COUNTRY PRIVATE SECTOR DIAGNOSTIC - CREATING MARKETS IN MADAGASCAR - For Inclusive Growth - Executive Summary - December 2021

Jul 19, 2026

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Executive Summary of a Country Private Sector Diagnostic for Madagascar, focusing on how to create markets to support inclusive growth. It describes pre-COVID development momentum under the Plan Emergence Madagascar (2019–23) and how the COVID-19 crisis threatens growth, fiscal stability, and poverty reduction. The summary outlines government emergency measures and the role of the World Bank Group in protecting jobs, strengthening SMEs’ access to finance, and identifying short-to medium-term policy priorities through reforms up to three years.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages27

Reading Time1 h 8 min

Executive Summary

Background and development vision

COVID-19 impacts and macroeconomic outlook

Crisis response measures for private sector and jobs

Diagnostic purpose and reform focus

Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public COUNTRY PRIVATE SECTOR DIAGNOSTIC CREATING MARKETS IN MADAGASCAR For Inclusive Growth Executive Summary December 2021 About IFC IFC—a member of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create marketsand opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, [visit www.ifc.org](visit www.ifc.org). © International Finance Corporation 2021. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 [www.ifc.org](www.ifc.org) The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC does not guarantee the accuracy, reliability or completeness of the content included in this work, or for the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon. The findings, interpretations, views, and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the Executive Directors of the International Finance Corporation or of the International Bank for Reconstruction and Development (the World Bank) or the governments they represent. Cover Photo: Felana Rajaonari / World Bank EXECUTIVE SUMMARY Before the COVID-19 pandemic, Madagascar was on an upward growth trajectory and embarking on a reform plan to strengthen competitiveness and secure faster poverty reduction. Over the past five years, political stability translated into muchneeded macroeconomic stability and accelerated growth in a country with a high level of extreme poverty. The country’s development vision as announced in the Plan Emergence Madagascar (PEM) for 2019–23 is economically, environmentally, and socially sustainable development with good governance. The PEM pays particular attention to promoting the private sector and entrepreneurship at all levels and to improving competitiveness in global value chains. This economic revival is threatened by the COVID-19 pandemic, with adverse economic, social, and fiscal impacts expected to result in the first recession in a decade. Gross domestic product (GDP) is projected to contract by 4.2 percent in 2020 (baseline), compared with a 5.2 percent growth pre-COVID-19 estimate. Impacts on the informal sector are expected to be even more severe because of limited access to finance. This outcome would undo three years of consecutive improvement in extreme poverty, with an increase in 2020 to 79.7 percent (from 76.5 percent in 2019; estimates as of February 26, 2021). The government of Madagascar has prepared an emergency response to the crisis—le Plan Multisectoriel d’Urgence (PMDU)—and it is also adjusting the PEM to focus on areas that can spur the economic recovery. The World Bank Group (WBG)1, International Monetary Fund,2 United Nations agencies, and other international finance institutions3 are supporting the government of Madagascar in the crisis response to save lives and protect vulnerable populations, safeguard jobs, reduce immediate financing pressures on companies, and ensure sustainable business growth for the recovery. The support takes into consideration weaknesses in capacity and governance. The government has put in place measures to support the private sector and safeguard jobs, mainly framed

FAQs

What was Madagascar’s growth situation before the COVID-19 pandemic?

Madagascar was on an upward growth trajectory, supported by political stability that improved macroeconomic conditions and accelerated growth. The Plan Emergence Madagascar (2019–23) emphasized private sector development, entrepreneurship, and competitiveness in global value chains.

How has COVID-19 affected Madagascar’s economy and poverty trends?

The pandemic is expected to cause adverse economic, social, and fiscal impacts and lead to the first recession in a decade. GDP is projected to contract by 4.2% in 2020 (baseline), with severe effects on the informal sector and an expected rise in extreme poverty to 79.7% in 2020.

What kinds of actions does the diagnostic intend to support during recovery?

The diagnostic is positioned to inform short-to medium-term policy priorities across rescue, restructuring, and recovery phases. It uses a standardized methodology to identify reforms (up to three years) that can unlock investment and jobs, complementing the Country Economic Memorandum with a sharper private-sector focus.

Jul 19, 2026

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