AfDB Approves $165M for Madagascar’s Trade Corridors and Regional Connectivity

The financing, provided through the African Development Fund, aims to improve infrastructure and trade facilitation between Madagascar’s ports of Tuléar and Beira.

The African Development Bank Group’s Board of Directors has approved a $165 million loan to support the third phase of Madagascar’s trade corridor improvement initiative. Announced on December 11, 2024, in Abidjan, the funding will focus on enhancing critical trade corridors to boost regional connectivity, promote economic growth, and reduce poverty in the southern regions of the country.

The financing, provided through the African Development Fund, aims to improve infrastructure and trade facilitation between Madagascar’s ports of Tuléar and Beira. The project will also open up access to underserved areas, fostering economic and social integration across the southern regions of Atsimo Andrefana and Menabe.

Boosting Trade and Regional Development

The initiative seeks to strengthen Madagascar’s trade capacity, particularly in agriculture, livestock, and fish production, by enhancing transport and logistics infrastructure. Improved trade corridors will enable better access to local and international markets while driving investments in the region.

“In the long term, the project will support a significant increase in national and intra-regional trade,” stated Adam Amoumoun, head of the African Development Bank’s Country Office in Madagascar. “This will help create economic opportunities for local communities, promoting growth and poverty alleviation by improving access to markets.”

Transformative Infrastructure Improvements

A major component of the project is upgrading a 78-kilometer road stretch between Bevoay and Morombe, a critical route through key agricultural zones producing 29,000 tonnes of crops annually. In addition, the reconstruction of the Manombo bridge and the construction of two new two-lane bridges, totaling 460 meters, will improve road safety and reliability, connecting rural communities with urban centers and markets.

“This project is transformative for southern Madagascar,” said Solomon Quaynor, the Bank Group’s Vice President for Private Sector, Infrastructure, and Industrialization. “By enhancing road infrastructure, we are unlocking lifelines to economic opportunity and social progress. These roads will connect rural communities to essential services while indirectly sparking entrepreneurship, boosting trade, and creating sustainable jobs, particularly for women and youth.”

Benefits Beyond Roads

The project is designed to have a far-reaching impact on various stakeholders, including customs operations, port activities, trade enterprises, and local consumers. Additionally, it aims to strengthen research, technology integration, and capacity building to support Madagascar’s broader economic development.

The enhanced trade corridors are expected to stimulate investments, particularly in sectors like agriculture and logistics, while reducing transportation costs and improving supply chain efficiency. They will also strengthen Madagascar’s connectivity with regional markets, fostering greater economic collaboration with neighboring countries.

Sustainability and Resilience Goals

The initiative incorporates green infrastructure principles, ensuring that construction and operations are environmentally sustainable. The project also emphasizes resilience to climate change, with plans to mitigate risks posed by extreme weather events.

By investing in trade infrastructure and regional connectivity, the African Development Bank aims to accelerate Madagascar’s economic transformation, paving the way for long-term growth and development.