Sunday , 23 June 2024
The production and exportation of mining products represent the main engines of growth to the industrial sector and the main pillars to the country's overall economy. This spectacular development must however not overshadow the consented efforts to boost other potentially promising and equally vital sectors including the job and added value creation process. Still, Industry definitely plays an important role in the economic structure of the nation.

The relevance of the industry in the economy of Madagascar

The national Ministry for Economy issued an assessment of the national situation of the year 2013, and revealed that “the secondary sector has recorded a significant degradation of activities respectively in the chemical and pharmaceutical industries, and in the production of construction materials. On the other hand, mining industries as a whole, and the production or transformation of beverages, wood and textiles have experienced an increase. “The Ministry of Industry conceded that “Madagascar currently has but a low level of industrialization” and that “the industry can not be said to contribute much to GDP compared to the shares of primary and tertiary sectors.” According to assessment of the World Bank, Madagascar’s GDP has been valued to $ 9.9 billion in the year 2012. The secondary sector’s contribution is told to have reached merely 15% of this GDP, against 28% from agriculture alone, and 57% from the tertiary sector. “In 2012, the amount of the added value created by members of the Union of Industries of Madagascar reached MGA 812 billion, the equivalent of 4% of the GDP and 25% of the value added created by the entire secondary economic sector. ” A contribution of such an extent definitely endows the status of the union with decency as a relevant actor in the industrial development process.

Whatever growth or, at least economic, consistency recorded since the formal conclusion of the political crisis in the country is first and foremost the result of fair performance from the secondary sector all alone. In the year 2013, the growth rate was valued to 2.4%, coupled with the year 2012’s 2.5% hight realization rate, slightly lower than the 2.8% forecast by the year 2013’s Finance Act. The member companies of the Union of Industries of Madagascar produced a 25% high contribution to overall tax revenue. “The amount of taxes, royalties, fees and charges paid by members of the Union of Industries of Madagascar in 2012 amounted to 25% of tax revenues,” was emphatically reported for the sake of highlighting the Union’s actual economic relevance. This contribution was collected by the State in form of other than tax revenues (48%), including mining royalties and excise special taxes, and taxes on added value (40%). Income and custom taxes put together make both halves of 12% of the overal collection.

“The manufacturing sector retains its leading position in the economic chart by recording a 7.9% increase of production (against + 5.1% in 2012). Such a growth was generated by the growing power of the mining industry and the agribusiness. The efforts consented by local processing and exportation of nickel and cobalt, as well as the revival of sugar processing activities largely explain this improvement of performance” was reported in the Finance Act of the year 2014 when assessing the economic results of the year 2013. “The prospects of the secondary sector, dubbed as the “leading engine of growth for the year 2014” look more than brilliant as a matter of fact. “Once again powered by mining industries  (74.6%), a + 10.5% increase is expected to emerge by the end of the year. “Nonetheless, the expansion of branches related to agriculture (Agribusiness 4.8% Tobacco processing 3.0%, …) or to construction and public works (Industry of metal 3.0% building Materials 3.3% …)” must not be left trailing behind for so much”, concluded the general assessment.