The Quarterly Newsletter

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Bartholomew Nichols
5 years ago
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Inflation Rate (%) Antananarivo 10,3 - AfDB 4,2% - AfDB 412 - IMF 6,8% - AfDB Currency

AfDB 25,6 Millions AfDB Minimum Wage Decree No.

USD 54,7 Land area 581,795 Km2 Source: 2017 Data no out of Global Peace Index 72 144

International - Corruption Perceptions Index World Economic Forum - Global

1 The Quarterly Newsletter June 2018 MADAGASCAR ECONOMIC INDICATORS AGGREGATES KEY RANKINGS Capital city GDP (billions USD) GDP annual growth rate GDP per Capita (USD) Inflation Rate (%) Antananarivo 10,3 - AfDB 4,2% - AfDB IMF 6,8% - AfDB Currency EUR 1 = MGA 3 512,82 USD 1 = MGA 3 116,11 Central bank's policy rate Population 9% - AfDB 25,6 Millions AfDB Minimum Wage Decree No (the Decree) Non agricultural: MGA 168,02 USD 53,9 Agricultural: MGA 170,42 USD 54,7 Land area 581,795 Km2 Source: 2017 Data no out of Global Peace Index United Nations Development Programme - Human Development Index Transparency International - Corruption Perceptions Index World Economic Forum - Global Competitiveness Report Doing Business - Ease of Doing Business overview p2-3 News p4-5 Testimonies p Source: 2017 Data contacts p8 1

2 OVERVIEW Why invest in Madagascar? 1. Potential access to a global market of more than 600 million consumers Madagascar is a member of the Southern African Development Community (SADC), COMESA (Common Market for Eastern and Southern Africa) and IOC (Indian Ocean Commission), regional free trade organizations totaling more than 600 million potential consumers. Investing in Madagascar will give investors access to these high-potential free trade zones. In July 2017, Madagascar signed the Tripartite Free Trade Agreement (TFTA), which combines SADC, COMESA, and the East African Community (EAC), and includes 57% of the total African population. 2. Preferential customs arrangements to facilitate access to US and European markets Madagascar eligibility to the African Growth and Opportunities Act (AGOA) of the United States and the signature of the EPA (Economic Partnership Agreement) with the European Union allow companies in the country to export to these markets duty-free. This is reflected in a strong trade dynamic from Madagascar. Exports to the United States raised 12.8% in 2016 and 44.6% to the European Union. 3. Multiple investment opportunities in high potential areas Through a bold sectoral strategy geared towards promoting sectors with strong comparative advantages, Madagascar offers a range of opportunities in tourism, agribusiness, mining, textiles, ICT, renewable energy and infrastructure. 4. Competitive factor cost Madagascar has many competitive advantages, including labor cost (US $ 54/month), the cost of electricity (US $ 0.14/kWh in 2016) and water (US $ 0.30/m3 in 2016). For industrial use, lease price for industrial sites (US $ 2.00/m²/ month), availability of «natural» materials and inputs at low cost, ease of exploitation of resources (e.g.: open pit mines, natural conditions for agriculture and infrastructure), etc. Also, investors can take advantage of the value Internet connection, second in terms of speed in Africa. 5. A legal and tax framework for investment To encourage local and foreign investment, by 2016, more than 20 reforms have been implemented in the areas of business law, trade justice, import-export, business start-up, facilitation of credit, taxation, etc. Various laws favoring investments have been promulgated, in particular the Law on Free Zones and Companies, which allows freehold companies to benefit from exemptions from customs duties and VAT on imports; and Income Taxes for the first 15 years. 6. Commitment by the Malagasy government to structural projects The Malagasy Government relies on Public-Private Partnerships. Several ambitious infrastructure projects are being implemented in the telecommunications sector, with the installation of more than 12,000 km of fiber optic network over 14,000 km of radiorelay networks. The energy sector includes several projects for the construction of hydroelectric power plants, including Volobe s $ 500 million, project generating 110 MW. The next stage of the creation of Special Economic Zones, is an integrated textile industrial zone of + 100ha. 7. An island rich in natural resources Madagascar is endowed with potential mining, agricultural, energy, fisheries. Particularly dense and varied, which only need to be exploited. The uniqueness and richness of its biodiversity (the biodiversity rate is 90% (# 1 in Africa), and the endemicity rate is the highest in the world) are also an asset for tourism investments. Source : Economic Development Board of Madagascar 2018

3 Exports to the United States Top five (05) products destinations from Madagascar Country Exported value in 2016 (USD millions) Exported value in 2017 (USD millions) France 537, ,405 United States of America 292, ,721 Germany 189, ,729 China 144, ,394 Netherlands 98, ,400 Source : ITC calculations based on Direction Générale des Douanes de Madagascar and UN COMTRADE statistics With rise of up to 19% between 2016 and 2017, Madagascar total exports are gradually improving. Of these, exports to the USA particularly express a sizeable rise with up to 44% from 2016 to 2017 reaching almost the same value exported to France. It is the beginning of an opening to the large US market and opportunities offered. Evolution of exports to the USA (USD millions) Exports in USD millions 2018 (jan-april) % % US non AGOA US AGOA US non AGOA US AGOA Source: AmCham calculations based on Direction Générale des Douanes de Madagascar statistics (2018 : jan to april) 3

NEWS May 15th, 2018 Training: Handicraft market access to the USA May 15th, 2018 Training: How to maximize trade show participation From the early beginning of the project to date, handicraft

Exports in the sector are just starting but still, there is a lot to master: standards, procedures, budgeting, protection in raw materials The training intended to detail requirements in handicraft

4 NEWS May 15th, 2018 Training: Handicraft market access to the USA May 15th, 2018 Training: How to maximize trade show participation From the early beginning of the project to date, handicraft products are one in which Malagasy companies have been found the most competitive. Exports in the sector are just starting but still, there is a lot to master: standards, procedures, budgeting, protection in raw materials The training intended to detail requirements in handicraft quality and standards and exports procedures. Red Sand and SEAM managers were invited to share their approach experience and to inform exporters on quality requirements within international market. The SGS Company representant explained services they can provide in the handicraft sector. In addition, companies also expressed their worries on the handicraft sector challenges. The issues identified remained: Raw materials protection and production: threat from Asian countries in which China Craftmen and women trainings Investment in the sector All in all, 39 individuals from 28 companies and 02 public entities attended the training session. Trade shows are almost mandatory when it comes to develop Malagasy companies market access to the USA. This is a crucial step that if well managed can lead to orders and interest to Malagasy products. The training was organized by AmCham/ARC-M on May 15th, The main objectives were to introduce the upcoming tradeshow supported by the USAID EATIH: IFT Food Expo 2018 Chicago, ILLINOIS July 15th to 18th, For this purpose, the AmCham team gave practical tips in terms of accommodations, booking, transport, mailings and connections, and mostly brief the participants about the show. A testimonies and sharing time was also dedicated for attendees to ask questions and share experiences. The training was enriched by collaboration with intervention from the World Trade Center Antananarivo team which presented the 2018 Africa Trade and Investment Global Summit ATIGS they organized in June individuals from 24 companies and 2 public entities attended the training. 4 The Quarterly Newsletter - June 2018

June 05th, 2018 Second Strategy and Workshop session on intra regional trade and AGOA exports The session was the opportunity for supported companies to share their feedbacks on what you have

During the 2 years mission, some came onto trainings, some were visited, and some even went to international trade shows to the USA. Supports where received at different levels.

5 June 05th, 2018 Second Strategy and Workshop session on intra regional trade and AGOA exports The session was the opportunity for supported companies to share their feedbacks on what you have experienced so far with USAID EATIH, AmCham and the AGOA Resources Center. During the 2 years mission, some came onto trainings, some were visited, and some even went to international trade shows to the USA. Supports where received at different levels. In addition, suggestions and improvements that they would like to receive were also discussed. The ARC-M was assigned by the Hub to propose further improvements to the current National strategy on AGOA for Madagascar, and produce a paper outlining the steps to implement a program to increase intra-regional trade and AGOA exports with particular emphasis on East Africa and Indian Ocean Islands Region. Step ahead after the first published proposal in December 2017, a second one was developed with more focus on intra regional trade. Considering the context in which economical and political environment are definitely linked, were also discussed the new challenges on intra regional trade and AGOA exports and benefits we can receive. The participants also considered a 7 years strategy as the AGOA advantages end in One of the results following discussions with the interdepartmental committee on AGOA is an Memorandum of Understanding that was developed with AmCham in order to facilitate information sharing and actions efficiency as part of AGOA law promotion. June 19th, 2018 ARC-M Post mission feedback seminar June 2018 closed the second year mission of the AGOA Resources Center in Madagascar with a feedback seminar held at Infinithé Ivandry on June July 15th to 18th, 2018 Trade show: IFT Food Expo Chicago IFT that stands for Institute of Food Technology hold its Annual Event and Food Expo in Chicago this year. It is one of the largest events of its kind bringing together science of food professionals from around the globe representing all segments of the science of food profession research and design, ingredients, safety and quality, technology, equipment, processing, packaging, manufacturing, suppliers and buyers, policy makers, and academics all converging with the intention to inspire and transform collective knowledge into innovative solutions to help advance our planet s food safety, nutrition, and sustainability This year, the show registered exhibitors from all over the world, and received more than attendees. With this in mind, two supported companies: Moringa Wave and SAVA Export were physically represented whereas the AmCham team gave visibility to Madagascan companies namely MADEPICES and Havamad. 5

TESTIMONIES Madagascan Companies Testimonies The following companies are part of those that received support from the USAID East Africa Trade and Investment Hub and AGOA Resources Center at AmCham

MADEPICES Madagascar Specialty foods Kareen Nicolessi Managing director Within the ARC-M and Hub s support, we benefited from a personal training in order to process properly on HACCP certification.

6 TESTIMONIES Madagascan Companies Testimonies The following companies are part of those that received support from the USAID East Africa Trade and Investment Hub and AGOA Resources Center at AmCham Madagascar. The mission is so grateful for their sharing and feedback. MADEPICES Madagascar Specialty foods Kareen Nicolessi Managing director Within the ARC-M and Hub s support, we benefited from a personal training in order to process properly on HACCP certification. In addition, the team advised and helped us to obtain our FDA number. Last but not least, attending to Natural Products Expo West Show was a wonderful opportunity to know better the US market In terms of specialty food, the major problem we met is the Organic Label requested by all potential buyers that we ve reached: we have to get our suppliers certificated and to keep an eye on the producers before getting our workshop s label. This is a big expense that we cannot afford immediately. Maybe work on the suppliers by awareness raising campaigns and trainings in order to convince them about quality issues and market development. Also keep us informed the soonest as possible of all AGOA s moves in order to get well prepared to events. Make a strong lobby toward public sector to get a real cultural identity to show abroad» Kareen Nicolessi More at: madepicespilipilidockantananarivo/ GROVE Industry Madagascar textile Rolland FELIX Shipping & Logistics Manager Since its creation, our company has always been AGOA oriented. The AGOA market has allowed us to work with big potential customers such as GAP, LEVI s, DOCKERS, KMART and many others, and this has been an interesting annual turnover for us. In seven (7) years, from 2002 to 2009, we reached the number of more or less 3000 jobs created. The US decision to stop AGOA Malagasy in 2009 taught us that political and economic affairs should not be confused because they did not bring good results. It was difficult to restore trust between the remaining companies and their buyers. Now that Madagascar is re-eligible to AGOA, there is a must to set up a resource center, market access training and AGOA knowledge sharing. An easy access to the search for buyers is very desirable because Madagascar, well known for its values, should not have any difficulty finding and /or contacting potential buyers in each area of activity. Rolland FELIX More at: 6 The Quarterly Newsletter - June 2018

Red Sand Madagascar Handicraft Ludmilla Chan Ravelojaona Managing director LadahCraft Madagascar Handicraft Farah Rakotoarison CEO Since being among of The Amcham members, we have benefited a lot

You never are fully aware of the issues of not being prepared to face US customer needs until you have been trained to do so.

Investment Hub. Participating to the shows we have been invited to, were the concrete side of all the trainings we have been doing.

7 Red Sand Madagascar Handicraft Ludmilla Chan Ravelojaona Managing director LadahCraft Madagascar Handicraft Farah Rakotoarison CEO Since being among of The Amcham members, we have benefited a lot from the trainings that were organized. Useful tips and efficient guidance where shared on entering the US Market. You never are fully aware of the issues of not being prepared to face US customer needs until you have been trained to do so. But definitely the best part of all the experiences we have had with the The Amcham and The ARC-M are the shows we have been fortunate enough to do with the support of East Africa Trade and Investment Hub. Participating to the shows we have been invited to, were the concrete side of all the trainings we have been doing. But it also allowed us to expand our businesses by gaining new sustainable customers. Being in the handicraft business our sector s major problem would be the fact that it is still very difficult to gain US customer s trust. A lot of Companies willing to export in the US are not represented there, that makes the challenge to enter the US Market even harder. Globally, though the Amcham and The ARC-M are doing a really helpful job so far, there is always something to improve. On that matter and related to my previous statement, their support can be improved through helping to facilitate US Customers trust towards Malagasy Companies and the rest is up to those Companies themselves. With more than 15 years experiences in products range from craft and home decoration, made from raffia, to bags and shoes, made from leather, Ladah Craft has acquired experiences through almost any training available at the AGOA Resources Center/ AmCham. Also, following visits and trade shows participation since 2015, we now know that our products fits to the US market. Thus, as the European one is saturated, we want to focus on USA. We got company visits reinforced with advices from the AmCham and Hub s teams. We participated to the MAGIC show in 2015 and in 2016 and to Origin Africa in 2015 and after many readjustments, we now aim, with Jewels and Precious Stones, New York Now on August The Hub as particularly helped on the establishment of the Business Plan for As we know that the quality we provide fits the market, the vision for us is to get more industrial machines and extend our production capacity. Farah Rakotoarison More at: LADAH CRAFT Madagascar Ludmilla Chan Ravelojaona More at: 7

My Mitoo Madagascar Textile (fashion designer) Michella Ramitomboson CEO & Founder I enjoy and learnt a lot with the AGOA Resources Center/AmCham trainings.

8 My Mitoo Madagascar Textile (fashion designer) Michella Ramitomboson CEO & Founder I enjoy and learnt a lot with the AGOA Resources Center/AmCham trainings. It is a real eye opening to new opportunities to upscale in quality as a person and as a company. Very encouraging to keep going and bring innovation in our Brand, so I appreciate it. Plus, the great networking of different level of company also help to see big for the small companies steps to afford market access to the USA. You make dreams seems possible to achieve. We wish to have guidance in what/where is best and suits our profile. Another suggestion is having a close follow up for small companies. I actually am self taught on my business and would love to have a closer training approach in the future. Michella Ramitomboson The AGOA Resources Center warmly thanks all supported compagnies for their trust during these two years mission. Thank you More at: For more information, please contact the followings : Scott Reid Executive Director - AGOA Resources Center sar.madagascar@gmail.com Lauriane Razanajatovo General Manager - AGOA Resources Center tianalisoa@gmail.com Elodie Rabenivo Project officer - AGOA Resources Center elodie@amcham-madagascar.org Hassan Alwalid Information - AGOA Resources Center info@agoarc-madagascar.org Lalaina Rakotoarison Finance Manager - AGOA Resources Center es@amcham-madagascar.org Phone number: +(261) Address: Explorer Business Park - C1 Building Ankorondrano - Antananarivo - Madagascar 8 The Quarterly Newsletter - June 2018

Larbi BOURABAA Maroc Export. World Export Development Forum 9-12 September Chongqing, China

Larbi BOURABAA Maroc Export. World Export Development Forum 9-12 September Chongqing, China Larbi BOURABAA Maroc Export World Export Development Forum 9-12 September 2010 - Chongqing, China I- Morocco s Sectoral development plans : engines of growth II- What are our goals III- Our services Example: