Madagascar - A detailed analysis of the Gradido opportunities

Madagascar - A detailed analysis of the Gradido opportunities

After closer examination, Madagascar presents a much more complex and mixed picture than initially assumed. The current political crisis of October 2025 has dramatically changed the situation, but at the same time it also reveals remarkable structural strengths that could be relevant for a Gradido pilot project.

Current political situation (as at November 2025)

Military coup and transitional crisis: On October 12, 2025, the elite CAPSAT unit overthrew President Andry Rajoelina after weeks of Gen-Z-led protests against corruption, power outages and economic stagnation. Colonel Michael Randrianirina was sworn in as interim president on October 17 and promised elections within 18-24 months.^1^3^5

Mixed signals from the transitional governmentThe government appointed on October 28 consists largely of familiar faces from the political elite, which disappointed the Gen Z movement. The African Union immediately suspended Madagascar and the UN called for a return to constitutional rule.^4^7

Three possible scenarios (according to analysts):^5

• 45-50% Probability: Orderly transition with elections 2026-2027

• 25-30% Probability: Prolonged military rule with cosmetic civilian government

• 20-25% Probability: Delayed instability and economic collapse

The next 18-24 months are crucial. A successful gradido implementation would require political stabilization.

The unique cultural strength: Fihavanana

Madagascar's greatest potential for Gradido lies in the deeply rooted cultural tradition of Fihavanana - a concept that harmonizes remarkably with the Gradido principles.^8^10

What is Fihavanana?

Fihavanana is more than a word - it is the ethical paradigm that structures Malagasy society. It comprises three core components:^8

1. Respect (fihajana)

2. Kindness/Friendliness (fitiavana)

3. Mutuality/solidarity (fifanampiana)

Fihavanana describes a state of peace and harmony that people can achieve with others in their communities - modeled after the familial bonds of love, closeness and solidarity. It is both an ideal (a state to strive for) and a guide to action (we should treat others like family).^10

Fihavanana as a social safety netIn practice, Fihavanana acts as a highly effective social safety net through networks of solidarity and reciprocity based on kinship, community, religious or political affiliations. This is essential for survival in poor communities facing overlapping food, climate and economic crises.^8

Concrete forms of expression:

• Mutual help and care in times of need and joy - „Suffering together, celebrating together“^8

• Community activities at rites of passage (birth, circumcision, marriage, death) where everyone must be present and contribute (food, money, musical or dancing skills)^8

• During the COVID-19 crisis, the traditional values of solidarity were particularly evident in community actions to care for the most vulnerable^8

Why Fihavanana is the perfect match for Gradido:

Gradido's Active Basic Income, in which people are remunerated for contributions to the common good, corresponds directly with the Fihavanana principle. The Madagascans already have a cultural predisposition for this:

• Acting for the common good as a social norm

• Mutual obligations without monetary calculation

• Recognition of unpaid care and community work

Historical peace functionFihavanana has saved Madagascar from violent outbreaks and distinguishes it from many other African countries that fell into civil wars after independence. International researchers describe Madagascar as a „peaceful and fraternal country“.^11

Digital infrastructure and mobile money

Mobile penetration and the Internet:

• 56.2% mobile connections (18.2 million active SIM cards for a population of 32 million, as of January 2025)^12

• 20.4-32% Internet penetration (Sources vary: ITU 20.4%, ARTEC 32.57%, World Bank approx. 29%)^13[^15]^16

• 84.6% of the connections are 3G/4G/5G-capable^12

• 4G coverage reaches 71% of the population, total mobile signal approx. 92%^12

Mobile Money RevolutionMadagascar has experienced a remarkable mobile money boom, which could be decisive for Gradido:

• Over 70% of the adult population have access to financial services through mobile wallets - more than 10 million mobile money accounts, far more than traditional bank accounts^18

• Three large providers dominate: Mvola (Telma), Orange Money, Airtel Money^20

• Mobile money transactions doubled to USD 639 million between 2016-2020^18

• In 2013, there were only 11 mobile money accounts per 1,000 adults, by 2016 there were already 54^21

Innovative financial productsMobile money goes beyond pure transactions:^19

• Digital savings accounts and nano loans are popular

• Orange Money partners with MICROCRED for remote loan repayments and savings

• BNI Madagascar launched KRED, a digital-only microfinance brand that provided over 25,000 loans to MSMEs^19

• Baobab+ offers solar home kits via Mobile Money^19

Challenges:

• High data costs: Monthly mobile internet spending amounts to 6.28% of BNI per capita (2023) - three times higher than the ITU's 2% threshold^14

• Uneven coverage: rural areas remain underserved[^15]^16

• Regulatory gaps: Although e-money legislation was passed in 2016, there is still a need for further reform^22

Government digitization initiativesDespite the coup, ambitious programs are continuing:

• Target: Connect 1,600 villages to telecommunications services (partnership with Huawei)^13

• Digital Menabe Project: connecting 200,000 people in the Menabe region^13

• Target: 95% Coverage in remote rural areas^13

• 40,000 smartphones to be distributed as part of a USD 24 million initiative^14

Agriculture and rural poverty

Agriculture as the backbone of the economy:

• 70% of total employment in the agricultural sector^23

• 78% of the absolute poor live in rural areas (vs. 35% in urban areas)^24

• Rice is the main crop - 86% of households grow rice, over 10 million people depend on it^25

• 50-90% of household income comes from agriculture, depending on the region^24

Structural problems:

• Low productivityAgricultural production is not keeping pace with population growth - the per capita production index has fallen over the last 30 years^24

• Extensification strategyProduction increases mainly due to land expansion instead of improved technologies, which puts pressure on natural resources^23

• Fragmented production, low fertilizer use, land insecurity, low prices^24

• Only 29% of GDP comes from agriculture despite 70% employment - a sign of extreme underproductivity^23

Gradido opportunityThe Active Basic Income could:

• Giving subsistence farmers financial stability

• Recognize the care work of women (predominantly in rural areas)

• Promoting joint agricultural projects and knowledge exchange (traditionally within the framework of Fihavanana)^26

Civil society and the NGO landscape

Madagascar has a vibrant and active civil society, which could act as an implementation partner for Gradido:

Successful NGOs:

• Association LOVA (Lanja Omena Vokatra Haharitra - „Acting for a sustainable result“): Focus on sustainable rural development, education and local economic strengthening. LOVA works with savings and credit groups, producer cooperatives and local value chains.^26

• SAHA: Supports local governments and civil society in participatory budgeting, local taxation, local economic development.^27

• Transparency International Madagascar (TI-MG)Successful anti-corruption campaigns, national petitions with tens of thousands of signatures, peaceful marches.^28

Forum of civil society organizations2023, a hybrid forum was held with 50 CSOs from different regions, with thematic conferences on inclusive governance, legal recognition of CSOs and partnerships.^29

Energy and electrification

Catastrophic starting position:

• Only 35% National electrification rate, only 11-15% in rural areas^16^31

• Chronic power cuts were the main trigger for the protests in October 2025^2^4

Massive investments in renewable energies:

• World Bank DECIM project: USD 400 million for digital and energy connectivity^33

• Madagascar Rural Electrification ProgramTarget 70% Rural electrification by 2030 through solar panels^30

• Solar mini-gridsEIB, GRET, WeLight and others implement solar mini-grids in rural areas^34^31

• GRET project in the Melaky region (only 4% electricity access): Electrification of 2,000 households, 30 small businesses, 10 public buildings^34

• 56% of national energy production already from solar and hydropower[^16]

Gradido synergiesDecentralized energy infrastructure corresponds perfectly with a decentralized currency system. Solar projects could be combined with Gradido community welfare contributions - e.g. maintenance and operation of mini-grids as an active basic income.

Social structures and traditions

Madagascar's social structures are highly complex and offer both opportunities and challenges:

Ancestor worship (Razana): The worship of ancestors is central to spiritual life and influences daily decisions. The Famadihana ceremony („turning the bones“) is an important tradition in which ancestors are exhumed, wrapped in new cloth and reburied. This shows the importance of community and collective rituals.^36^38

Hierarchical structures with egalitarian elementsSociety is traditionally hierarchical (nobles, commoners, descendants of slaves), but Fihavanana acts as a horizontal structure that balances these hierarchies through reciprocity and solidarity.^37^8

18 ethnic groupsMadagascar is ethnically diverse, but the Malagasy language and Fihavanana create a strong national identity.^38^9

DecentralizationDifferent regions have different kinship systems (cognatic in Merina, patrilineal in Bara and Tsimihety). ^36 Both money creation and Gradido's Active Basic Income are calculated per capita and are compatible with all kinship systems.

Risk-opportunity analysis for Gradido in Madagascar

Strengths (for Gradido):

1. Fihavanana culturePerfect cultural fit with gradido principles of common good, reciprocity and solidarity

2. Mobile Money Penetration70% Population with mobile money access, established digital payment infrastructure

3. Vibrant civil societyExperienced NGOs with community structures as potential implementation partners

4. Decentralized energy projectsSynergies between solar mini-grids and decentralized currency system

5. High demand: 75% poverty, 80% unbanked rural population, high potential for transformative impact

6. Peaceful tradition: Fihavanana has historically prevented violence, promotes peaceful conflict resolution

Weaknesses/challenges:

1. Political instability: Military coup in October 2025, transition process with uncertain outcome (18-24 months)

2. Low internet penetrationOnly 20-32%, especially low in rural areas where poverty is concentrated

3. High data costs6.28% of BNI per capita for mobile internet

4. Low education: Very low level of education in rural areas makes technology adoption difficult

5. Fragile infrastructureHardly any paved roads outside the capital, difficult access to rural areas

6. Regulatory uncertainty: No legal framework for alternative currencies

Opportunities:

• Gen-Z movement shows hunger for systemic change and new approaches^32^4

• Transition process could open windows for innovative reforms^5

• Massive international investment in digital and energy infrastructure underway^30

• Fihavanana as an indigenous concept does not make Gradido a „Western import“

Risks:

• Delayed instability could make any pilot project impossible (20-25% probability according to analysts)^5

• Military government could see alternative currency systems as a threat

• Economic crisis (poverty at 75%, inflation) could prioritize short-term survival needs over long-term system changes

Specific recommendation for Madagascar

Cautious observation with preparation for opportunistic window:

Madagascar is currently not ready for a Gradido pilot project due to the political turmoil. But the structural prerequisites - in particular Fihavanana and Mobile Money - are exceptionally strong.

Recommended strategy:

Phase 0 (2025-2026): Observation and relationship building

• Follow political developments closely: Elections, stabilization, constitutional reform

• Establish contacts with Malagasy CSOs (LOVA, SAHA, TI-MG)

• Linking the Gradido concept with Fihavanana principles and translating it into Malagasy

• Organize small study trips and dialogue forums on complementary currencies

Phase 1 (2027-2028): Pilot project with successful transition

• If scenario 1 occurs (45-50% Probability: orderly transition with elections):^5

  • Launch of a pilot project in a rural region with good mobile coverage and an active CSO presence

  • Combination with solar mini-grid projects: Active basic income for maintenance and operation

  • Cooperation with mobile money providers (Mvola, Orange Money, Airtel Money)

  • Integration into existing savings and credit groups (already promoted by LOVA and others)

Ideal pilot region: Menabe (200,000-person digitization project underway) or Melaky (GRET Solar project active)^34

Phase 2 (2028-2030): Scaling

• Expansion into other regions if successful

• Integration with the central bank's national financial inclusion strategy

• Advocacy for legal recognition as a complementary currency

Conclusion:

The Gen Z movement that triggered the coup is explicitly seeking systemic change. If Gradido is positioned as part of this „new vision for Madagascar“ - rooted in Fihavanana, not as a Western import - the transformation opportunity could be extraordinary.^2^4 <span style="“display:none“">^40^42^44^46^48^50^52^54^56</span>

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[^16]: https://events.wbgkggtf.org/sites/default/files/2024-11/Session 4_Speaker%203,%204_Jean-Baptiste%20Danilo.pdf