Madagascar grapples with inflation as it bites

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Inflation
Inflation

This island nation of Madagascar has taken a raft of measures to rein in rising inflation due to internal and external factors.

The measures included the subsidy made by the Malagasy State on the pump price of fuel and the massive importation of rice to cushion the rise in the price of rice on the local market.

The market prices of basic necessities are soaring currently when compared to the same period of the previous years, with the plate of each Malagasy household being affected by inflation.

“We no longer eat three times a day, we only eat in the morning and in the evening, we ignore lunch to cope with the rise in the price of goods,” said Zarina, a mother of three who sells vegetables in Analakely, one of the main markets in Antananarivo, the capital of Madagascar.

“With 100,000 Malagasy Ariary (about 24.75 U.S. dollars), I could fill my basket before, but this time a sum of 100,000 Ariary is not enough for me to make my commission. Almost everything is going up at the market now, sugar, dry weights, vegetables, and eggs. The soap has increased almost 100 percent,” said Mireille, another family mother who bought goods in Analakely.

The price of a liter of oil, which was 4,000 Ariary for the same period in 2018, has risen to 11,000 Ariary at present, while the price of a kilo of beef, which was 12,000 Ariary for the same period last year, is now 19,000 Ariary, according to sellers at the Analakely market.

For rice, which is the staple food in Madagascar, the current price is almost doubled compared to that of 2018, but it remains stable and does not record a very remarkable increase compared to previous months thanks to the massive import of rice made by the Malagasy government at the beginning of the year.

As for energy, in addition to the price of charcoal which has been rising steadily since last year, the price of gas has also risen remarkably at the gas stations, according to the prices published Tuesday by the Ministry of Industry, Trade and Consumption.

A recent report of the Council of Ministers, a weekly meeting between Madagascar’s president and his government members to make important decisions on the country’s life, said the current inflation in Madagascar is driven by the increase in sea freight, the rise in the prices of oil in the international market, the drop in world production, and exports and the consequences of the conflict between Russia and Ukraine. And domestically, inflation is expected to be driven by the consequences of the health crisis, road deterioration following the recent cyclones, insufficient local production and abuse by the traders.

General inflation in Madagascar in 2021 was 5.81 percent, according to the latest consumer price index (CPI) published by the national institute of statistics (INSTAT).

Economist Freddy Andriamalala, a research professor at the University of Antananarivo, explained to Xinhua that Madagascar can do nothing without globalization. “We have to find a solution because inflation causes extreme poverty among the population. Their purchasing power is decreasing.”

While encouraging the subsidy made by the Malagasy State on the pump price of fuel, Andriamalala praised the massive importation of rice which has cushioned the rise in the price of rice on the local market, and also the safety net given by the Malagasy State to the poorest. “The Malagasy state must also encourage the increase of local agricultural production,” he added.

Andry Vola Razafindralambo, the president of PMH, a consumer rights protection association, proposed to exploit local production, facilitate the granting of land to farmers, and reduce the tax paid by entrepreneurs, which is also a factor blamed for the increase in the market prices.

During the council of ministers, Malagasy officials decided to organize a consultation with businesspeople and industrial producers with a view to capping the prices of basic necessities on the market to help the Malagasy population. The Malagasy government will also strengthen the monitoring of market prices of goods and punish those who abuse their prices and do not respect the law of supply and demand.

On April 1, 2022, the Minister of Industry, Trade and Consumption Edgard Razafindravahy met the main businesspeople in the country and associations for the protection of consumer rights in Madagascar. They decided to revoke import licenses for importers and close stores of traders who will not respect the cap on prices for basic necessities. Enditem

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