Madagascar

EITI Status Yet to be assessed against the 2016 Standard
EITI Member Since 2007
Latest Data From 2011
Website EITI Madagascar

Overview

Industrial mining activities in Madagascar include the production of chromium, cobalt, ilmenite, and nickel. Small scale and artisanal mining operations, which employ over 500,000 people across the country, concern mainly gold, precious and semi-precious stones. Most of these commodities are produced and exported illegally. 

Madagascar is said to be losing millions of dollars annually to this illicit trade. The EITI process provides some visibility of the mining sector including how much gold is leaving the country and some indications of how much revenue might be being lost.

Beneficial ownership disclosure

Madagascar’s 2014 EITI Report confirms that there is no public register of beneficial ownership in the country and that the Ministry of Commerce only collects information about shareholders. 22 companies voluntarily provided information on legal owners. In some cases, physical persons are listed as owners, but the report does not confirm whether these are beneficial or legal owners.

The local communities’ anger was often directed towards the mining companies. After the publication of the EITI Reports, people began to realise that the management of their resources is a shared responsibility between companies, the central and local governments. When people saw how much companies paid to the central government in taxes and royalties in 2010 for example, they began to ask questions about how this money is used and who is benefiting from it.
Daniella Randriafeno, Madagascar EITI National Coordinator

Production

Project Ambatovy and Rio Tinto have significant mining operation in Madagascar, producing nickel and cobalt at the industrial scale. The artisanal and small scale mining sector is an important source of employment in the island nation. These small operations concern mainly gold, precious and semi-precious stones, which are produced and exported illegally. Information in the 2014 EITI Report estimates significant loses in government revenues due to mineral smuggling. The 2014 EITI Report does not provide data on production. 

Natural Resources

Natural Resources 

Madagascar is known for its high quantities of rubies and sapphire. The earth covering this island nation is rich in diverse minerals including cobalt, gold, ilmenite, nickel, and precious and semi-precious stones. Madagascar also has some oil reserves.

CommodityReservesUnitSignificance

Revenue collection

The latest EITI disclosures (2013) show that Madagascar received USD 192 million from extractive industry taxation. Estimates show that the extractive sector contributed to 2.1% of the country’s GDP, a significant increase from 0.7% in 2012. This increase is a result of the operations of Rio Tinto and the Ambatovy mining project. 

Initializing chart.

Revenue allocation

Companies pay taxes both at the central and local levels, where they operate. In the Tamatave and Fort Dauphin municipalities, for example, mining companies were the largest taxpayers. Citizens in these municipalities are given a say in how revenues from their natural resources are used through participatory budgeting. This allows the population to have a say in how to allocate revenues from mining activities. These funds were used to pay salaries of the local staff at the commune, and infrastructure developments for the local communities (construction of schools, road repairs and water).

Innovations

​The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.

  • EITI process has influenced the government’s decisions to implement reforms in the management of the gold sector.

  • EITI conducted a study on mining titles at the Mining Cadaster office of Madagascar. Concrete recommendations from the study led to the nomination of a new director and the official publication by the Ministry of Mines of criteria for assessing bids of approximately 4000 pending permits.

  • EITI conducted a study on the management geological information to take stock of the geological infrastructures of the country.  

  • Outstanding payments due to local communities are also disclosed in the EITI reports which are used by local communities to request payments from central authorities.

  • Citizens in the municipalities, where mining activities take place, are given a say in how revenues from their natural resources are used through participatory budgeting.

  • The 2013 report included information on both mandatory and voluntary social payments.

Implementation

Governance

Mr Ying Vah Zafilahy, Minister of Strategic Resources chairs the National Committee, which has the mandate to oversee EITI implementation in Madagascar. Ms Tolotrandry Rajo Daniella Randriafeno, former Minister of Mines, was appointed EITI National Coordinator in December 2014. The EITI-Madagascar National Committee was created in July 2010 and renewed in April 2013. The three constituencies: government, civil society and oil, gas and mining companies are equally represented in the 21 members’ national committee. The role, responsibilities and rights of the multi-stakeholder group are defined in its TORs approved by Prime Ministerial decree N° 5615/2013 of 15 March 2013.

Validation

Madagascar's Validation against the Standard will commence on 1 September 2017. The country is a candidate under the 2011 Rules.

Timeline