São Paulo – This Tuesday (9th), the International Monetary Fund (IMF) released the results of a mission to the Comoros Islands, an Arab country on the East Coast of Africa, from September 22 to October 6. According to an IMF statement, the head of the delegation, Mbuyamu Matungulu, has claimed that the local Gross Domestic Product (GDP) is expected to be up 2.5% this year, driven mainly by the building industry, public works, and agriculture.
“Macroeconomic developments are broadly favorable in 2012,” said Matungulu. “Construction and public works, as well as in food crop agriculture. The economy continues benefiting from sustained donor support, foreign direct investment, and resilient remittances,” he added.
The Fund expects inflation to remain at 5% this year, the current account deficit to drop from 9% in 2011 to 6.9% in 2012, and foreign exchange reserves to reach a level equivalent to seven months of imports. The mission was conducted as part of an Extended Credit Facility program, which the IMF grants to poorer countries, issued more promptly and featuring more flexible repayment conditions.
Another purpose of the visit was to complete the preparations so that the Comoros will have a right to reduce its foreign debt under the Highly Indebted Poor Countries (HIPC) initiative, maintained by the Fund and the World Bank.
According to Matungulo, implementation of the agenda of structural reforms in the country has been “quite satisfactory.” In addition to making fiscal adjustments, Comoros is expected to allow the private initiative to enter state-owned companies. The IMF has informed that the government has floated a tender to attract “international expertise” into managing the national power company, and has approved a plan which paves the way for foreign investors to acquire stakes in the local telecom company.
The Comoros Development Bank is in the process of being made into a commercial bank, and a plan is being devised to split up the National Postal and Financial Services Company, whose financial segment will be ceded to a foreign investor.
“Reflecting ongoing reforms in public financial management and in the financial and public utility sectors, medium-term macroeconomic prospects are favourable,” said the mission head. “The The government expressed its determination to fast-track these reforms, aiming in 2013 to secure effective private sector involvement in the management of Comores Telecom and to bring about substantive changes in the management of MA-MWE (power utility) and the state-owned oil-import company,” he said.
Matungulo added that “continued rigorous implementation of the reform agenda” could cause real GDP growth to increase to 3.5% next year.
*Translated by Gabriel Pomerancblum
