Journal Issue

Union of the Comoros: 2010 Article IV Consultation and Second Review Under the Extended Credit Facility, Request for a Modification of a Performance Criterion, and Financing Assurances Review—Informational Annex

International Monetary Fund
Published Date:
March 2011
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I. Comoros: Relations with the Fund

(As of October 31, 2010)

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

II. General Resources Account:

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

III. SDR Department:

SDR Millions% Allocation
Net cumulative allocation8.50100.00

IV. outstanding Purchases and Loans:

SDR Millions% Allocation
ESF RAC Loan2.2325.00
ECF Arrangement5.7965.00

V. Latest Financial Arrangements:

Type(SDR millions)(SDR millions)
ECFSep. 21, 2009Sep. 20, 201213.575.79
SAFJun. 21, 1991Jun. 20, 19943.152.25

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


VII. Implementation of HIPC Initiative: Enhanced framework

I.Commitment of HIPC assistance
Decision point dateJuly 2010
Assistance committed
by all creditors (US$ Million in NPV terms)144.80
Of which: IMF assistance (US$ million)4.27
(SDR equivalent in millions)2.89
Completion point dateFloating
II.Total disbursement of IMF assistance (SDR Million)--

VIII. Summary of Safeguards Assessment. An update of the August 2007 safeguards assessment of the Banque Centrale des Comores (BCC) was completed in April 2010. The safeguards assessment found that despite capacity constraints the central bank has taken steps to strengthen its safeguards framework; it recommended that efforts to implement International Financial Reporting Standards (IFRS) should be intensified and the financial controller should review data submitted to the Fund for each program test date, starting in December 2009.

IX. Implementation of Multilateral Debt Relief Initiative (MDRI): Not applicable.

X. Exchange Rate Arrangements: The currency of the Comoros is the Comorian franc, which is pegged to the Euro at €1 = CF 492. The 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.

XI. Article IV Consultation: The last Article IV consultation was concluded on December 15, 2008 (Country Report No. 09/42). Executive Directors noted that the return to political stability is allowing the authorities to address deep-rooted macroeconomic distortions and structural rigidities. Directors welcomed the authorities’ intention to implement a broad-ranging macroeconomic and structural reform program aimed at achieving fiscal sustainability, while improving the investment climate and strengthening institutions and governance. Directors recognized that Comoros’ fiscal prospects remain difficult as illustrated by sizeable financing requirements for 2009 and beyond and by unsustainable public debt levels.

XII. Recent Technical Assistance

MFDJul. 2003Mission to review the role of the central bank in banking supervision and to evaluate technical assistance needs
MFDSep.- Oct. 2003Mission to review the envisaged resumption of activities by the Comoros Development Bank, the possible opening of a postal bank, and the supervision of microfinance institutions
MFDFeb. 2004Internal audit
MFDMar. & Oct. 2004/Mar. & Dec. 2005Bank supervision
MFDApr. 2006Multi-topic TA assessment
FADAug. 2005Tax policy
FADJan. – Feb. 2006Tax administration
STASep. 2005Government finance statistics
FADFeb. 2006Tax policy
STADec. 2008Monetary and financial statistics
FADMar. 2009Public Expenditure management
MCMSept. 2009Banking supervision
FADDec. 2009Tax and customs administration
MCMMay-June 2010Banking supervision and internal audit

XIII. Resident Representative: None. A resident representative post established in September 1991 was closed in December 1995.

II. Comoros—Joint World Bank-IMF Work Program, 2010–11

TitleProductsProvisional timing of missionExpected delivery date
A. Mutual information on relevant work programs
Bank work program in next 12 months1. Emergency Crisis Response ProjectJune 2010
2. Interim Strategy NoteJune 2010
3. HIPC Decision Point DocumentJune 2010
4. Economic Governance Technical Assistance ProjectAppraisal & Negotiation Nov-Dec 2010January 2011
IMF work program in next 12 months1. Second ECF Review and Article IV consultationNovember 2010December 2010: Board meeting
2. Third ECF ReviewMarch 2011May 2010: Board meeting
3. Policy paper on macroeconomic impact of remittancesN/AMarch 2011
4. Fourth ECF ReviewSeptember 2011November 2011
B. Requests for work program inputs
Fund request to Bank1. Update on Bank’s assistance in the area of PFM reforms and PRSP implementationDecember 2010
2. Bank’s assistance strategy in support of public enterprise reformDecember 2010
Bank request to Fund1. Sharing macro-framework updatesContinuous
C. Agreement on joint products and missions
Joint products in next 12 months1. JSAN for 1st PRSP APRMarch 2011

III. Comoros: Relations with the African Development Bank Group

A. Bank Group’s Support in Comoros

1. The African Development Bank Group (AfDB) started operations in Comoros in 1978 and has since approved thirteen operations comprising twelve projects and one study. Cumulative Bank Group commitments net of cancellation amount to UA 46.7 million as of 31 March 2010, the bulk of this financing (64%) being from the concessional window, the African Development Fund (ADF). In addition, the AfDB approved a UA 1.5 million emergency financing to assist in mitigating the adverse impact of the food crisis in February 2009, plus a UA 0.6 million grant under the Institutional Capacity Building Project (ICBP) in November 2010. Overall, the AfDB operations in Comoros have been directed toward supporting economic-related infrastructure, budget support and rural livelihoods. In terms of sector distribution, infrastructure sector projects received the largest share (51 percent) of the total resources committed, followed by multi-sector (30.2 percent, comprising operations in governance, economic and financial reform) and agriculture (11.2 percent).

B. Strategic Orientation

2. The Bank Group re-engagement in Comoros is recent. Following the resolution of the Anjouan crisis in 2007 and the lifting of sanctions in February 2009 after clearance of its arrears with the Bank under the Bank’s Post-Conflict Countries Facility (PCCF), a two-year Interim Country Strategy Paper 2009-2010 (I-CSP) was approved in April 2009. The I-CSP is aligned to the Interim Growth Strategy and Poverty Reduction Paper (I-GSRP) prepared by the Government of Comoros (GoC). This I-CSP builds inter alia on the new strategic orientations of the Bank for increased commitment in fragile States aimed at mitigating the country’s situation of fragility and providing support to create an enabling environment for sustainable development, as well as helping Comoros to reach the completion point of the HIPC Initiative in the near future. In this respect, the Bank’s I-CSP (2009-2010) aims at: (i) improving economic management through support for institutional capacity building, and (ii) creating a better environment through improved water supply and sanitation. All the Bank’s operations are articulated around the two I-CSP pillars: (i) strengthening institutions and the macroeconomic framework, and (ii) improving water supply and sanitation. The envelope available for Comoros for the 2009-2010 period stands at UA 15.9 million, comprising the normal performance-based ADF XI allocation (UA 5,9 million) and the FSF Enhanced Support (UA 10 million). In addition, Comoros just received US$2 million from the Fragile States Facility Targeted Support Window for capacity building, including for the finalization of the PRSP, training of civil servants, revision of the fiscal code, fiscal re-organization, preparation of the PFM strategy and action plan, capacity building to the CGP and to the water and sanitation Ministry.

C. Lending Portfolio

3. Currently, the Bank’s ongoing portfolio in Comoros is composed of two operations, the Economic Support Reform Program (ESRP) consisting in a budget support operation and the Institutional Capacities Strengthening Project (ICSP) whose objective is to strengthen national capacities in public financial management (PFM), debt management and macroeconomic statistics. Consistent with the I-CSP, a Water and Sanitation Project was approved by the Boards in December 2009. Overall, current disbursement trends remain in line with forecasts. A Country Portfolio Performance Review (CPPR) is scheduled for the second half of 2011.

D. Non Lending Activities

4. During the preparation of the I-CSP, the Bank identified a series of possible avenues for economic and sector work (ESW) chief among these was the common objective of the Comorian authorities and the Bank to pay particular attention to growth impediments and identify key sectors likely to leverage and sustain economic growth over the medium-long term in Comoros. A study on the Sources of Growth in Comoros has been launched in August 2009. The first phase consisting in a macro and sector diagnosis is currently at the completion stage. The second phase scheduled for 2011 will focus on fine tuning sector surveys and elaborating a decision-making tool targeted at policy makers with respect to investment choices and economic policy impact. Specific areas for ESWs would be further explored through consultations with Government and other development partners in the context of the preparation of the next Country Strategy Paper (CSP).

E. Summary of AfDB Current Lending Portfolio

ProjectSectorEffectivenessClosing DateAmount
Millions of

Units of

Millions of

U.S. Dollars
Institutional Capacities Support ProjectMultisector19/11/0931/12/135.268.0
Budget SupportMultisector14/09/0931/12/102.03.0
Water Supply and Sanitation ProjectPublic Utilities--10.6416.10
Food Crisis ResponseAgriculture14/09/0931/12/091.52.27
Emergency Assistance to Victims of FloodSocial--0.661.0
Source: AfDB, 2010
Source: AfDB, 2010

F. IMF-African Development Bank Collaboration

5. Collaboration between the IMF and Africa Development Bank teams has been largely through exchanges, sharing of information and joint missions. More opportunities for collaboration would be explored.

IV. Comoros: Statistical Issues

Comoros—Statistical Issues Appendix As of November 18, 2010
I. Assessment of Data Adequacy for Surveillance
General: Data provision has serious shortcomings that significantly hamper surveillance. The statistical database has deficiencies in all sectors largely due to inadequate staffing and funding, as well as lack of integration of island-based data.
National accounts. Shortcomings in national accounts compilation undermine accuracy and reliability of the data and impart a high degree of uncertainty to economic analysis. The absence of basic source data requires estimates of GDP to be prepared with outdated benchmarks and rely on crude assumptions and extrapolations. 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; unfortunately, these surveys have neither been fully processed nor updated. A July 2006 AFR mission helped the authorities improve GDP estimates for 2001–05. The authorities are well aware of these shortcomings and the Commissariat Général au Plan (CGP) has asked the assistance of the African Development Bank for long term technical assistance in both national accounts and price statistics.

Consumer prices. The accuracy and reliability of the consumer price index (CPI), represents another key source of uncertainty. Expenditure weights are based on a survey from the late 1980s and sub-indices are compiled irregularly across the islands. Most price data are collected only for the country’s capital. CPI compilation is largely conducted by one person.
Government finance statistics. In August/September 2005 STA mission found that the public chart of accounts did not accurately record the execution of the budget and that a standardized presentation on outstanding public debt is not compiled. 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, complicating fiscal analysis.
Monetary and financial statistics. The Central Bank of Comoros (BCC) produces adequate monetary statistics on its own accounts, for the commercial banks and the development bank active in the country, for the deposits collected by the postal administration, and for two microfinance networks. The 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, handicapping surveillance. In June 2009 the BCC started reporting monetary and financial statistics to the IMF using Standardized Report Forms (SRFs). The current presentation and content of monetary statistics accords largely with the methodology in the IMF’s Monetary and Financial Statistics Manual.
External sector statistics. The BCC compiles balance of payments statistics along the lines of the methods recommended in IMF’s Balance of Payments Manual, 5th edition. Nevertheless, despite technical assistance and some improvements over the past few years, shortcomings in coverage and compilation continue to affect accuracy and reliability and impart uncertainty to economic analysis. A single BCC economist is responsible for compiling balance of payments statistics, precluding desirable improvements needed in coverage and data validation, particularly for trade, nonregistered trade, services, and foreign direct investment.
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. Since then, coverage has remained limited hampering the monitoring of progress towards the MDGs.
II. Data Standards and Quality
Comoros does not participate in the General Data Dissemination System (GDDS).No data ROSC is available.
Technical Assistance Missions in Statistics (1986–present)
SubjectStaff MemberDate
Monetary and Financial StatisticsP. PapadacciNovember–December 2008
Government finance statisticsG. RousselotAugust 2005
Balance of payments and
international investment
position statisticsM. 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) multi-topic technical assistance mission with a view to a thorough revamping of the statistical system. STA is planning to provide technical assistance in the area of national accounts. A Statistics Department GDDS metadata development mission scheduled for January 2007 was postponed at the request of the authorities. A 2010 request for assistance with reviewing the methodology and practices for preparing national accounts and CPI statistics was withdrawn following the initiation of AfDB technical assistance in the same areas.

As regards monetary statistics, the authorities are requesting a technical assistance mission to review the SRF test data and identify possible methodological departures from the recommendations of the Monetary and Financial Statistics Manual.

Comoros: Table of Common Indicators Required for Surveillance as of October 31, 2010
Date of latest observationDate receivedFrequency






Exchange RatesCurrentCurrentDDM
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1September 2010October 2010MMM
Reserve/Base MoneySeptember 2010October 2010MQQ
Broad MoneySeptember 2010October 2010MQQ
Central Bank Balance SheetSeptember 2010October 2010MQQ
Consolidated Balance Sheet of the Banking SystemSeptember 2010October 2010
Interest Rates2September 2010October 2010CCM
Consumer Price IndexSeptember 2010October 2010MII
Revenue, Expenditure, Balance and Composition of Financing3 — General Government4 — Union government and three island governmentsSeptember 2010October 2010QII
Revenue, Expenditure, Balance and Composition of Financing3— Central GovernmentCentral government data for the Union government only would be of limited relevance without data for the three island governments and are not produced separately
Stocks of Central Government and Central Government-Guaranteed Debt5December 2009April 2010AII
External Current Account Balance2009April 2010AII
Exports and Imports of Goods and ServicesJune 2010October 2010AII
GDP/GNP2009April 2010AII
Gross External DebtDecember 2009April 2010AII
International Investment Position6NANA

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

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

Foreign, domestic bank, and domestic nonbank financing.

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

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-a-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); reported when there are changes (C).

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

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

Foreign, domestic bank, and domestic nonbank financing.

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

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-a-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); reported when there are changes (C).

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