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Union of the Comoros: Annexes to the Staff Report for the 2006 Article IV Consultation and Review and Extension of the Staff-Monitored Program

Author(s):
International Monetary Fund
Published Date:
October 2006
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Annex 1: Fund Relations

(As of August 31, 2006)

A. Financial Relations

I. Membership Status: Joined September, 21,1976; Article VIII

II. General Resources Account:

SDR Millions% Quota
Quota8.90100.00
Fund holdings of currency8.3693.91
Reserve position in Fund0.546.11

III. SDR Department

SDR Millions% Allocation
Net cumulative allocation0.72100.00
Holdings0.012.16

IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements:

ApprovalExpirationAmountAmount
Date DateApprovedDrawn
Type(SDR millions)(SDR millions)
SAF06/21/9106/20/943.152.25

VI. Projected Obligations to Fund (SDR millions; based on current use of resources and present holdings of SDRs):

Forthcoming
20062007200820092010
Principal
Charges/interest0.010.030.030.030.03
Total0.010.030.030.030.03

VII. Implementation of HIPC Initiative: Not applicable

VIII. Implementation of MDRI Assistance: Not applicable

B. Nonfinancial Relations

IX. Exchange Rate Arrangements: The currency of the Comoros is the Comorian franc, which is pegged to the euro at €1 = CF 492. Comoros has accepted the obligations of Article VIII, Sections 2(a), 3, and 4, and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions.

X. Last Article IV Consultation: The 2005 Article IV consultation was concluded by the Executive Board on July 18, 2005 (Country Report No. 05/299). Comoros is on the standard 12-month cycle.

XI. Technical Assistance, 2003-06

DepartmentDatesSubject
MFDJuly 2003Mission to review the role of the central bank in banking supervision and to evaluate technical assistance needs
MFDSep.- Oct. 2003Mission to review the planned resumption of activities by the Comoros Development Bank, the possible opening of a postal bank, and the supervision of microfinance institutions
MFDFeb. 2004AML/CFT
MFDFeb. 2004Internal audit
MFDMarch 2004Bank supervision
October 2004
March 2005
December 2005
MFDApril 2006Multitopic TA assessment
FADAugust 2005Tax policy
FADJan. - Feb. 2006Tax administration
STASeptember 2005Government finance statistics
FADFebruary 2006Tax policy

XII. Resident Representative

None. A resident representative post established in September 1991 was closed in December 1995.

Annex 2: Relations with the World Bank Group1

  • 1. Since the World Bank became active in the country in 1976, the Bank Executive Board has approved 19 IDA credits totaling US$132.5 million to support Comoros. The only currently active project became effective on September 29, 2004. This community-based Social Services Project (SSP) seeks to maintain basic service delivery and address the most urgent health and water needs. The SSP is a four-year operation in the amount of US$13.3 million. Current Bank support strategy as presented to the Board of Directors in March 2004 has two objectives: (i) maintaining basic social services, and (ii) supporting the process of national reconciliation and facilitating the transition to viable institutions.

  • 2. The Bank is preparing an update of this strategy that is scheduled to go to the Board in December 2006. The new strategy will align with the current one but put more emphasis on strengthening public sector capabilities. The strategy will propose two lending operations totaling USD6.8 million for the period FY07-09: (i) a supplement to the SSP; and (ii) a Public Sector Capacity Building and Governance Project.

  • 3. Since the national reconciliation agreement was signed in December 2003, the Bank has worked closely with the Fund to support the transition in Comoros, concentrating notably on improving economic management and strengthening the institutions responsible for revenue collection and budget execution. The Bank will continue to work closely with the Fund in these areas, and in monitoring and facilitating I-PRSP implementation.

  • 4. The IFC does not have any activities in Comoros, and the country has not yet joined the MIGA. The Government of Comoros requested technical advice from the IFC on possible privatization of the oil and telecom companies. The IFC Advisory Services conducted a mission to Comoros on March 24-29, 2006. The mission met with stakeholders and agreed it could support the authorities in defining their strategy for these two companies; it submitted an offer for advisory services, which requires a financial contribution from the Comoros authorities to demonstrate their readiness to move the process forward. The World Bank Institute (WBI) is planning a leadership seminar late in 2006 for Comorian authorities as part of a LICUS grant. If the seminar proves successful, WBI will consider followup activities.

Financial Relations with the World Bank

IDA Active Lending Operations in Comoros as of September 6, 2006(In millions of U.S. dollars)
PurposeApprovedCommittedDisbursed
(Fiscal year)(Less cancellations)
Number of closed credits (18)119.1106.1109.22
Active credits
Services Support ProjectFY200413.35.7
Total active13.35.7
Source: World Bank Client Connection.

Disbursements suspended because of arrears.

Source: World Bank Client Connection.

Disbursements suspended because of arrears.

IDA Loans and Debt Service CY 1997-CY 2006, as of August 31, 2006(In millions of U.S. dollars)
CY 97CY 98CY 991CY 00CY 01CY 02CY 03CY 04CY 05CY 062
IDA net disbursements4.82.8(0.5)1.310.711.17.31.30.60.4
Gross disbursements5.23.10.02.111.512.18.63.22.61.7
Repayments0.40.20.50.70.81.11.21.82.01.3
Interest payments0.50.30.60.70.50.60.70.90.80.6
Source: World Bank Client Connection

Disbursements suspended because of arrears.

From January 1 to August 31, 2006.

Source: World Bank Client Connection

Disbursements suspended because of arrears.

From January 1 to August 31, 2006.

Annex 3: Statistical Issues

Existing data are insufficient for effective surveillance due to severe capacity constraints. The statistical database is deficient in all sectors because of inadequate staffing and funding, as well as lack of integration of island-based data. Comoros does not participate in the General Data Dissemination System (GDDS). A Statistics Department GDDS metadata development mission is schedule for January 2007.

National accounts data and prices

Data shortcomings are particularly severe in the area of national accounts. Since basic data are not available in a number of areas, the aggregate GDP estimate are mostly based on crude assumptions and extrapolations of partial coverage. The estimates of GDP at current prices are compiled using outdated benchmark data. Due to lack of funding and staffing, there have been no survey-based national accounts since 1995, when one was prepared with UNDP assistance, and to date there has been no survey at all on manufacturing. In 2004, with the support of donors, a new population census and surveys on subsistence agriculture and households were completed. These surveys have neither been fully processed or updated. An AFR mission in July 2006 helped the authorities improve GDP estimates for 2001–05.

The weights used to compile the consumer price index (CPI) are based on an outdated survey from the late 1980s and is compiled irregularly across the islands. Most price data are collected only for Moroni, the country’s capital. Price compilation and quality control are conducted mainly by only one person.

Fiscal data

Classification of budgetary data is often not consistent over time or across the islands. In particular, problems arise in data on domestic arrears, external debt, and external support including its investment spending components. The latest data published in the Government Finance Statistics (GFS) Yearbook for Comoros are for 1987; the International Financial Statistics (IFS) country page does not show any government finance data.

In August/September 2005, a GFS technical assistance mission found that the public chart of accounts is inadequate to accurately record the execution of the budget. Also, a standardized table on outstanding public debt has not yet been compiled. In order to address existing problems, the mission recommended the creation of a committee to reform the public chart of accounts and strengthening of the coordination of accounting methods used by the various islands. The mission encouraged the authorities to set up a harmonized information system for budgetary and accounting operations. The mission’s report also proposes various methodological improvements as well as an enhancement of the dissemination of central government operations and public debt data.

External sector statistics

The Central Bank of Comoros (BCC) compiles balance of payments data. With technical assistance from an STA expert who visited Comoros in April 2005, the BCC was able to get ready to adopt the IMF Balance of Payments Manual, 5th edition (BPM5). The STA expert also helped the authorities to prepare a work plan to improve compilation of data on the balance of payments and international investments. As a result, preliminary annual estimates are now available, though not yet published, for 2003–05. However, the latest data on the balance of payments are available to STA only through 1995.

Despite some improvement, balance of payments data remain inadequate, mainly due to lack of adequate staff and financial resources to do the compiling. A single economist is responsible for compiling balance of payments information. Improvement is needed in data validation and data coverage, particularly for trade, nonregistered trade, services, and foreign direct investment data. Data on trade are also deficient because of poor practices in Customs data transmission. An AFR mission in July 2006 helped the authorities strengthen balance of payments data for 2001–05, based on more information on goods and services trade and a more advanced methodology for estimating inflows of emigrants’ remittances.

Monetary data

The BCC produces adequate monetary statistics on its own accounts, for the only commercial bank active in Comoros, and for two microcredit operators. The CFA franc zone arrangement has established accounting and prudential standards that prevent data disruptions. A major shortcoming is the absence of data on the large amount of euro cash in circulation.

In May 2006, the BCC reported monetary data to STA by using the Standardized Report Forms (SRFs) for the assets and liabilities of the central bank (1SR), other depository corporations (2SR), other financial corporations (4SR), as well as for monetary aggregates (5SR). Monthly monetary data in the SRF format are available for the period December 2005–April 2006.

Income distribution data and social indicators

Some progress was made with collecting income-distribution statistics and social welfare indicators when the I-PRSP was being prepared in 2003–04. However, since then coverage has remained limited and there has been no monitoring of progress towards the MDGs.

Technical assistance missions in statistics (1986-2005)

SubjectStaff MemberDate
Government finance statisticsG. RousselotAugust 2005
Balance of payments and

international investment

position statistics
M. DessartMarch-April 2005
Money and banking statisticsG. RaymondJuly 1997
Balance of payments statisticsDaniel DacoMay-June 1988
Money and banking statisticsThiet T. LuuOctober 1987
Government finance statisticsVincent MarieJune 1986

Forthcoming technical assistance

In 2005, the authorities requested a Statistics Department (STA) multitopic technical assistance mission with a view to help preparing a thorough revamping of the statistical system. STA has also been asked to provide technical assistance in the areas of national accounts, external debt, and the General Data Dissemination System (GDDS).

Comoros: Table of Common Indicators Required for Surveillance(As of September 27, 2006)
Date of latest observationDate receivedFrequency of Data 6Frequency of Reporting 6Frequency of publication 6
Exchange ratesCurrentCurrentDDM
International reserve assets and reserve liabilities of the monetary authorities 1
Reserve/base moneyJune 2006July 2006MQQ
Broad moneyJune 2006July 2006MQQ
Central bank balance sheetJune 2006July 2006MQQ
Consolidated balance sheet of the banking system
Interest rates 2June 2006July 2006CCM
Consumer Price IndexJune 2006July 2006MII
Revenue, expenditure, balance and composition of financing 3 - General government 4 - Union government and three island governmentsJune 2006July 2006MII
Revenue, expenditure, balance and composition of financing 3- Central governmentData for the Union government only would be of limited relevance

without data for the three island governments; they are not produced

separately
Central government and central government-guaranteed debt 5June 2006July 2006AII
External current account balance2005July 2006AII
Exports and imports of goods and services2005July 2006QII
GDP/GNP2005July 2006AII
Gross external debt2005July 2006AII

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, and rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds), and state and local governments.

Including currency and maturity composition.

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A); irregular (I); reported when there are changes (C).

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, and rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds), and state and local governments.

Including currency and maturity composition.

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A); irregular (I); reported when there are changes (C).

Prepared by the staff of the World Bank on September 6, 2006.

Disbursed amount is more than approved and committed amounts because of exchange rate depreciation of US$ against SDR.

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