- The Comorian authorities and IMF staff have reached a staff-level agreement on economic policies and reforms for the fourth review under the 4-year ECF-supported program. The review, subject to approval by the IMF Executive Board, would release SDR 3.56 million (about US$4.7 million) in financing.
- Program performance weakened amid shortfalls in domestic revenue mobilization, accumulation of external arrears, and delayed completion of three structural benchmarks. Discussions with the authorities addressed the need to reinvigorate the reform momentum.
- The authorities are committed to implementing corrective measures to safeguard program objectives, including the clearance of most external arrears and short-term measures aimed at boosting domestic revenue collection.
Washington DC: An International Monetary Fund (IMF) team, led by Ms. Suchanan Tambunlertchai, held meetings in Moroni from April 29 – May 13, to discuss progress on economic and financial policies and reforms in the context of the fourth review of the 4-year Extended Credit Facility (ECF)-supported program. The Comorian authorities and the IMF team have reached a staff-level agreement, subject to approval by the IMF's Management and Executive Board. Completing the review will make available SDR 3.56 million (about [US$4.7] million) to Comoros, bringing total disbursements so far under the arrangement to about [$23.5] million.
Today, Ms. Tambunlertchai issued the following statement:
"Economic activity softened in 2024, on the back of subdued exports, modest imports, and weak private sector credit growth. Headline inflation, driven largely by rising prices of imported food products, peaked at 8.7 percent (year-on-year) in September but moderated to 6 percent by year-end. Tax revenue underperformed, as it fell short of the programed target by about 0.4 percentage points of GDP. Large current transfers—mainly remittances and project grants—helped offset the trade imbalance, containing the current account deficit to 2.2 percent of GDP. Gross international reserves increased from US$320 million at end-2023 to US$340 million at end-2024, equivalent to about 7.4 months of prospective imports. The financial sector continues to face significant challenges. However, reforms are underway to strengthen supervision and regulatory frameworks. The restructuring of the postal bank SNPSF (Société Nationale des Postes et Services Financiers) into the Postal Bank of Comoros (BPC) is welcome progress and the full operationalization of the new bank will be a key milestone.
"Performance under the ECF-supported program has weakened, with only two out of five quantitative end-December 2024 targets met. The missed tax revenue target and higher-than-expected expenditures contributed to the missing of the primary balance target. Continued challenges with liquidity and cash management resulted in the accumulation of new external arrears, underscoring persistent gaps in public financial management. Despite progress with the implementation of structural reforms, the authorities missed three out of the ten structural benchmarks due between November 2024 and April 2025.
"The authorities are committed to undertaking corrective actions for the missed targets. Short-term measures to ensure the proper application of the tax laws and the collection of tax arrears will boost revenue collection. Additionally, all external debt service arrears accumulated since the start of the year have been cleared, and discussions to resolve legacy arrears, including those related to Bpifrance, are ongoing.
"Discussions with the authorities addressed the need to reinvigorate the reform momentum and advance structural reforms to strengthen domestic revenue mobilization, improve public financial management, and enhance oversight of state-owned enterprises (SOEs). On the lattermost, the mission welcomes the recent appointment of the Director for the Directorate of Government Holdings and Monitoring of Public Institutions as a key step towards greater oversight of SOEs. The mission also discussed reforms in the financial sector, the operationalization of the BPC, the government's social spending plans, and progress on implementing the 2023 anti-corruption law.
"Comoros continues to face structural vulnerabilities common to small island economies. Continued implementation of the ECF-supported program will safeguard macroeconomic stability, advance critical structural reforms, and catalyze additional financial support for the country's large financing needs. The authorities have reaffirmed their strong commitment to the reforms supported under the program.
"The mission team met with His Excellency President Azali, Secretary General of the Government Nour El Fath Azali, Minister of Finance Ibrahim Mohamed Abdourazak, Central Bank Governor Younoussa Imani, and other senior government officials. The team also met with commercial banks, the Chamber of Commerce, the donor community, and other important stakeholders. The IMF team is grateful to the authorities and all other counterparts for the excellent cooperation, as well as the candid and constructive discussions."
