Economy
Road Infrastructure: Accelerating Work to Reduce 1.11 GDP Point Loss
As spending commitments and road work accelerate, a DGEP study reveals the economic stakes: rehabilitating and maintaining the network could generate up to 1.11 additional GDP points. Madagascar's poor road conditions represent more than a travel constraint—they constitute a significant economic loss. Nearly 90% of the network is unpaved, and only 11.4% of the rural population lives within two kilometers of an all-season passable road. In a country where roads carry most domestic traffic, this infrastructure weakness directly impacts trade, logistics costs, and production. The current acceleration of spending and road work takes on particular economic significance. A study by the General Directorate of Economics and Planning, within the Ministry of Economy and Finance, evaluates potential gains from network improvement. According to simulations, road rehabilitation and maintenance would increase total traffic by 43.2%—637,743 additional vehicles annually. Freight would rise 21.7% and passenger transport 45.6%. These improvements would extend far beyond the road sector. Transport value-added would increase 17.2%, with spillover effects on commerce, business services, banking and insurance, and equipment. Overall, the GDP impact is estimated at +1.11%—a figure also representing the estimated loss from insufficient road interventions. The study delivers a major lesson for public spending priorities: the heaviest investments don't always produce the greatest overall economic returns. Periodic maintenance of key routes would concentrate 52.1% of total traffic gains, versus 36.8% for major rehabilitation and 11.2% for track paving. By this logic, rapid intervention on already-busy roads prevents deterioration and immediately protects significant economic flows. Maintaining today costs the economy less than rebuilding tomorrow. In this context, accelerating road projects transcends infrastructure policy—it functions as a growth lever: each restored route progressively reduces losses from isolation, facilitates goods circulation, and brings the economy closer to its true potential.
Source: Midi Madagasikara