weighted score 3.6 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Madagascar
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Madagascar as a sourcing destination.
Labour cost competitiveness
9
Among the cheapest labour in Sub-Saharan Africa. Minimum wages well below USD 50/month in textile and agricultural sectors.
Supply base depth
3
Very limited manufacturing base. Vanilla processing, basic garment assembly in EPZs, and some mining. No deep supplier ecosystems.
Logistics & infrastructure
2
Extremely poor road, port, and power infrastructure. Toamasina port capacity constrained. Near-bottom LPI ranking globally.
Workforce skills
3
Low literacy and technical skill levels outside Antananarivo. Very limited engineering or process manufacturing workforce. French-speaking.
Scalability
6
Vanilla and clove supply can expand within existing smallholder networks. Garment EPZs have some growth capacity. Mining expansion faces infrastructure bottlenecks.
Ease of doing business
2
Bureaucratic complexity, corruption, and political instability create a difficult operating environment. Land tenure is insecure. Rule of law is weak.
Trade access & tariffs
2
EU EBA provides duty-free access. AGOA eligibility for US market. But very few FTAs beyond preferential schemes for LDCs.
Sustainability baseline
2
Over 90% of original forest cover lost. Slash-and-burn agriculture (tavy) continues. Biodiversity crisis. ESG audit infrastructure essentially nonexistent.
Innovation & IP
4
Minimal domestic R&D or patent activity. Some agricultural research (vanilla curing, essential oil distillation). No technology sector to speak of.
Quality standards
3
Quality management systems are rare outside EPZ garment factories and large mining operations. Vanilla grading is informal and inconsistent. Third-party audit coverage is very low.
Labour Cost & Agricultural Exports
Labour Cost & Agricultural Exports
- Labour cost
- Madagascar has among the cheapest labour in Sub-Saharan Africa. Minimum wages in the textile sector are well below USD 50/month, making it competitive for labour-intensive garment assembly and agricultural processing.
- Vanilla dominance
- Madagascar supplies approximately 80% of global vanilla. The SAVA region in the northeast is the primary growing area. Vanilla is the country's highest-value agricultural export, though the supply chain is highly fragmented with thousands of smallholder farmers.
- Garments under EBA
- Madagascar qualifies for the EU Everything But Arms (EBA) scheme, granting duty-free and quota-free access for garment exports. Several EPZ-based garment factories supply European brands, though volumes remain modest compared to Asian competitors.
- Other agricultural exports
- Cloves (Madagascar is the world's second-largest producer), lychees, and essential oils represent secondary export categories. Seasonality and cyclone exposure create supply volatility.
Mining, Infrastructure & Logistics
Mining, Infrastructure & Logistics
- Mining sector
- The Ambatovy mine (nickel and cobalt) is one of the largest laterite nickel operations globally. Madagascar also has graphite, ilmenite (QMM/Rio Tinto), and sapphire deposits. Mining contributes significantly to export revenue but faces governance and environmental challenges.
- Infrastructure quality
- Road, port, and power infrastructure are extremely poor. The World Bank Logistics Performance Index ranks Madagascar near the bottom globally. Frequent power outages, unpaved national routes, and limited cold chain capacity constrain export competitiveness.
- Island logistics
- As an island nation, all international trade depends on maritime freight. The port of Toamasina handles the majority of container traffic but operates with limited berth capacity and outdated equipment. Transit times to Europe are long and routing options are few.
- Population & market
- Population of approximately 29 million, predominantly rural. Domestic consumer market is very small. The economy is subsistence-agriculture-dominated, with limited formal-sector employment outside the capital Antananarivo and the EPZ garment cluster.