Antananarivo, February 22nd, 2024 ¨C Madagascar has been trapped in a cycle of poverty for decades and will face another decade of missed opportunities if conditions for broad-based and sustained growth are not implemented, reveals the released today.
¡°Addressing poverty in Madagascar requires bold pro-growth reform that will improve the business climate, promote competition as well as build human capital, invest in connectivity, access to energy and digital infrastructure, and boost agricultural productivity¡±, said Atou Seck, World Bank Country Manager for Madagascar. ¡°By implementing such measures, Madagascar can create an enabling environment that promotes private sector growth, employment creation, and poverty reduction, ultimately benefiting the entire population."
In 2022, 75.2% of the population in Madagascar lived below the national poverty line MGA 1,477,565 ($335.81)/person/year. The rural poverty rate remains very high at 79.9%, while urban poverty has dramatically increased from 42.2% in 2012 to 55.5% in 2022, particularly in secondary cities. This increase is mostly attributed to the COVID-19 pandemic, high staple food prices, natural disasters, and a growing urban population with few opportunities for decent employment, especially in secondary cities. Despite the increase in urban poverty, rural poverty remains much higher. Poverty levels vary across Madagascar, with Androy in the South having the highest poverty headcount rate. The Northern regions have lower poverty levels due to increased economic activity, such as tourism and vanilla production. In contrast, the eastern side of the country has become an area of high poverty due to frequent cyclones, leaving trails of destruction and loss of assets among households. The Analamanga region has lower poverty rates, but higher levels of inequality. National inequality decreased as urban areas became poorer over the last decade.
Ana Maria Oviedo and Francis Mulangu, World Bank Senior Poverty Economists and authors of the report, found that in this subsistence-agriculture-dependent nation, large families in rural areas live in dire poverty; and children, especially girls, face a future of early marriages and high fertility, trapping them in poverty for generations to come. . Wage work appears as a force of resilience associated with a 10% lower poverty rate. Prioritizing human capital investment and inclusive labor markets are crucial to break the chains of poverty, empowering individuals to navigate towards economic resilience.
Low agricultural productivity and lack of basic services in rural areas, weak human capital, high fertility rates, high vulnerability to shocks, including climate disasters, political instability, and global crises, and lack of economic opportunities are among the persistent factors that sustain and exacerbate poverty in Madagascar. To reverse this trend, the report recommends several pathways for change, including improving agricultural productivity, enhancing market connectivity and resilience, raising firm productivity and service quality in urban areas, investing in more and better human capital, increasing resilience to shocks, and strengthening social safety nets.
