Talking Business: What it takes to be successful in Madagascar
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How we made it in Africa asks Mamy Rakotondraibe, DHL country manager, about Madagascar’s untapped business opportunities, as well as the challenges investors can expect to encounter.
Describe some of the trends impacting Madagascar’s business environment.
The local currency lost about 25% of its value against the euro in 2015. This had a positive impact on the competitiveness of exporters, mostly in the textile and agricultural sectors. As a result, DHL received an increased demand for outbound shipments compared with 2014.
On the other hand, importers faced more difficulties in growing their businesses, with many opting to procure cheaper products of slightly lower quality, in some instances. The business community in Madagascar is known to have great resilience. Finding ways to adapt as quickly as possible to a changing business climate is the only way to operate successfully in a highly challenging environment.
What is the greatest myth about doing business in Madagascar?
It is often thought that local consumers are willing to accept low quality products and services, with price being the main, if not the only, decision-making factor. But the reality is different. Demand is increasingly linked to not only good customer service but also respect for safety and security regulations. Companies that have succeeded over the past decade have invested heavily in providing high quality products. Being a developing country doesn’t mean people are willing to accept average service and products. It is a great misconception.
Identify the biggest untapped business opportunity.
Mining remains the biggest opportunity for investors. But there are several legislative reforms still needed and the authorities have the opportunity to create a real long-term vision for the sector to enable a genuine dynamism where investors can set long-term, stable forecasts – and where the country can have a significant lever to increase its GDP for decades to come.
Describe some of the challenges investors can expect to encounter.
Madagascar is still facing serious challenges in terms of infrastructure. Road and domestic air transportation, for example, remain difficult to use and to rely on. This increases logistics costs and transit time. Electricity supply also remains unstable and investing in generators must be considered in all capital expenditure plans.
Name one local business person you admire.
There are several great business leaders in Madagascar, whether it is in the telecoms, transport or real estate sectors. But one person I particularly admire is Erick Rajaonary, who in 2005 introduced a biological fertiliser product. In 10 years, he grew from a small enterprise to a successful company with hundreds of employees, exporting to Europe, Africa and Indian Ocean countries.
What is the one tourist attraction business people shouldn’t miss when visiting Madagascar?
I would recommend anyone coming to Madagascar to visit the Tsingy de Bemaraha National Park. It is a memorable moment for all who have had the privilege to see the needle-shaped limestone formations, which have been listed as a Unesco World Heritage site.
[box type=”note”]Meet Mamy Rakotondraibe
1. By what time in the morning do you like to be at your desk? 8am
2. How do you relax? Netflix and running
3. Best book you’ve ever read? Traité sur la tolerance by Voltaire
4. Top holiday destination? Paris
5. Favourite quote? “Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We must lead the change that we seek.” – Barack Obama[/box]