The International Monetary Fund (IMF) has reached a staff-level agreement with the Union of the Comoros on the fourth review of its Extended Credit Facility (ECF)-supported program. This agreement, which is subject to approval by the IMF’s Management and Executive Board, could make available SDR 3.56 million (approximately US$4.7 million) to Comoros, increasing total disbursements under this arrangement to about US$23.5 million.
Ms. Suchanan Tambunlertchai led an IMF team in discussions held in Moroni from April 29 to May 13 regarding economic and financial policies and reforms within this context. She issued a statement noting that "economic activity softened in 2024" due to factors such as subdued exports and weak private sector credit growth. Inflation peaked at 8.7% year-on-year in September but decreased to 6% by the end of the year.
Tax revenue fell short of targets by approximately 0.4 percentage points of GDP, although large current transfers helped manage the trade imbalance, keeping the current account deficit at 2.2% of GDP. Gross international reserves rose from US$320 million at the end of 2023 to US$340 million by late 2024.
Challenges remain for Comoros' financial sector despite ongoing reforms aimed at strengthening supervision and regulatory frameworks. The restructuring of SNPSF into the Postal Bank of Comoros is noted as progress, with full operationalization being a key future milestone.
Performance under the ECF-supported program has weakened; only two out of five quantitative targets were met by December 2024's end. The failure to meet tax revenue targets and higher-than-expected expenditures contributed to missing primary balance goals, while liquidity issues led to new external arrears.
Authorities have committed to corrective actions for missed targets including boosting revenue collection through proper tax law application and clearing all external debt service arrears accumulated since early this year.
Discussions also covered advancing structural reforms in domestic revenue mobilization, public financial management improvement, state-owned enterprises oversight enhancement, and implementing social spending plans alongside progress on anti-corruption measures enacted in 2023.
Comoros faces challenges typical for small island economies but remains committed to reform efforts supported under its ECF program which aims at maintaining macroeconomic stability while addressing significant financing needs.
The IMF mission team engaged with several high-ranking officials including President Azali Assoumani, Finance Minister Ibrahim Mohamed Abdourazak, Central Bank Governor Younoussa Imani among others during their visit which included meetings with commercial banks and donor community representatives as well.