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 is grappling with pervasive corruption that significantly hampers governance and economic activity, particularly affecting sectors like the judiciary, police, and mining industry. Despite the establishment of various anti-corruption agencies, the effectiveness of these bodies is undermined by widespread impunity and the influence of high-level officials, making it challenging to address both petty and grand corruption effectively.

The country also faces serious challenges related to organized crime, including human trafficking, illegal logging, and drug trafficking, with state-embedded actors often complicit in these activities. Efforts to combat these issues are hindered by a lack of resources, ineffective law enforcement, and a judiciary influenced by political pressures, leaving civil society organizations to struggle against corruption and organized crime while facing intimidation and threats.

Madagascar's economy is characterized by a young workforce and rich natural resources, particularly in critical minerals, textiles, mining, energy, and telecommunications, which are seen as key growth sectors. Despite the government's official stance welcoming foreign direct investment (FDI), the investment climate is perceived as challenging due to bureaucratic hurdles, widespread corruption, and a lack of transparency in regulatory processes. Although recent legislative updates aim to improve the investment framework, foreign investors continue to face significant obstacles, including unpredictable government approvals and additional scrutiny, which hinder the overall competitiveness of Madagascar's economy.