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's corruption levels have worsened, ranking 145 out of 180 countries in the 2023 Transparency International Corruption Perceptions Index. High-profile cases, such as the conviction of the president's chief of staff for soliciting bribes, highlight the pervasive corruption in sectors like the judiciary and mining. Despite the establishment of various anti-corruption agencies, efforts to combat corruption are often hindered by cronyism and the difficulty of investigating high-level officials.

Madagascar's economy is characterized by a young and growing workforce alongside abundant natural resources, particularly critical minerals. The most promising sectors include textiles, mining, energy, and telecommunications; however, the investment climate is perceived as challenging due to widespread corruption and regulatory hurdles, despite laws allowing for 100% foreign ownership of businesses.

Madagascar's investment climate is characterized by a welcoming stance towards foreign direct investment (FDI), yet it presents significant challenges for foreign companies, including widespread corruption and bureaucratic inefficiencies. Although the legal framework allows for 100% foreign ownership, investors often face additional scrutiny and delays in obtaining necessary approvals, particularly when lacking local partners. The recent decline in FDI from 22% of GDP in 2010 to 10% in 2020 reflects these ongoing issues, alongside new taxes and regulations that further complicate the investment landscape.