REVIEW OF THE CONTRIBUTION OF THE MINING INDUSTRY SECTOR TO THE GROWTH AND ECONOMIC DEVELOPMENT OF MADAGASCAR.

GOVERNANCE OF MINING

Since 1998, Madagascar has undertaken several structural reforms aimed at boosting the mining industry. These reforms include the adoption of the National Mining Policy Framework Document (1998, revised in 2014), the Mining Code (1999, updated in 2023), the Law on Large-Scale Mining Investments (2002, amended in 2005), as well as joining the Extractive Industries Transparency Initiative (EITI) in 2008. Despite these efforts, the effectiveness of the reforms remains controversial: on the one hand, institutions such as the Chamber of Mines and the World Bank consider these measures as levers for growth; on the other hand, Civil Society Organizations (CSOs) and a segment of public opinion criticize their limited socioeconomic impact. In this context, this study aims to fill a gap in the scientific literature by mobilizing a hypothetico-deductive approach based on time series modeling over the period 1998–2022. The empirical results obtained reveal that a 1% increase in Foreign Direct Investment (FDI) in the mining sector results in an increase of only 0.172% of the Gross Domestic Product (GDP) and a marginal reduction of 0.04% in the poverty rate. Furthermore, mining value added has a limited influence on the real exchange rate, of the order of 0.034%. These findings highlight a relatively weak impact of the mining industry sector on macroeconomic indicators, despite its strategic potential. The analysis thus suggests the need to rethink the mechanisms for redistribution and local anchoring of economic benefits from mining investments, with a view to sustainable and inclusive development in Madagascar.

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