Gasy Community Network Services S.A. (G@synet)

MIGA has issued two guarantees of $10.97 million (€7.6 million) to SGS S.A. of Switzerland, covering its loan guaranties to two banks in Madagascar for their respective loans to G@synet. MIGA’s guarantees are for a period of up to 37 months and provide coverage against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.^[1]

The project involves the introduction of modern technology in trade transactions in Madagascar, designed to significantly reduce processing time for customs clearance and cargo release; reduce the cost of trade documentation; and increase the speed by which the customs service receives duty payments.

The project will automate the customs clearance process in Madagascar with a software platform called TradeNet. The application will link the various parties involved in external trade—customs, ministries, banks and traders—into a single data network. This will eliminate duplicative and error-prone paperwork.

There is also a Destination Inspection component in the project, under which three mobile inspection scanners will be deployed at the ports of Mahajanga on the west coast of Madagascar, Toliara in the southwest, and Toamasina on the east coast. The scanners will allow non-intrusive examination of imports and exports.

The project will help the local business community by increasing transparency in customs clearance and tax collection, while promoting fair and equal treatment of traders. It is expected to lead to reduced corruption opportunities for customs staff; more accurate trade information and statistics; reduced human intervention and paper handling; better detection of irregularities and fraud; and increased transparency and accountability.

The project is expected to generate revenues for the government, estimated at $1.5 million per year (for each of the first five years) inclusive of royalties, duties and dividends. Local staff—expected to grow to 50 by the second year—will receive training in network management, IT security, and the operation and maintenance of scanners.

The World Bank Group’s country assistance strategy for Madagascar is organized around two main pillars—helping to remove constraints to investment and growth, and improving the scope and quality of service delivery. MIGA's support for the project is aligned with both. The project also matches MIGA's strategic objective of increasing its presence in Africa, particularly in IDA-eligible countries.

^[1] The guarantee was expired on November 29, 2012