Madagascar imposes curfew after violent protests against water, power cuts

Madagascar's capital, Antananarivo, is under a dusk-to-dawn curfew following violent protests over chronic power outages and water shortages, which escalated into widespread looting of retailers and banks, attacks on infrastructure, and clashes with police. This significant civil unrest, stemming from persistent 12-hour power cuts and deep-seated poverty, signals elevated political instability and operational risks for businesses and investments within the island nation, with protesters directly targeting economic institutions and government-linked assets.

Analysis

Significant civil unrest in Madagascar's capital, Antananarivo, has escalated, prompting authorities to impose a dusk-to-dawn curfew. The protests, triggered by chronic power outages lasting over 12 hours and severe water shortages, have turned violent, with demonstrators clashing with police and engaging in widespread looting of commercial assets, including retailers and banks. The destruction of public infrastructure, such as new cable car stations and offices of the national utility company, alongside attacks on properties linked to President Andry Rajoelina, signals a sharp deterioration in political stability. This turmoil is rooted in deep-seated economic hardship, with the World Bank citing a 75% poverty rate in 2022, and reflects profound public discontent with the government's failure to provide basic services. For investors, these events represent a material increase in operational and sovereign risk, directly threatening the security of physical assets, disrupting supply chains, and indicating a severe breakdown in public order and governance.

Key Decisions for Investors

• Investors with direct or indirect exposure to Madagascar, including through supply chains or holdings in companies with local operations, must immediately assess the heightened operational and security risks to their assets.
• Closely monitor the government's ability to restore order, the duration of the curfew, and any signs of the unrest spreading to key economic zones like ports or mining regions, as these will be critical indicators of near-term stability.
• Given the direct targeting of commercial properties and infrastructure, a re-evaluation of long positions related to the Malagasy economy is prudent, and investors should consider hedging against further sovereign risk escalation or reducing exposure until the political situation clarifies.