Madagascar - Tapping Into Biodiversity for Sustainable Growth

Madagascar’s unrivaled biodiversity is undoubtedly its biggest asset. Nearly all (90 percent) of the plant and animal species found on the island are endemic. This rich and unique mix of flora and fauna generates significant foreign exchange earnings, with up to 130,000 tourists visiting the country's 6.9 million hectares of protected areas eacy year. Other natural resources are also important at the level of the national economy. Fisheries already contribute more than 2 percent of GDP and the growing large-scale mining sector is expected to contribute 15 percent of GDP in coming years.

A lesser known, yet vitally important, role of the country’s terrestrial forests and coastal and marine natural resources is found in the wide range of ecosystem services that they provide for Malagasy local communities—these services include timber, food, water, fuel, and construction materials that are essential for the livelihoods of around 16 million people.

It is estimated that natural capital represents roughly half of Madagascar’s wealth. But there is no systematic accounting of the economic or biophysical values of the country’s natural assets. The country urgently needs economic information about its natural capital to improve its decision-making. Such information would help policymakers manage their resources sustainably.

Making WAVES in Madagascar

The WAVES project in Madagascar will help the country strengthen its capacity to manage its natural capital and promote sustainable development. Plans to meet this objective include:

  • Improving the availability of data on the physical and monetary values of ecosystem services and natural capital in the mining, water resources, and protected areas/forests sectors.
  • Facilitating the development of complementary macroeconomic indicators that reflect selected ecosystem services and natural capital values.

Data generated by the WAVES project will help to inform dialogue and decision making related to priority macroeconomic and natural resource issues. It would help find answers to some of the most pressing questions such as how to tap into the economic benefits of protected areas; how best to distribute and use mining revenues to support development; and how to manage conflicting demands on water resources.

The story so far

The WAVES Partnership has garnered strong support at the highest levels of Government. After joining WAVES, the Government brought together high-level technical experts to come up with policy priorities that could be supported by the program. Two technical case studies were commissioned to generate information on the forestry and fisheries sectors, with the aim of testing different methodological approaches and identifying clear entry points for future WAVES support.

In early 2012, a National Steering Committee was established under the leadership of the Ministry of Economy and Industry and Conservation International, a leading environmental non-profit organization working in Madagascar.

In June 2012, the government joined the World Bank’s 50:50 Call to Action for the implementation of natural capital accounting and endorsed the Gaborone Declaration and Communiqué that arose from the “Summit for Sustainability in Africa” conference. (Madagascar-WAVES was presented at the follow-up meeting to the Gaborone Declaration for Sustainability in Africa held in Botswana in October 2013.)

In August 2012, the Steering Committee agreed upon a work plan that includes developing accounts in the sectors of mining, water resources, and forestry/protected areas. The work plan also contains significant support for capacity building and awareness raising activities.

A Feasibility Study was finalized in September 2012. Comprehensive consultations with Government, civil society and development partners were carried out during the preparation of the study.

In September 2013, the second meeting of the national steering committee was held. Key points of discussion included the need to better engage with the private sector, the need to produce progressive results so as to demonstrate the value of WAVES to national decision makers, and the need for the steering committee to play a more active and regular role in overseeing WAVES activities.

The technical working groups for the mining, forestry, and water sectors have been meeting regularly. In June 2013, they participated in a series of videoconferences with an international environmental accounting specialist to confirm the policy priorities. Between June and September they carried out data collection under the guidance of the WAVES national coordinator. 

A fourth technical working group—dealing with macroeconomic indicators—was established in September 2013. The mandate of this group, led by the Secretary General of the Ministry of Economy and Industry, is to select the macroeconomic indicators that will be developed through WAVES activities, and to develop and implement a strategy to ensure the high-level diffusion of these indicators. 

There will be regular meetings of the Steering Committee and the technical working groups to oversee activities and ensure the outcomes are communicated widely to decision-makers and the population at large.

Progress on accounts

  • Mining Accounts: A confidentiality agreement has been signed with the Chamber of Mines to facilitate data collection from its members. Data collection for large-scale mining stock accounts is almost complete. Technical assistance will be provided to analyze the data, and the technical working group will then begin building the stock accounts.
  • Macroeconomic Indicators: Several macroeconomic indicators for development in Madagascar have been identified, including value of natural wealth, volume index of natural resource depletion, and adjusted net saving. A workshop will take place at the end of 2014 to present a national discussion note on national wealth management and the role of NCA in national development planning. 
  • Water Accounts: In consultation with the government, the structure for flow accounts and renewable water stock accounts at the national level (disaggregated to basin level) has been finalized. Data on renewable water stocks is being collected and will be used to construct the water stock accounts. 
  • Forestry Accounts: Data collection on the existing timber volume will be available by November 2014 as a first step towards constructing timber stock accounts. In parallel, a timber expert will provide support to the forestry technical working group on the methodology to estimate the value of standing trees, with a view to prepare the monetary stock accounts. 
  • Protected Areas/Tourism Accounts: Protected area tourism surveys (visitor/enterprise surveys and willingness to pay surveys) were launched to generate information for protected area monetary stock accounts. A scoping study is currently underway to evaluate the feasibility, based on existing data, of extending the visitor/enterprise surveys in order to prepare a tourism satellite account.