Abstract
This paper discusses the Union of Comoros’ 2008 Article IV Consultation and request for Emergency Post-Conflict Assistance and disbursement under the Rapid-Access Component of the Exogenous Shocks Facility. Real GDP growth has been well below the regional average, and per-capita income has steadily declined. Rising food and energy costs have worsened the external position, and the external debt burden is far above the Heavily Indebted Poor Countries threshold. To reverse the deteriorating trend, the authorities have initiated measures in 2008 to contain the fiscal deficit and begin to address macroeconomic and structural impediments to growth.
1. The information below has become available since the staff report was issued to Executive Directors on December 2, 2008. It does not alter the thrust of the staff appraisal.
2. All program prior actions have been implemented, including parliamentary approval of a stability-oriented consolidated budget for 2008.
3. During their discussion on Comoros at a December 10, 2008 meeting, Paris Club creditors did not raise objections to the existence and expected continued accumulation of arrears under the EPCA. The authorities have also reached understandings with all multilateral creditors on how to address existing arrears.
4. The authorities have:
Put in place a flexible-pricing mechanism for petroleum products. Henceforth, an inter-ministerial committee will review and revise petroleum products prices on a quarterly basis, as needed, to reflect changes in international prices. This should help make fuel supply more reliable.
Initiated discussions with World Bank/IFC staff on a reform strategy for public enterprises.