With a USD 449 GDP per capita in 2017, Madagascar's population is amongst the world's poorest. Yet it holds extensive deposits of minerals. Industrial mining activities in Madagascar include the production of chromium, cobalt, ilmenite, and nickel. Ambatovy Minerals S.A. operates the largest industrial mine. Artisanal and small-scale mining operations employ over 500,000 people across the country and concern mainly gold, precious and semi-precious stones, largely exported to Sri Lanka and Thailand for processing. However, Madagascar is said to be losing millions of dollars annually to illicit trade from its ASM sector. The country is considered to be a new frontier for oil and gas prospecting, but oil exploration remains limited, both on and off-shore. In addition to the share of the extractive sector in total governement revenues, the population is concerned by the environmental impact of the sector on the island's unique biodiversity. 

EITI implementation started in 2008 to shed light on revenues collected by the government. Ten years later and despite a three-year suspension due to political instability, the process has had a meaningful impact on the governance of the extractive sector through its targeted work on license allocation and subnational payments and transfers. The EITI process also provided visibility on the mining sector, including estimates of much government revenue might be lost through illicit gold exports. In June 2018, the EITI Board announced that Madagascar had made meaningful progress in implementing the 2016 EITI Standard. Going forward, Madagascar EITI aims to strenghten environmental reporting, data certification, and transparency around the state's participation in the sector. 

The 1999 Mining Code was modified in 2015 by Law n.2005-021. It encompasses nearly all mining companies operating in Madagascar. QIT Madagascar Minerals S.A., of which Rio Tinto holds 80% and the government holds 20% through the Office of National Mining and Strategic Resources (OMNIS), is governed by a unique "Convention d'Établissement" promulgated in February 1999. All mining companies whose investment surpasses USD 16 million are subject to the Law on Large Investments from October 2002. The Ambatovy project is the only one to date covered by that particular fiscal regime for large investors.

The upstream oil sector is governed by the Petroleum Code and by a 1997 decree, as well as by oil contracts signed between OMNIS, the state-owned agency responsible for managing, developing and promoting Madagascar’s petroleum and mineral resources, and oil and gas companies. In the petroleum sector, a one-time withholding tax of three other taxes is applied during the production phase. During exploration, the fiscal regime is that of common law, stipulated by the General Tax Code.

There have been extensive consultations about the potential reform of the mining and petroleum codes between 2015 and 2017, but the process seems to have stalled in 2018. 

EITI reporting has shed light on the statutory process for the award of extractive licenses, particularly in the mining sector. A moratorium on the award of new mining licenses was introduced in 2011 and led to confusion about the assessment of pending demands. Madagascar EITI commissioned a targeted study on the management of mining licenses and the Mining Cadaster Office's role in 2015, with an updated study in 2017. It contributed to improving the online mining cadastre, which includes an interactive map and searchable database. EITI reporting has also extensively described the award and transfer of mining rights in the artisanal and small-scale sector, given the latter's relevance for the country. The 2016 EITI Report included a comprehensive list of all license holders as of 31 December 2016, both in the mining and oil sectors.

The government does not have a legal framework incentivising the disclosure of contracts. Standard off-shore and on-shore PSC are available on the OMNIS website. 

Madagascar’s EITI published a report on beneficial ownership in March 2018, highlighting the importance of knowing who Madagascar is doing business with and ensuring that revenues benefit the country. Prior to the Opening Up Ownership: Africa conference held in Dakar in October 2018, the multi-stakeholder group set up a committee to implement its beneficial ownership roadmap, including setting up a public beneficial ownership register. The 2016 EITI Report presented the outcome of a national workshop on the issue held in February 2018, where different definitions were discussed. The Report disclosed the legal owners of 31 companies and the beneficial owners of 11 companies. 

Latest EITI reporting showed the volumes and value of production by company, commodity and location, for a total estimated value of USD 647,4 million. Ilmenite, nickel and cobalt were produced at industrial scale by the Ambatovy and the QMM mines. The artisanal and small-scale mining sector represents an important source of employment in the island nation. These operations concern mainly gold, and precious and semi-precious stones, Madagascar being known for its high quality rubies and sapphire. The 2016 EITI Report listed the main buying houses and intermediaries in the gold supply chain. It showed the sharp increase in government revenues following the formalisation of the sector, which in turn had an impact on shares of mining royalties for government agencies and local communities. Madagascar EITI has been partnering with the GIZ and others to improve data collection on the ASM sector. 

The 2016 EITI Report revealed that Madagascar received USD 44,7 million from extractive industry taxation. Estimates showed that the sector contributed to 4,6% of the country's GDP, a significant increase over only three years, from 2,1% in 2013. The start of production by Ambatovy and QMM strongly contributed to the increase. The sector also contributed to almost a quarter of total exports and a fifth of total employment. 

Material revenues are collected primarily by seven government agencies: the Bureau du Cadastre Minier de Madagascar (BCMM), the Caisse Nationale de Prévoyance Sociale (CNaPS), the Direction Générale des Douanes (DGD), the Direction Générale des Impôts (DGI), the Direction Générale des Mines (DGM), the Office National de l'Environnement (ONE) and the Office des Mines Nationales et des Industries Stratégiques (OMNIS).