Madagascar

Current status

Madagascar's supply chain risk has escalated in the past 30 days due to diplomatic tensions with France and ongoing drought conditions in the south. Four high-severity events occurred, including the detention of French nationals, diplomatic expulsions, and continued drought impacts requiring international food aid. These developments compound Madagascar's existing structural weaknesses, with corruption perception and governance effectiveness scores below 30/100.

Supply chain impact

• Nickel and cobalt mining operations face heightened scrutiny and potential disruption as diplomatic tensions with France could affect French mining investments and technical partnerships in Madagascar's extractive sector.
• Vanilla exports, which Madagascar dominates globally, risk supply chain instability due to both diplomatic uncertainty and drought conditions affecting agricultural regions, potentially impacting food and fragrance industries worldwide.
• Southern Madagascar's drought requires 5,000 tonnes of emergency food aid for 288,000 people, indicating severe agricultural stress that could reduce export volumes of agricultural commodities and strain logistics infrastructure.
• Tourism-dependent coastal regions may experience reduced French visitor flows due to diplomatic tensions, affecting local supply chains for hospitality and related services.
• Port operations in Mahajanga specifically face diplomatic complications that could disrupt regional trade flows and commodity exports through this key northwestern gateway.

Watch points

• Monitor French mining company operations and any announced suspensions or security reviews of nickel and cobalt projects, as these could significantly impact global battery metal supply chains.
• Track vanilla pricing and availability signals in May-June as the current crop season progresses amid diplomatic tensions and weather stress.
• Watch for expansion of drought conditions beyond southern regions and any additional international aid requirements that could strain logistics networks and port capacity.