Madagascar seeks a spike in FDI.
The Government of Madagascar is getting serious about bringing foreign direct investment into the country, examining policies and institutional improvements to encourage investors.
During an Investment Policy Review (IPR) at the United Nations in early December, Government representatives joined with international leaders and potential foreign investors to discuss key policy--namely, that despite promise in the country, significant infrastructure investment inflows are badly needed.
"Madagascar has promising opportunities for foreign direct investment [FDI], but to transform this potential we need investors and infrastructure. The positive results of FDI are far from automatic, especially with regards to achieving sustainable development goals and improving quality of life," said Madagascar's Minister of
Industry and Private Sector Development Narison Rafidimanana, who led his country's delegation to Geneva.
He added, "We are taking the IPR recommendations [to] heart and we ask UNCTAD for support in the next phase of technical cooperation."
UN Conference on Trade and Development (UNCTAD) runs the IPR programme to provide guidance on investment policies. Madagascar's programme focuses on the need to restore investors' confidence in the country. Suggested reforms include a clearer regulatory framework, land security, taxation and criteria for special economic zones.
UNCTAD Secretary-General Mukhisa Kituyi said that, "Madagascar has extraordinary potential to attract and benefit from FDI as it is endowed with rich natural resources, a young population and vast tracts of fertile land," but that such potential contrasts with its disappointing performance in attracting FDI, with inflows below the regional average and declining in the last 10 years.
The Director of UNCTAD's Division on Investment and Enterprise, James Zhan, said that Madagascar needed targeted policies that can have an impact on increasing FDI inflows and on maximising its impact in boosting fiscal revenues, reducing poverty, creating jobs, and building its entrepreneurial capabilities which together determine the capacity of Madagascar to produce goods and services.
Presenting the role of FDI in the Government of Madagascar's investment policy, Harison Randriarimanana, Economic Counsellor of the President of the Republic of Madagascar and Chairman of the Economic Development Board of Madagascar said that, "attracting FDI and building the appropriate legal framework are priorities for the Government. We are in the process of amending legislation to improve predictability, including in such areas as mining, access to land and public administration among others. The recommendations of the IPR will be instrumental to successfully implementing these amendments in a context of political stability."
The IPR meeting, which happens at the behest of a country's Government, was well-attended by member states and investors, however private sector representatives established in the country also highlighted the IPR's findings and recommendations.
Madagascar has extraordinary potential to attract and benefit from FDI.
- UNCTAD Secretary-General Mukhisa Kituyi
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