Madagascar Country Summary

FATF Status

Madagascar is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Madagascar was undertaken in 2024. According to the follow-up Evaluation, Madagascar was deemed Compliant for 9 and Largely Compliant for 14 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective 0 of the Effectiveness ratings.

Madagascar ranks 145 out of 180 countries on the 2023 Transparency International Corruption Perceptions Index, indicating a rise in corruption, particularly within the judiciary, police, and mining sectors. U.S. companies report that corruption hinders their operations, as they must comply with the Foreign Corrupt Practices Act while competing against local firms that often engage in corrupt practices. Despite the establishment of various anti-corruption agencies, investigations into high-level corruption remain challenging, and the government's efforts to combat organized crime are undermined by widespread corruption and insufficient resources.

Madagascar's economy is characterized by a young workforce and rich natural resources, particularly in textiles, mining, energy, and telecommunications. Despite the government's official support for foreign direct investment (FDI), the investment climate is perceived as challenging due to corruption, regulatory hurdles, and a decline in FDI as a percentage of GDP from 22% in 2010 to 10% in 2020.

Madagascar's investment climate is characterized by a welcoming stance towards foreign direct investment (FDI), yet U.S. companies report significant challenges, including widespread corruption and burdensome regulations. While the legal framework allows for 100 percent foreign ownership and does not impose restrictions on foreign investors, the practical experience often involves additional scrutiny and delays in obtaining necessary approvals. The recent decline in FDI from 22 percent of GDP in 2010 to 10 percent in 2020 reflects these ongoing issues.