne able and leas emune a ed jobs (ibid.). In 2021,
women we e employed in ag icul u e less o en han men (o e 71% o women s 76%
o men) bu mo e o en in indus y and se ices (WDI). Mo eo e , in 2012, women
made up he majo i y (62.4%) o wo ke s in Madagasca ’s special economic zones a
all wage and skills le els (ibid.).
Madagasca has a young popula ion: hal o he Malagasy people a e younge han
20. You h also ace a di icul economic si ua ion: hose be ween 20 and 24 yea s o
age a e o e ep esen ed among he unemployed and he unde employed. You h, in
pa icula hose wi h mo e yea s o educa ion, ace he bigges challenges in en e ing
he labou ma ke (INSTAT, 2013).
The A CFTA could b ing abou changes o women and you h, which depend la gely
on he indus ies a ec ed. Fo ins ance, he manu ac u ing sec o , o which ga men
p oduc ion is a p ominen pa , employs mo e women han men in Madagasca (Mulle
and Kalle, 2023). The e o e, an expansion o he sec o as a esul o an inc ease in
expo s o clo hing o Nige ia could bene i women. Con e sely, mo e men han
women wo k in ag icul u e, ishe ies and anspo (ibid.). An expansion o hese
sec o s is likely o exace ba e gende inequali y. You h a e likely o be employed in all
sec o s, hus an expansion o he economy is likely o p o ide mo e job oppo uni ies,
lowe ing en y ba ie s o he labou ma ke .
Impac s on clima e and he en i onmen
Madagasca is one o he low-income coun ies mos ulne able o clima e change.
The ulne abili y comes om ex eme wea he , sea le el ise and ag icul u al
p oduc i i y losses (Wheele , 2011). Mo eo e , Madagasca is ich in biodi e si y,
which is impo an no only pe se bu also o sec o s such as ou ism.
A ica accoun s o less han 4% o o al g eenhouse gas (GHG) emissions bu s ands
o be a ec ed nega i ely by clima e change (Mold, 2022). The A CFTA may ha e
mixed impac s on A ica’s emissions. On he one hand, boos ing ade is likely o
inc ease GHG emissions; on he o he hand, ading wi hin A ica could sho en supply
chains, making ade less damaging o he clima e. Simila ly, on he one hand, A ican
in eg a ion is expec ed o boos indus ialisa ion, which may inc ease emissions
(Coulibaly e al., 2022); i will also p o ide he con inen wi h an oppo uni y o
ODI Repo
35
challenge he h ea s posed by clima e change by shi ing domes ic p oduc ion away
om mining ac i i y and dependence on commodi ies (Songwe and Adam, 2023).
Madagasca is a ela i ely small emi e , accoun ing o 0.1% o global GHG
emissions. Howe e , compa ed wi h coun ies a simila le els o de elopmen , i has
highe emissions pe capi a, owing o de o es a ion. O he his o ical GHG emissions,
81% come om wo sec o s: ag icul u e (39%) and land use, land use change and
o es y (42%). As such, land deg ada ion and de o es a ion a e majo challenges o
Madagasca , caused and exace ba ed by small-scale ag icul u e, ene gy p oduc ion
( i ewood and cha coal), illici logging, mining and li es ock p ac ices ha u he
deple e he coun y’s o es esou ces (IMF, 2022). All hese challenges could u he
a ec he ag icul u e sec o , al eady a ec ed by declining p oduc i i y (p oduc i i y pe
wo ke has al eady allen by $95 pe wo ke o e he pas 20 yea s; ibid.).
Some o he changes b ough abou by he A CFTA may ha e a nega i e impac on
he clima e and he en i onmen . Fo ins ance, he o ecas inc eased in expo s o
una may inc ease he nega i e impac o ishe ies on biodi e si y; inc eased expo s
o wood p oduc s may p omo e u he de o es a ion; and he anspo sec o , which
could expand unde he A CFTA, is no o iously ha d o aba e.
The go e nmen o Madagasca Is aking se e al s eps o comba clima e change:
• A landma k ag eemen wi h he Wo ld Bank: Madagasca ’s Minis y o En i onmen
and Sus ainable De elopmen has signed a landma k ag eemen wi h he Wo ld
Bank’s Fo es Ca bon Pa ne ship Facili y, unlocking up o $50 million o educe
ca bon emissions om de o es a ion and o es deg ada ion be ween 2020 and
2024. This ag eemen will help alle ia e po e y among o es -dependen
communi ies, while educing ca bon emissions.
• Reg eening he island: The Ag eemen will allow Madagasca o sus ainably
inance i s cu en policy o eg eening he island and he es o a ion o o es
landscapes. The cu en p og amme builds on he coun y’s in eg a ed ag icul u e
landscape app oach, which aims o add ess he di ec and indi ec causes o
de o es a ion and deg ada ion and p o ec impo an wa e sheds.
• Conse a ion measu es: P oposed measu es using conse a ion in Madagasca
include expanding p o ec ed a eas and gene a ing income by selling ca bon o se s
o educing emissions om de o es a ion and o es deg ada ion.
The ini ia i e o include a clima e-conscious economic ans o ma ion agenda unde
he A CFTA will help Madagasca educe GHG emissions and adap o he impac s o
clima e change.
ODI Repo
36
5 Policy ecommenda ions
T ade and in es men
The analysis p esen ed in his s udy shows ha he inc ease in Madagasca ’s ade
wi h he es o A ica will be limi ed, gi en ha he coun y’s main ading pa ne s
wi hin A ica a e SADC and COMESA coun ies, wi h which i is al eady in ee ade
ag eemen s. This is in line wi h he esul s o o he s udies (e.g. see As o e Conseil,
2022).
In e ms o impo s, he inc eases o impo s om A ican coun ies a e unlikely o be
e y high, excep o a speci ic ood p oduc (p ese ed sa dines, 160413). Should he
go e nmen wish o keep he domes ic ishe ies indus y p o ec ed, i could include his
p oduc on he sensi i e lis s. This would also p o ec a i e enues. Howe e , as his
is a ood p oduc , inc easing impo s may lowe i s p ice, imp o ing ood secu i y.
Should he go e nmen allow he impo o his p oduc , i should be no ed ha he
p ojec ed e enue loss may be o se by o he e enues, o example VAT and excise
on impo ed goods. The A CFTA Adjus men Fund, se up by A eximbank and he
A CFTA Sec e a ia o suppo he ansi ion o he new ade egime, can also
con ibu e o add essing a i e enue loss. Unde he Adjus men Fund, he Base
Fund is speci ically manda ed o add ess a i e enue losses by using con ibu ions
om A CFTA s a e pa ies as well as g an s and echnical assis ance.
In e ms o expo s, he A CFTA may p omo e he expo o ce ain p oduc s –
namely, una and ga men s o Mo occo and lea he and wood p oduc s o Nige ia.
This is ce ainly desi able and would s eng hen Madagasca ’s posi ion in hese
indus ies. To u he imp o e he compe i i eness o hese p oduc s, Madagasca
should conside ho izon al in e en ions such as imp o ed ade acili a ion and
anspo in as uc u e.
In e ms o ade in se ices, Madagasca could expand i s expo s o A ica coun ies.
While knowledge-in ensi e se ices a e likely o yield he highes bene i s, in he sho
o medium e m Madagasca is likely o expand i s expo s o adi ional se ices such
as anspo and ou ism. The anspo and logis ics alue chain is impo an o boos
ade in he A CFTA, and i is one o he sec o s p io i ised wi hin he ee ade a ea,
and one whe e Madagasca could bene i om con inen al ini ia i es.
Rega ding ou ism, Madagasca is a des ina ion o global ame, bu i does no a ac
many A ican ou is s. This is an unde explo ed sec o ha no many coun ies a e
conside ing unde he A CFTA, and could he e o e become a aluable niche o
Madagasca . Among he po en ial measu es, Madagasca could explo e g an ing isa-
ee access o all A ican na ionals (only some coun ies a e so en i led a he momen )
and p omo e i s ou ism sec o in o he A ican coun ies.

ODI Repo
37
Rega ding in es men , Sec ion 2 no ed ha he e is e y limi ed A ican in es men
in o Madagasca excep o om Mau i ius. Mau i ian capi al has been pi o al in
de eloping he Malagasy ga men sec o (Balchin and Calab ese, 2019), which is now
one o he sec o s likely o expand unde he A CFTA. Lea ning om his s o y, he
go e nmen could y o assess whe he in es men om o he A ican ma ke s could
suppo speci ic sec o s o in e es (e.g. Sou h A ican in es men in o es y, as he
coun y has de eloped o es y o pape and wood indus y; see Calab ese, 2021).
Recommenda ions o digi al ade and e-comme ce
de elopmen
While Madagasca’'s e-comme ce sec o is expe iencing apid g ow h and shows g ea
p omise, he e is a c i ical need o businesses in his space o adap and align hei
ope a ions mo e e ec i ely wi h cus ome needs and expec a ions.
The su ge in e-comme ce unde lines he u gen need o a ailo ed legal amewo k
ha speci ically go e ns online ading ac i i ies. Such a amewo k is i al o
add essing a ange o eme ging issues pe inen o he digi al ma ke place, including
consume p o ec ion, da a p i acy, cybe secu i y and he complexi ies su ounding
digi al paymen sys ems.
Looking ahead, as Madagasca con inues o ad ance i s in e ne in as uc u e and
digi al capabili ies, he e-comme ce sec o is poised o u he expansion. This g ow h
b ings wi h i he esponsibili y o all in ol ed pa ies o os e a well- egula ed digi al
ma ke place. Such an en i onmen no only suppo s echnological inno a ion and
economic g ow h bu also ensu es consume p o ec ion and o e all ma ke s abili y.
Gi en he cu en digi al landscape and e-comme ce sec o in Madagasca , he
coun y’s in eg a ion in o he A CFTA p esen s bo h oppo uni ies and challenges. To
maximise he bene i s and mi iga e he isks associa ed wi h his in eg a ion, especially
in he digi al ade sec o , he ollowing policy ecommenda ions can be conside ed:
• S eng hening ha d digi al in as uc u e: Madagasca ’s in e ne pene a ion
a e is below he sub-Saha an A ican and con inen al a e ages. To enhance
digi al ade, i is essen ial o in es in and expand digi al in as uc u e.
De elopmen pa ne s such as he Wo ld Bank a e al eady ac i e in his space.
• Enhancing digi al li e acy and skills de elopmen : Gi en he challenges in
digi al li e acy and he low li e acy a e, Madagasca should ocus on educa ional
e o ms and p og ammes o imp o e digi al li e acy ac oss all age g oups.
• Adap ing legal amewo ks o digi al ade: To sus ain he g ow h o he e-
comme ce sec o , Madagasca needs o de elop and implemen a legal amewo k
ailo ed o digi al ade. This amewo k should add ess consume p o ec ion, da a
p i acy, cybe secu i y and digi al paymen sys ems. This wo k has al eady s a ed,
and he go e nmen needs o p io i ise implemen a ion.
• De eloping policies o a o dable connec i i y: E o s should be made o
make digi al connec i i y mo e accessible o a b oade segmen o he popula ion.
This includes keeping connec ion cos s low by encou aging compe i ion among
se ice p o ide s and educing he cos s o de ices, o example by educing a i s
on he lowe -cos handse s.
ODI Repo
38
• Le e aging he P o ocol on Digi al T ade: Madagasca is al eady engaging in
he nego ia ions on he A CFTA’s P o ocol on Digi al T ade. Pa icipa ing in he
con inen al ma ke will help he coun y in eg a e in o he digi al economy o he
con inen , enabling businesses o access la ge ma ke s.
• Fos e ing inno a ion and en ep eneu ship: Encou age inno a ion and
en ep eneu ship in he digi al sec o by p o iding suppo o s a -ups and small
businesses engaged in digi al ade. This could in ol e inancial incen i es, ax
b eaks and access o unding.
Recommenda ions on how o mi iga e ad e se social and
en i onmen al impac s
Rega ding po e y, Sec ion 4.1 no ed how he A CFTA is likely o ha e a small
posi i e impac in Madagasca . Inc eased impo s o ood p oduc s, combined wi h
inc eased expo s o ag icul u al p oduc s and o se ices in sec o s ha employ he
poo , a e likely o posi i ely a ec he lowe -income segmen o he popula ion.
Speci ically, ega ding ag icul u e, expo di e si ica ion unde he A CFTA amewo k
can lowe ola ili y and help poo e communi ies build esilience o shocks. This can
be supplemen ed wi h ‘ ade plus one’ policies o imp o e access o elec ici y o u al
households, connec i i y, i iga ion acili ies and links o expo ing ma ke s o small
ade s, a me s and SMEs.
One po en ial challenge is ela ed o a educ ion in a i e enues. These e enues
a e cu en ly used (among o he s) o p o ide se ices o he poo , including heal h
ca e and educa ion. A educ ion in a i e enues may, he e o e, lead in he sho
e m o nega i e ou comes o he poo . Howe e , hese may be o se by he inc ease
in o he e enues (such as excise and VAT) as well as in he employmen and income
oppo uni ies c ea ed by he g ow h o expo s.
Rega ding women and you h, he conside a ions o hese ulne able g oups a e he
same as hose abo e. The expansion in expo s could gene a e g ow h in sec o s ha
would hen c ea e wo k oppo uni ies o women and you h. Fo women in pa icula ,
inc eased expo s o ex iles and clo hing may con ibu e o economic empowe men ,
as women a e o en employed in his sec o .
Howe e , i should be no ed ha inc eased wo k oppo uni ies may no necessa ily
bene i women. Taking up employmen may lead o an inc ease in income bu may
also be unsus ainable o women wi h ca e esponsibili ies. In pa icula , ac o y
employmen in manu ac u ing, wi h i s s ic and egula ed schedule, may be
un easible o e y challenging o women wi h young child en o he elde ly o ake
ca e o . The e o e, an expansion o job oppo uni ies o women should be
accompanied by a simila expansion in suppo in hei ca e esponsibili ies, h ough
he p o ision o se ices ha help hem manage hei wo k and ca e commi men s.
Finally, ega ding en i onmen and clima e impac s, he sec o s ha he A CFTA
could p omo e could all ha e nega i e en i onmen al and clima e ou comes. This is
pa icula ly ue o sec o s such as o es y, which may con ibu e o de o es a ion, o
anspo , which is a ha d- o-aba e sec o . The go e nmen should de elop sec o -
speci ic policies ha add ess he speci ic clima e challenges acing hese sec o s.
ODI Repo
39
Re e ences
Ab eha, S.K. and Ze eyesus, Y.A. (2021) ‘Women’s empowe men and in an and child heal h s a us in
sub-Saha an A ica: a sys ema ic e iew’ Ma e nal and Child Heal h Jou nal 25(1): 95–106.
A eximbank (2018) A ican ade epo 2018: boos ing in a-A ican ade: Implica ions o he A ican
con inen al ee ade a ea ag eemen . Cai o: A ican Expo -Impo Bank.
And iampa any, J.N., Hänke, H. and Schlech , E. (2021) ‘Food secu i y and ood quali y among anilla
a me s in Madagasca : he ole o con ac a ming and li es ock keeping’ Food Secu i y 13(4):
981–1012.
A ming on, P.S. (1969) ‘A heo y o demand o p oduc s dis inguished by place o p oduc ion’
In e na ional Mone a y Fund S a Pape s 16: 159–178.
As o e Conseil (2022) « Assis ance echnique aup ès du MICC pou l’analyse de l’oppo uni é de
l’adhésion de Madagasca à la Zone de lib e-échange con inen ale a icaine (ZLECA ): Rappo
inal ». P oje Pôles In ég és de C oissance e Co ido s (PIC2).
Balchin, N. and Calab ese, L. (2019) ‘Compa a i e coun y s udy o he de elopmen o ex ile and
ga men sec o s’. Repo . London: ODI.
Bu i, M., Vasquez Callo-Mülle , M. and Kugle , K. (nd) ‘TAPED: T ade Ag eemen P o isions on
Elec onic Comme ce and Da a’. (h ps://unilu.ch/ aped) (accessed 6 Decembe 2023).
Calab ese, L. (2021) ‘P omo ing comme cial o es y in Uganda: he expe ience o he T ee
Bio echnology P og amme’. Resea ch Repo . London: ODI.
Celio, E., N si a, R., And ia si ohaina, N. e al. (2023) ‘Assessing a me s’ income ulne abili y o anilla
and clo e expo economies in no heas e n Madagasca using land-use change modelling’
Jou nal o Land Use Science 18(1): 55–83.
Coulibaly, S., Kassa, W., Zeu ack, A. G. and Ma oo, A. (2022) A ica in he New T ade En i onmen :
Ma ke Access in T oubled Times. Washing on, DC: Wo ld Bank.
Echandi, R., Maliszewska, M. and S eenbe gen, V. (2022) Making he mos o he A ican Con inen al
F ee T ade A ea: le e aging ade and o eign di ec in es men o boos g ow h and educe
po e y. Washing on, DC: Wo ld Bank.
EDBM – Economic De elopmen Boa d o Madagasca (2019) « Rappo d’ac i i é 2019 ».
An anana i o: EDBM.
Elsley, T. (2023) ‘A b ie ing on p og ess in he ade nego ia ions o he A ica Con inen al F ee T ade
Ag eemen o he a ilia es o he ITUC A ica’. Lomé: T ade Unions and T ade in A ica.
Fox, L. and Gandhi, D. (2021) ‘You h employmen in sub-Saha an A ica: p og ess and p ospec s’. AGI
Wo king Pape 28. Washing on, DC: B ookings Ins i u ions.
Ghodsi, M., G üble , J. and S eh e , R. (2016) ‘Impo demand elas ici ies e isi ed’. Wo king Pape 132.
Vienna: wiiw.
GSMA (2023) The mobile economy: sub-Saha an A ica 2023. (www.gsma.com/mobileeconomy/sub-
saha an-a ica/).
IMARC G oup (2023) ‘A ica e-comme ce ma ke size, sha e, ends 2023-2028’.
(www.ima cg oup.com) (accessed 4 Decembe 2023).
IMF – In e na ional Mone a y Fund (2022) Republic o Madagasca Clima e Mac oeconomic
Assessmen P og am (CMAP). Coun y Repo 22/342. Washing on, D C: IMF.
INSTAT – Ins i u na ional de la s a is ique (2013) « Enquê e na ionale su l’emploi e le sec eu in o mel
– Enempsi 2012 ». An anana i : INSTAT.
INSTAT (2015) « É ude su les in es issemen s di ec s é ange s à Madagasca ». An anana i :
Banque Cen ale de Madagasca .
ITU – In e na ional Telecommunica ion Union (nd) ‘ITU-D s a is ics dashboa ds. (www.i u.in /en/ITU-
D/S a is ics/Dashboa ds/Pages/IPB.aspx)
ODI Repo
40
Kemp, S. (2023) ‘Digi al 2023: Madagasca ’. Da aRepo al, 14 Feb ua y
(h ps://da a epo al.com/ epo s/digi al-2023-madagasca ).
Lac oze, E., F ühau , A., No dmann, K. e al. (2023) ‘Usabili y and accep ance o a mobile heal h walle
o p egnancy- ela ed heal hca e: a mixed me hods s udy on s akeholde s’ pe cep ions in cen al
Madagasca ’ PLOS ONE (h ps://doi.o g/10.1371/jou nal.pone.0279880).
Lai d, S. and Yea s, A. (1986) ‘The UNCTAD T ade Policy Simula ion Model: a no e on me hodology,
da a and uses’. Discussion Pape 19. Gene a: UNCTAD.
Minis y o Tou ism (2018) « S a is iques du ou isme 2018 ». An anana i o : Minis y o Tou ism.
Mold, A. (2022) ‘A CFTA: he en i onmen al case o he con inen al ee ade a ea’, A ica Renewal,
28 Oc obe (www.un.o g/a ica enewal/magazine/oc obe -2022/a c a-en i onmen al-case-
con inen al- ee- ade-a ea).
Mulle , M. and Kalle, A. (2023) Unlocking he po en ial o women and adolescen gi ls in Madagasca –
challenges and oppo uni ies in inc easing women’s and gi ls’ economic empowe men : cahie 3.
Washing on, DC: Wo ld Bank.
Olan ewaju, O. (2023) (2023) ‘A ican coun ies wi h he mos e-comme ce use s’. Business Eli e A ica,
22 Feb ua y (h ps://businesseli esa ica.com/2023/02/22/a ican-coun ies-wi h- he-mos -e-
comme ce-use s/? =11aedd0e4327).
Oyebamiji, U. (2021)‘'P omo ing digi al educa ion in Madagasca’'. Susa A ica, 12 Ma ch
(h ps://susa ica.com/2021/03/12/p omo ing-digi al-educa ion-in-madagasca /).
P akash, A. and Chand, P. (2022) ‘The po en ial o e-expo s: a p obabili y o Fiji’s ade g ow h’ Asian
Jou nal o Economics and Empi ical Resea ch 9(1): 52–58.
P oho o s, A. (2023) ‘Re-expo : assessing he impac o e-expo companies on sec o s and he
economy’ Jou nal o Risk and Financial Managemen 16(77).
Rapanoel, T.S., Rako omahenina, P.B. and Ramanankonenana, T. (2020) ‘T adi ional ade s. e-
comme ce: does p oduc quali y ha e he same alue? A case s udy o he ci y o An anana i o,
Madagasca ’ In e na ional Jou nal o Enginee ing Technologies and Managemen Resea ch
7(12): 33–44.
Smy no a, T. (2021) ‘Cu en ends in he use o digi al communica ions by en e p ises’. P yazo skyi
Economic He ald.
Songwe, V. and Adam, J.-P. (2023) ‘Deli e ing A ica’s g ea g een ans o ma ion’, in A. Bha acha ya,
H. Kha as, and J.W. McA hu (eds) Keys o clima e ac ion: how de eloping coun ies could d i e
global success and local p ospe i y. Washing on, DC: B ookings Ins i u ion, 233–258.
T ade Unions and T ade in A ica (2021) ‘A CFTA P o ocol on In es men ’. 22 July
(www. adeunionsina c a.o g/unpacking- he-a c a-p o ocol-on-in es men /).
alac (2020) ‘T ade in se ices nego ia ions unde he A CFTA’. Ma ch
(www. alac.o g/documen s/ esou ces/ aqs/3190- ade-in-se ices-nego ia ions-unde - he-a c a-
q-a-ma ch-2020/ ile.h ml).
alac (2023a) ‘S a us o A CFTA a i ica ion’. 6 Sep embe
(www. alac.o g/ esou ces/in og aphic/13795-s a us-o -a c a- a i ica ion.h ml).
alac (2023b) ‘How can he A CFTA P o ocol on Digi al T ade inc ease in a-A ica digi al ade?’ T alac
Annual Con e ence (www. alac.o g/documen s/e en s/ alac/4822- alac-annual-con e ence-
2023-how-can- he-a c a-p o ocol-on-digi al- ade- acili a e-in a-a ica-digi al- ade/ ile.h ml).
UNCTAD – Uni ed Na ions Con e ence on T ade and De elopmen (2017) In o ma ion economy epo :
digi aliza ion, ade and de elopmen . Gene a: UNCTAD.
UNECA – Uni ed Na ions Economic Commission o A ica and TMEA – T adeMa k Eas A ica (2020)
C ea ing a uni ied egional ma ke : owa ds he implemen a ion o he A ican Con inen al F ee
T ade A ea in Eas A ica. Kigali: UNECA.
UNECA – Uni ed Na ions Economic Commission o A ica, A ican Union, A ican De elopmen Bank
and UNCTAD – Uni ed Na ions Con e ence on T ade and De elopmen (2019) Nex s eps o he
A ican Con inen al F ee T ade A ea: assessing egional in eg a ion in A ica. Addis Ababa:
UNECA.
UNECA, Uni ed Na ions Popula ion Fund and In e na ional T ade Cen e (2022) ‘Finalised epo on
ARFSD side e en on ACFTA and gende equali y’. A ica Regional Fo um o Sus ainable
De elopmen , Kigali, 3–5 Ma ch.
Wheele , D. (2011) ‘Quan i ying ulne abili y o clima e change: implica ions o adap a ion assis ance’.
Wo king Pape 240. Washing on, DC: CGD.
ODI Repo
47
Looking a de ailed p oduc le el, Table 6 epo s he op impo ed p oduc s, which a e
bi uminous coal (9%), kni ed ab ics (7%) and mo o ehicles (3%).
Table 6 Madagasca ’s op impo p oduc s om A ica (US$ million)
HS6
Name
2018
2019
2020
2021
2022
270112
Bi uminous coal
47
43
18
62
126
600622
Kni ed o c oche ed ab ics o co on (dyed)
13
16
32
46
47
870421
Mo o ehicles, no exceeding 5 onnes
13
12
9
18
17
271019
Pe oleum oils and oils ob ained om
bi uminous mine als, no c ude
34
21
21
13
16
230990
Dog o ca ood, o he han pu up o e ail
sale, used in animal eeding
1
2
2
10
15
170111
Raw cane suga
1
0
0
0
14
110100
Whea o meslin lou
40
47
39
42
13
220710
Undena u ed e hyl alcohol
24
24
14
9
12
392330
Ca boys, bo les, lasks and simila
8
10
6
7
11
510610
Ya n o wool o animal hai , con aining 85% o
mo e by weigh o wool
9
8
6
9
10
600632
Dyed kni ed o c oche ed ab ics o syn he ic
ib es
1
3
2
4
7
701090
Ca boys, bo les, lasks, ja s, po s, ials
10
6
1
2
7
190219
Pas a, uncooked and no s u ed o o he wise
p epa ed
16
8
8
11
7
481840
Sani a y owels and ampons, napkins and
napkin line s
3
5
6
6
7
731700
Nails, acks, d awing pins, co uga ed nails
4
4
6
6
6
520849
Wo en ab ics o co on, 85% o mo e o
co on
17
17
16
13
6
390210
Polyp opylene
9
6
5
5
6
252329
Po land cemen , e c.: o he
5
5
7
8
5
Res o p oduc s
349
329
291
403
225
Sou ce: Au ho s’ calcula ions using da a om WITS

ODI Repo
48
Appendix 5 De ailed impo
a i s
Table 7 Madagasca impo a i s by p oduc g oup, 2022 (%)
MFN applied du ies
Impo s
P oduc g oup
A e age
Du y- ee
Max.
Sha e
Du y- ee
Animal p oduc s
18.4
8.0
20
0.1
61.6
Dai y p oduc s
18.6
0
20
0.5
8.5
F ui , ege ables, plan s
17.9
0.6
20
0.4
0
Co ee, ea
18.0
0
20
0.1
0
Ce eals & p epa a ions
12.2
15.7
20
11.5
68.6
Oilseeds, a s & oils
9.3
7.4
20
4.8
0.0
Suga s & con ec ione y
11.8
0
20
2.2
0
Be e ages & obacco
19.4
0
20
0.5
0
Co on
6.5
0
10
0.0
0
O he ag icul u al p oduc s
9.6
12.9
20
1.2
86.5
Fish & ish p oduc s
19.7
0.7
20
0.8
1.2
Mine als & me als
11.0
3.6
20
12.8
7.6
Pe oleum
6.4
27.8
20
13.8
96.3
Chemicals
7.3
7.8
20
11.3
41.0
Wood, pape , e c.
12.6
3.1
20
3.0
4.2
Tex iles
15.5
2.5
20
14.4
10.0
Clo hing
19.9
0
20
1.0
0
Lea he , oo wea , e c.
13.2
2.2
20
1.5
3.4
Non-elec ical machine y
6.6
8.3
20
7.9
9.8
Elec ical machine y
10.6
5.1
20
5.0
25.7
T anspo equipmen
10.2
10.7
20
5.0
18.5
Manu ac u es, n.e.s.
12.1
10.4
20
2.4
36.5
Sou ce: WTO
Table 8 shows he a e age applied a i s imposed by Madagasca 's key expo
pa ne s. Sou h A ica, a signi ican expo des ina ion pa ne o Madagasca ,
main ains an MFN applied a i o 7.6%. Mo occo and Kenya le y a i s o 14% each.
E hiopia imposes a a i o 17%. Sudan imposes a highe a i bu accoun s o jus
0.3%. Impo an ly, Madagasca , being a membe o egional ag eemen s such as
COMESA and SADC, bene i s om a i exemp ions in i s expo s o ellow membe
s a es like Sou h A ica and Kenya, p o ided hey adhe e o RoO equi emen s.
ODI Repo
49
Table 8 MFN a i s on Madagasca expo s o i s majo ading pa ne s
Coun y
Expo s
MFN applied (%)
($ ‘000s)
(%)
Ag icul u al
p oduc s
Non-ag icul u al
p oduc s
To al
Sou h A ica
89,066
47.7
8.7
7.4
7.6
Mau i ius
37,663
20.2
1.6
0.7
0.8
Mo occo
14,771
7.9
29.2
11.6
14.0
Kenya
13,692
7.3
24.5
12.7
14.3
Como os
7,954
4.3
14.3
4.6
5.8
E hiopia
4,551
2.4
22.5
16.1
17.0
Tanzania
3,966
2.1
26.0
12.0
13.9
Seychelles
2,746
1.5
7.4
1.7
2.5
Mozambique
2,174
1.2
14.0
9.7
10.3
Egyp
1,499
0.8
Zimbabwe
1,236
0.7
27.0
16.5
18.0
Alge ia
851
0.5
23.7
18.1
18.9
Sudan
603
0.3
30.7
20.2
21.6
Uganda
548
0.3
28.0
16.9
18.4
Malawi
542
0.3
17.4
11.3
12.2
Ghana
529
0.3
15.9
11.4
12.0
Nige ia
466
0.2
15.9
11.4
12.0
Tunisia
374
0.2
30.3
17.8
19.5
Senegal
363
0.2
0.1
0.0
0.0
Rwanda
343
0.2
24.1
11.4
13.2
Sie a Leone
340
0.2
15.9
11.4
12.0
Cô e d'I oi e
308
0.2
15.8
11.5
12.1
Chad
305
0.2
22.4
17.4
18.1
Sou ce: WTO
ODI Repo
50
Appendix 6 T ade in se ices
wi h A ican coun ies
Table 9 Top ade pa ne s, ade in se ices, 2019–2021
Expo s (US$ million)
2019
2020
2021
Sou h A ica
15.79
6.64
7.19
Mau i ius
9.17
3.30
3.24
Angola
8.00
3.04
3.05
Nige ia
7.45
3.28
2.97
Alge ia
6.04
2.51
2.37
Mo occo
5.38
2.26
1.70
Kenya
3.76
1.69
1.39
Cô e d'I oi e
3.28
1.51
1.43
Democ a ic Republic o he Congo
1.86
0.82
0.79
Seychelles
1.80
0.62
0.88
To al o he op 10 coun ies
60.7
25.1
24.1
As a % o he o al
77.2%
76.3%
75.0%
To al A ica se ices expo s
78.7
32.8
32.1
Impo s (US$ million)
Mau i ius
26.23
17.44
21.56
Egyp
21.43
15.52
21.45
Sou h A ica
14.14
9.04
11.66
Mo occo
6.92
4.76
5.12
Seychelles
6.00
3.29
6.19
Libe ia
4.55
3.27
4.05
Tanzania
3.20
1.42
1.68
Kenya
3.19
1.54
1.61
Tunisia
2.97
3.55
4.44
Como os
2.21
1.15
0.28
To al o he op 10 coun ies
90.8
61.0
78.0
As a % o he o al
84.3%
81.4%
84.0%
To al A ica se ices impo s
108
75
93
Sou ce: Au ho s using da a om OECD and WTO BaTiS
ODI Repo
51
Appendix 7 O e iew o e-
comme ce in majo A ican
ma ke s
When conside ing he e-comme ce ma ke in Madagasca wi hin he con ex o he
A CFTA, i is impo an o unde s and he si ua ion o o he A ican coun ies. We
conside in pa icula he main ma ke s (Olen ewaju, 2023):
• Nige ia has a signi ican ly la ge e-comme ce use base, wi h 90.9 million e-
comme ce use s. The Nige ian e-comme ce ma ke is expec ed o g ow a a
CAGR o 12.24% om 2022 o 2027, d i en by ad anced in as uc u e, high
in e ne pene a ion and a g owing numbe o ca d-based paymen sys ems.
• Egyp has 55.7 million e-comme ce use s, and his numbe is g owing apidly. The
coun y’s e-comme ce e enue is p edic ed o each abou $7,909.9 million by he
end o 2023 and o g ow a a CAGR o 14.7% o each app oxima ely $13,677.5
million by 2027.
• Kenya has 22.6 million e-comme ce use s and is known o i s ac i e e-comme ce
sys ems. The Kenyan e-comme ce ma ke is expec ed o inc ease o an
app oxima e olume o $2 billion by 2024.
• Sou h A ica has 27.4 million e-comme ce use s. The ma ke saw a 66% inc ease
be ween 2019 and 2020, eaching o e $1.8 billion.
• Mo occo, wi h 14.7 million e-comme ce use s, has seen a signi ican shi in online
comme cial ac i i ies, especially since he COVID-19 pandemic.
ODI Repo
52
Appendix 8 Pa ial equilib ium
model
This esea ch uses pa ial equilib ium analysis o assess he impac o he A CFTA on
ade (expo s and impo s) and a i e enue. In con as wi h gene al equilib ium,
whe e all ma ke s clea consis en ly and simul aneously, in a pa ial equilib ium model
ma ke s a e balanced independen ly. This implies ha , o example, he impac o a
a i educ ion in he ma ke o whea will be limi ed o ha ma ke . The e will no be
any impac on a subs i u able p oduc and/o in he ma ke o he ac o s used in i s
p oduc ion (e.g. labou ).
The ad an age o pa ial equilib ium lies in i s simplici y, he le el o disagg ega ion
and he accessibili y o he da a needed. I s simplici y gi es a g ea sense o in ui ion
o i s esul s, which acili a es i s in e p e a ion. Mo eo e , om he ope a ion poin o
iew, a pa ial equilib ium model equi es li le and widely accessible da a.
A pa ial equilib ium model can be un wi h highly disagg ega ed da a a he a i line
le el. As a esul , i is possible o di e en ia e esul s be ween a ie ies o p oduc s
and a oid making in e ences om e y gene al esul s abou he e ec s on he
p oduc s ha e ec i ely ma e – as would be he case in gene al equilib ium analysis.
This allows esul s o be ob ained ha ha e conc e e p ac ical implica ions o policy-
making.
The da a equi ed o pe o m he analysis is simple and eadily a ailable. To un a
simple impo demand pa ial equilib ium model, i is only necessa y o access da a on
ade by pa ne , a i s and elas ici ies. Such da a is widely a ailable o any analys
and, mo e impo an ly, he esul s ob ained can be easily ela ed o ac ual igu es.
We used he SMART model (Lai d and Yea s, 1986), which is a ailable om he Wo ld
Bank’s Wo ld In eg a ed T ade Solu ion (WITS). This pa ial equilib ium model
cha ac e ises he impo beha iou o a coun y, allowing esea che s o simula e he
impac o educing he a i applied on he p oduc impo ed om a pa icula sou ce.
The demand s uc u e o he model uses a nes ed app oach. A he op, consume s
demand a composi e p oduc comp ising a combina ion o impo sou ces. This
composi e ollows a s anda d demand unc ion whose sensibili y is go e ned by an
impo demand elas ici y.
The in eg a ion o he composi e p oduc ollows he impe ec subs i u abili y be ween
sou ces app oach (A ming on, 1969). This app oach a oids co ne solu ions and
implies ha a educ ion in a i om coun y A will no dec ease o ze o he impo s
om o he sou ces bu will educe hem based on he le el o subs i u abili y assumed.
As his is a demand-d i en model, supply adjus s based on a p ede ined elas ici y o
supply o impo s. A highly elas ic supply unc ion will end o gene a e pu e quan i y
adjus men . On he con a y, in he case o an inelas ic unc ion, p ices, a he han
quan i y impo ed, will end o adjus . Finally, expo s a e de i ed by simula ing he
impo s o pa ne s.

ODI Repo
53
In his pa icula exe cise, we used Com ade da a, a i s om he T ade Analysis
In o ma ion Sys em (TRAINS) (Ghodsi e al., 2016) and impo demand elas ici ies a
he a i line le el. The SMART model does no allow esea che s o di e en ia e
be ween di e en elas ici ies o subs i u ion and supply elas ici ies. Fo his exe cise,
we adop ed a simple app oach assuming a sligh ly highe subs i u ion (e.g. 1.5) and a
ully elas ic supply unc ion (99).
We assumed ha Madagasca educed all i s a i s ac oss all A CFTA membe s a es
and le unchanged i s MFN a i s o he es o i s pa ne s (in his case, agg ega ed
in o one g oup). Howe e , baseline a i s ook in o conside a ion exis en ade
ag eemen s such as COMESA and SADC. The e o e, he e was no educ ion o a i s
on he impo s om Sou h A ica, o example, as hese we e al eady ze o.
The e o e, a ade and e enue e ec was only expec ed whene e he e was posi i e
ade wi h an A CFTA pa ne , and he a i applied was non-ze o. O cou se, when
he MFN a i was al eady ze o, he e was no simula ion o make.
Madagasca impo s will change as a esul o wo e ec s. Fi s , he educ ion o he
a i s om o he A CFTA pa ne s gene a es a eo ien a ion o impo s in a ou o he
membe s o he Ag eemen . The elas ici y o subs i u ion de e mines he deg ee
h ough which his subs i u ion is made. Second, o al Madagasca impo s g ow
because he a i educ ion has educed he gene al p ice o impo ed p oduc s. The
di e ence be ween hese wo e ec s is conside ed ade c ea ion and wel a e-
enhancing.
The impac on Madagasca expo s is cap u ed by simula ing he e ec o he a i
educ ion gene a ed by he A CFTA in Malagasy expo pa ne s. In his sense,
Malagasy expo s g ow as a esul o he educ ion o he impo du y applied by i s
pa ne on he impo s om Madagasca (and o he A CFTA pa ne s). The model
assumes a pe ec ly elas ic supply unc ion in Nige ia. This app oach in ol es
simula ing each expo pa ne sepa a ely.
ODI Repo
54
Appendix 9 Resul s o he pa ial
equilib ium model
Table 10 Impac s on impo s and a i e enue, op 20 a ec ed p oduc s (US$
‘000s)
HS
code
P oduc desc ip ion
Impo s
Impo
change
Impo
change
(%)
Ta i
e enue
Change
in a i
e enue
Change
in a i
e enue
(%)
160413
P epa ed o p ese ed sa dines,
sa dinella, b isling o sp a s
2,757
1,679
60.9
516
-490
-95.0
900912
Elec os a ic pho o-copying appa a us
1,887
300
15.9
132
-132
-100.0
090111
Co ee, no oas ed o deca eina ed
2,081
279
13.4
84
-75
-89.0
691010
Ce amic sinks, wash basins e c.
1,315
260
19.8
262
-19
-7.3
330499
Beau y, make-up, skin-ca e (including
sun an), n.e.s.
2,184
251
11.5
412
-160
-38.9
621010
Ga men s, made-up o ab ics o el s
and non-wo ens
1,359
169
12.4
271
-57
-20.9
841869
Re ige a ing o eezing equipmen
n.e.s.
708
152
21.5
77
-39
-50.2
761290
Aluminium casks, d ums, cans and
boxes, <300L, lined o hea ed
2,421
147
6.1
436
-51
-11.8
854449
Insula ed elec ic conduc o s
12,375
124
1.0
839
-46
-5.5
481910
Ca ons, boxes and cases o
co uga ed pape
6,697
83
1.2
319
-29
-9.0
854290
Pa s o elec onic in eg a ed ci cui s
and mic oassemblies
3,722
70
1.9
256
-17
-6.7
870431
Gas powe ed ucks wi h a GVW no
exceeding
3,039
58
1.9
182
-16
-8.8
970110
Pain ings, d awings and pas els
execu ed by hand
1,472
56
3.8
183
-25
-13.6
940510
Chandelie s & o he elec ic ceiling o
wall ligh ing i ings
1,302
41
3.1
202
-15
-7.5
870323
Au omobiles wi h ecip oca ing pis on
engine
11,700
35
0.3
1903
-13
-0.7
681310
Asbes os b ake linings and pads
454
29
6.4
82
-18
-21.6
071339
D ied beans, shelled, n.e.s.
303
28
9.2
61
-11
-18.6
392590
Builde s' wa e o plas ics, n.e.s.
1,345
28
2.1
263
-20
-7.5
853669
Elec ical plugs and socke s, o a
ol age no >1.000V
1,299
27
2.1
128
-19
-14.6
320910
Pain s and a nishes based on ac ylic
o inyl polyme s
1,235
25
2.0
105
-7
-6.8
Res o p oduc s
5,381,003
526
0.0
420,889
-256
-0.1
To al
5,440,657
4,367
0.1
427,604
-1,515
-0.4
Sou ce: Au ho s based on pa ial equilib ium esul s
ODI Repo
55
Table 11 Impac s on expo s o Madagasca o Mo occo by p oduc , op 20
p oduc s (US$ ‘000s)
HS code
P oduc desc ip ion
Expo s
Change in
expo s
Change in
expo s (%)
160414
P epa ed o p ese ed una, skipjack and
boni o
1,659.8
2,127.5
128.2
530599
P ocessed amie, e c., n.e.s.; ow, noils
and was e
3,421.7
519.2
15.2
090700
Clo es (whole ui , clo es and s ems)
511.2
380.5
74.4
090500
Vanilla
126.0
107.1
85.0
460210
Baske wo k, wicke wo k and o he a icles
o ege able ma e ials
35.6
95.0
267.0
611010
Je seys, pullo e s, e c., o wool o ine
animal hai , kni ed o c oche ed
43.4
93.0
214.2
611020
Je seys, pullo e s, e c., o co on, kni ed o
c oche ed
40.8
85.7
209.8
091099
Spices, mix u es o wo o same heading
137.1
43.2
31.5
620520
Men's o boys' shi s o co on
15.9
35.9
226.7
620630
Women's o gi ls' blouses, shi s, e c. o
co on
16.4
34.4
209.3
160520
Sh imps and p awns, p epa ed o
p ese ed
17.8
30.8
173.4
620610
Women's o gi ls' blouses, shi s, e c. o
silk
14.2
30.6
215.2
620442
D esses o co on
9.3
18.9
202.5
330129
Essen ial oils (including conc e es and
absolu es)
10.2
17.8
175.0
140190
Vege able ma e ials o plai ing (excluding
bamboo)
300.3
15.4
5.1
611030
Je seys, pullo e s, e c. o man-made
ib es, kni ed o c oche ed
6.0
12.5
209.3
620640
Women's o gi ls' blouses, shi s, e c. o
man-made ib es, kni ed o c oche ed
5.6
11.7
210.4
611090
Je seys, pullo e s, e c. o o he ex iles,
kni ed o c oche ed
4.9
11.0
222.3
620449
D esses o o he ex iles, n.e.s.
4.6
9.6
210.7
620462
Women's o gi ls' ouse s, b eeches, e c,
o co on
4.7
9.5
203.1
Res o p oduc s
217.4
160.3
73.7
To al
6,603.0
3,849.6
58.3
Sou ce: Au ho s based on pa ial equilib ium analysis
ODI Repo
56
Table 12 Impac s on expo s o Madagasca o Nige ia by p oduc (US$
‘000s)
HS code
P oduc desc ip ion
Expo s
Change in
expo s
Change in
expo s
(%)
410422
Bo ine lea he , non- ege able p e- anned (excluding 4108
4109)
15,575.1
6,502.7
41.8
440320
Un ea ed coni e ous wood in he ough
9,570.4
2,243.9
23.4
071339
D ied beans, shelled, n.e.s.
1,235.6
829.5
67.1
410390
O he hides and skins, esh o p ese ed
485.0
112.0
23.1
482090
Blo ing pads, book co e s and o he a icles o
20.9
26.3
125.4
852390
P epa ed un eco ded media o sound eco ding
6.0
5.1
85.8
610910
T-shi s, single s and o he es s o co on
0.9
0.9
104.0
560750
Twine, co dage, opes and cables o syn he ic ib es
1.3
0.5
41.7
843790
Machines, pa s o cleaning/so ing seed/g ain
2.0
0.5
24.0
842199
Machine y, pa s o il e ing o pu i ying liquids o gases
1.5
0.4
27.3
842139
Machine y; o il e ing o pu i ying gases, o he han in ake
ai il e s o in e nal combus ion engines
1.2
0.3
27.6
732399
I on o s eel, able, ki chen o o he household a icles and
pa s he eo
0.5
0.3
64.2
842191
Cen i uges and pa s he eo
0.8
0.2
27.4
330129
Essen ial oils (including conc e es and absolu es)
0.4
0.2
48.5
870892
Mu le s and exhaus pipes o mo o ehicles
0.2
0.1
53.8
610120
Men's o boys' coa s, e c. o co on, kni ed o c oche ed
0.1
0.1
80.0
To al
26,901.9
9,723.2
36.1
Sou ce: Au ho s based on pa ial equilib ium analysis