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Trade and Regional Integration in Madagascar: FY2019/20

Trade and Regional Integration in Madagascar: FY2019/20

Trade and Regional Integration in Madagascar: FY2019/20
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  • Last Updated Apr 22, 2020

Trade and Regional Integration in Madagascar: FY2019/20

Madagascan exports have been growing slower than imports during the period from 2015 to 2018. This has not led to a significant deterioration in gross official foreign exchange reserves supported by the slight depreciation of the MGA. The growth in imports has led to a minor deterioration of Madagascar’s current account balance. Madagascar is still dependent on agriculture-based exports which are also its top traded goods with its neighbours in the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). However, Madagascar is poorly integrated in both COMESA and SADC; and its trade is unbalanced due to the persistent trade deficit in both regions which turned into a small surplus in COMESA. This suggests that there is significant room for Madagascar to increase its exports to both regions and Madagascar might want to rebalance its trade towards greater reliance on COMESA in order to reduce its overreliance on SADC. But rebalancing Madagascar’s trade in the regions might be restrained by structural factors like geographic proximity.

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