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Economy and Money


A country’s economy and politics are important factors in keeping it alive. Madagascar was a French colony for many years and was only independent for a relatively short period of time; unfortunately, France still interferes in Malagasy politics more than 50 years after the country’s independence.


Madagascar is one of the poorest countries in the world. The economy is largely based on agriculture, mining, fishing, and the textile industry. One of Madagascar’s most famous products is vanilla, which comes from an orchid. It takes two years for a vanilla pod to grow, so it is quite expensive.


Despite the relatively high price of vanilla, the average Malagasy earns about $1 a day, and 70% of Malagasy people live below the poverty line. About half of Malagasy children under the age of 5 are malnourished.


Why is Madagascar so poor? There are several reasons for this. Under former dictator Didier Ratsikara, corruption was widespread within the government, which stole most of the foreign monetary aid. During the colonial period, the economy was limited to the extraction of natural resources (timber industry, mining, fishing). This did not promote long-term economic growth, as resources were shrinking as they were exploited. This is called economic colonialism.


In addition, due to the lack of infrastructure (especially roads), farmers have difficulty selling their products in markets. Madagascar’s geographical location, isolated from the continent, increases the cost of trade. Everything that Madagascar produces or wants to buy from other countries must be shipped by air or sea. Due to the poor educational system, it is difficult for young Malagasy people to find work outside the agricultural sector, and few people in Madagascar have access to technology or the Internet.


Finally, environmental damage has reduced the yields of food agriculture (the one that allows farmers to eat what they produce). All these factors contribute to Madagascar’s poverty.



Tourism is also of particular importance to the Malagasy economy, but has not yet reached the proportions desired by many Malagasy people. If continuous tourist flows were to flow to Madagascar, significant employment could be created in this sector and secure revenues could be recorded. The money generated could be invested in important areas such as health, education and nutrition as well as nature protection. However, the political instability of recent years has not necessarily contributed to the stabilization of the tourism sector. However, after the free democratic elections of 2018, the signs now seem to be finally back on the road to success. We would also like to support Madagascar’s economy with our trips and at the same time offer you an unforgettable holiday. Come to Madagascar for your honeymoon or enjoy an adventure holiday that you will remember for a long time. With our individual travel packages, we are already waiting for you.


Madagascar’s official currency since 1 January 2005 is the Malagasy Ariary (MGA), reintroduced under Marc Ravalomanana’s first mandate to replace the Malagasy franc. This currency was first introduced in 1961, 1 Ariary is worth 5 Malagasy francs. The 20,000 Ariary (MGA) notes exist, they are the largest banknotes there are, and the current note is as follows

The value of this ticket is about €5. In the notes there are then 10,000 Ariary (MGA), 5000 Ariary (MGA), 2000 Ariary (MGA), 1000 Ariary (MGA), 500 Ariary (MGA), 200 Ariary (MGA) and 100 Ariary (MGA).

There are even aluminium coins in use, but of such a low value that if they were made of a more expensive metal, the weight of the coins in the value of the metal would certainly be more valuable than the currency itself.

The inflation rate is very high and that is why I only give the following exchange rate as an example, the respective exchange rate can be found on the Internet.

20000 Ariary=100000 Franc (old francs)= 5€

10000 Ariary=50000 Franc=3€

5000 Ariary=25000 Franc =1,50€

2000 Ariary=10000 Franc = 0,60€

1000 Ariary= 5000 Franc = 0,30€

500 Ariary= 2500 Franc = 0,15€

200 Ariary= 1000 Franc = 0,06€

100 Ariary= 500 Franc = 0,03€


Important : Although the Malagasy franc has not officially existed since 2005, prices are still very often offered in the old currency, mainly in rural areas, in markets but also in some hotels or in discussions with residents.

For inexperienced travellers, the two currencies, i.e. the currency valid in Ariary or MGA and the one that has not existed for nearly 10 years (Malagasy Franc), are very difficult to understand and convert. But you must always be sure that the prices indicated are in Ariary or Franc so as not to pay 5 times the price if something has been offered, for example in Ariary and is paid by mistake in Ariary.

So it’s not easy if you’re used to strong currencies like the euro. There are several ways to obtain local currency upon arrival.