Madagascar: Central Bank Announces Opening of Gold Collection Points

Ambilobe et Maevatanana

The Central Bank of Madagascar has strategically identified four key regions for its new gold collection points: Ambilobe and Maevatanana in the north, Miandrivazo in the west, and Mananjary in the southeast. These locations are specifically chosen for their high gold potential, indicating a targeted approach to formalizing the extraction and trade of the precious metal. By establishing official purchasing centers in these areas, the bank aims to directly engage with artisanal miners and local producers, offering a legitimate alternative to the informal channels that have long dominated the sector. This geographical focus is critical for ensuring the initiative's reach and effectiveness in regions where illicit activities are most prevalent.

The establishment of these points is not merely about increasing volume but also about imposing standards. The Central Bank intends to ensure the traceability and quality control of the gold collected, a significant step towards integrating Madagascar's gold into global legitimate markets. Furthermore, a crucial social objective is to improve the working conditions of artisanal miners, particularly by eliminating the use of mercury, a highly toxic substance commonly employed in informal gold extraction. This move underscores a broader commitment to responsible mining practices and the welfare of the estimated 600,000 individuals involved in the sector.

13 Kilos

The stark contrast between legal and illegal gold exports highlights the immense challenge facing Madagascar's authorities. Last year, only a paltry 13 kilograms of gold were legally sold to foreign buyers through the official single export window. This figure pales in comparison to the Ministry of Mines' 2024 estimate, which suggested that a staggering one tonne of gold was clandestinely leaving the country every single month. This illicit outflow represents an enormous loss of potential revenue for the Malagasy state, as the smuggled gold completely bypasses any taxation.

The scale of this untaxed, illegal trade underscores the urgency of the Central Bank's new initiative. The "extremely lucrative" nature of this trafficking has created powerful networks that operate outside the law, making it difficult for the government to assert control. By offering a legitimate and accessible channel for gold sales, the Central Bank hopes to divert a significant portion of this illicit flow into formal channels, thereby capturing much-needed tax revenue and strengthening the national economy. The success of the collection points will be measured by their ability to significantly narrow this gap between legal and illegal exports.

600 000 Personnes

The gold sector in Madagascar is a vital source of livelihood, employing an estimated 600,000 people, predominantly in informal capacities. This large workforce, often operating under precarious conditions, represents both a challenge and an opportunity for the Central Bank's formalization efforts. The informal nature of their work means they are often exploited by traffickers, lack access to fair prices, and are exposed to hazardous practices like mercury use without proper safety measures. The new collection points aim to address these issues by providing a regulated environment.

By formalizing the sector, the Central Bank seeks to improve the economic stability and social welfare of these 600,000 individuals. Better working conditions, fair pricing, and the elimination of harmful practices like mercury use are central to this objective. Furthermore, integrating these informal miners into a regulated system could unlock their economic potential, allowing them to contribute more effectively to the national economy. The success of this initiative hinges on its ability to gain the trust and participation of this vast informal workforce, offering them tangible benefits that outweigh the perceived advantages of illicit trade.