Madagascar: troubled economy is critical for residents in an election year

Madagascar’s troubled economy will be a major issue for residents as they head to the polls this year.

The government of president Hery Rajaonarimampianina, who is standing for re-election later this year says economic recovery is on course, with economic growth standing at 4.2 percent.

But many in the capital say economic gains have not trickled down to ordinary people, as inflation remains at 7.8 percent, driving the cost of living to an all time high.

Four years ago, Malagasies elected a new president, a move that was meant to end years of political stalemate and restore Madagascar’s economy.

The country has spent the last four years struggling to recover from the economic stagnation of the 2009-13 political transition.

Thirty five-year-old Joseph Razafinilaina, his wife and five children live in this one room home, in one of the poorest neighbourhoods in the capital city, Antananarivo.

Joseph has been unemployed for the last two years. His wife has a sixth child on the way.

Joseph said that although the company that retrenched him pays him 7 USD in compensation every month, the family is financially desperate.

According to the World Bank, the Indian Ocean island which relies primarily on agriculture and tourism, is among the poorest countries in Africa.

GDP per capita is just $420 and half of its children suffer from chronic malnutrition.

The International Monetary Fund (IMF) and other international donors broke ties or cut aid payments to the Indian Ocean island after a coup in 2009, but resumed them after a peaceful presidential vote in late 2013.

But the cash-starved government has been cutting back on infrastructure and social spending in recent years, with about 90 percent of the population now living on less than $2 a day.

“There are things that we can no longer afford to do. We have to tighten our belts a lot more. For example, we used to eat meat at least once a week but now we can only afford to eat meat once every two weeks. We have had to adjust our lifestyle and cut out a lot of things,” said Justine Razafindramanitra, a market trader.

Critics blame the current economic woes on bad leadership and a government that has failed to show any effort to help citizens weather the harsh economic times.

“Those who are in power are not concerned about the interests of the nation, and they are not concerned about the type of government or country that we should have. There has never been a public discussion about it. It’s only a minority that dominate, those in power only look after their own personal interests,” said Lily Razafimbelo, a member of Collective citizens and NGO’s.

As the country prepares to hold elections later this year, the World Bank says political risk remains one of the biggest threats to Madagascar’s economy.

Coralie Gevers is the World Bank country manager in Madagascar.

“There is a big challenge ahead for the country. It needs, the history such as Madagascar has had many crises that have interrupted growth cycle in the past. And thus Madagascar needs to prove itself first, no just to the international community but first it needs to prove to itself that it can have elections, stable elections, peaceful elections in late 2018, that will enable them to continue on implementing reforms, economic reforms, investing for the long term of the country not only in infrastructure but also in human development. And if we see that, we have every hope and every belief that Madagascar will be able to reduce its poverty,” she said.

The government says it wants to hold down inflation to single digits and forecast an average inflation rate of 7.8 percent in 2018, down from an expected 8.1 percent in 2017.

Madagascar had forecast growth of 4.5 percent in 2017 but the Enawo hurricane and insufficient rainfall affected agriculture badly. Tourism was hit by an outbreak of the plague in cities including the capital.

Reuters