New law advances enabling environment for cooperative businesses in Madagascar

Cooperatives like Mirary Soa, a vanilla producing farmers' co-op in Madagascar's Analanjirofo Region, will benefit from the new law.

A new cooperative law in Madagascar is raising awareness of the co-op business model and advancing the enabling environment the country's burgeoning cooperative movement needs to grow and thrive. Passed in late 2023, the law is the result of a collaboration between NCBA CLUSA and Madagascar's Ministry of Industrialization and Trade to strengthen the legal and regulatory framework for cooperatives.

Seven years in the making, the law is part of NCBA CLUSA's broader efforts to ensure co-ops can operate within an environment that facilitates their development-or at least doesn't discriminate against them compared to other business models.

Developed under NCBA CLUSA's Creating an Environment for Cooperative Expansion project funded by the U.S. Agency for International Development (USAID)'s Cooperative Development Program (CDP), the new law in Madagascar recognizes cooperative businesses as autonomous enterprises, highlighting their significant potential to impact the country's economy.

The technical expertise provided by NCBA CLUSA was essential in drafting this law, as acknowledged by ministry officials. Building on this success, the ministry is once again seeking NCBA CLUSA's assistance under our current CDP project, Cooperative Ecosystem and Social Inclusion, to draft the regulations accompanying the new co-op. Called the "implementation decree," these regulations establish how the new law should be applied.

Local legal experts, ministry officials and NCBA CLUSA staff at NCBA CLUSA offices in Antananarivo, Madagascar for the first meeting of a working group tasked with establishing regulations around the new co-op law.

A working group comprising local legal experts, ministry officials and NCBA CLUSA staff was recently formed to develop a proposal for this implementation decree, with the support of a legal expert recruited by NCBA CLUSA. This group will also propose recommendations to harmonize administrative procedures both at the ministry's central level and its regional branches.

During the working group's first meeting in February, Irène Andriamaneho, Director of Entrepreneurship Promotion at the Ministry of Industrialization and Trade, expressed gratitude to NCBA CLUSA for its ongoing support. She emphasized the importance of the implementation decree to the ministry's short-term objectives while encouraging group members to collaborate closely to ensure its effectiveness.

Abel Rakotonirainy, NCBA CLUSA's Country Coordinator in NCBA CLUSA, also expressed appreciation to the ministry for its trust. He assured ministry officials of NCBA CLUSA's continued commitment to supporting the ministry in improving the legal framework for cooperatives. Rakotonirainy also encouraged working group members to become more familiar with the new law and the cooperative business model, highlighting the importance of practical learning.

Since the passage of the new cooperative law, co-op advocates in Madagascar have observed a shift in how officials at both the ministry's central level and its regional branches perceive cooperatives. The ministry is also now actively promoting the cooperative business model to young people within the public high school system who are curious about cooperatives and interesting in learning more.

"By instilling an entrepreneurial spirit among high school students, we are also advocating for the cooperative model as a viable option for their future business endeavors." - Irène Andriamaneho, Director of Entrepreneurship Promotion, Madagascar Ministry of Industrialization and Trade

"By instilling an entrepreneurial spirit among high school students in the capital and its outskirts, we are also advocating for the cooperative model as a viable option for their future entrepreneurial endeavors," Andriamaneho said. "It's intriguing to note that [these youth] are surprised to discover that cooperatives can be tailored to suit various entrepreneurial ventures, beyond the public transportation sector with which they are familiar." Officials from the Ministry of Industrialization and Trade are seeking additional training on cooperatives from NCBA CLUSA to further raise awareness.

Five meetings into the process, the working group has identified the key details that will inform the implementation decree, as well as the need for capacity building to better address on-the-ground realities. This partnership between the ministry and NCBA CLUSA demonstrates a successful collaboration that will promote the ongoing development of cooperatives in Madagascar.

Learn more about NCBA CLUSA's USAID-funded Cooperative Development Project in Madagascar

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