Press Release: Concluding Statement of the IMF Mission to Comoros
March 22, 2013Press Release No. 13/89
March 22, 2013
A team from the International Monetary Fund (IMF), visited Moroni from March 13 to 22, 2013 for discussions on the fifth review of the Union of Comoros’ Extended Credit Facility (ECF)1 arrangement. The mission met with His Excellency Dr. Ikililou Dhoinine, President of the Union, and held discussions with Vice-President and Finance Minister Soilihi, Governor of the Central Bank of the Comoros Chanfiou, Permanent Secretary of the Committee to Monitor Reforms Oubeidi, and other government and central bank officials, as well as representatives of the private sector and the donor community.
The current arrangement under the ECF was approved in September 2009 (see Press Release No. 09/315). At the conclusion of the fourth review in December 2012 the Executive Board of the IMF also agreed that Comoros had reached the completion point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative (see Press Release No. 12/492).
At the conclusion of the mission, Mr. Harry Trines, the IMF mission chief for the Union of the Comoros, issued the following statement today in Moroni:
“The mission has reached staff-level understandings with the authorities on policies for completing the fifth ECF review. Consideration by the IMF’s Executive Board of the review is tentatively scheduled for May, following approval by Management of the IMF. Completion of this review will enable Comoros to receive a disbursement of SDR 2.3 million (about US$3.45 million) from the IMF.
“Performance under the program has been satisfactory. All the quantitative targets for end-December 2012 were met, as were four of the five structural benchmarks under the program.
The Government has continued to make determined efforts to implement the economic and structural reforms outlined in the program with the IMF and supported by Comoros’ partners.
“Economic indicators improved in 2012. Gross domestic product growth strengthened to around 3 percent, including as a result of a pick up in investments and a normalization of wage payments in the public sector. Reserves reached the equivalent of 7 months of imports and the domestic primary budget surplus more than doubled, mainly owing to a large increase in receipts under the Economic Citizenship Program.
“Broad debt relief received under the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative has lowered the country’s future debt service obligations, allowing a reorientation of expenses toward social priority areas such a health, education, energy, and infrastructure. However, important challenges remain going forward to establish a basis for rapid sustainable growth and poverty reduction in the country.
“The mission discussed with the Government the economic prospects for the coming year, revisions to the 2013 budget to reorient spending toward priority areas, and structural reform measures needed to achieve the Government’s medium-term objectives. Areas of focus included the implementation of the organizational frameworks for the public administration, continued improvement in banking supervision, privatization of Comores Telecom, and reforms of the public utility (MAMWE) and “Société Comorienne des Hydrocarbures,” with the help of the African Development Bank, the European Union, and the World Bank. Establishing reliable electricity and energy supplies is crucial to sustaining economic growth and improving the business environment. A continued prudent borrowing policy will also be important.
“The mission welcomes the authorities continued commitment to the implementation of the reform program. It would also like to thank the authorities for the excellent cooperation and warm hospitality during the mission’s visit.”
1 The Extended Credit Facility (ECF) provides financial assistance to countries with protracted balance of payments problems. The ECF was created under the newly established Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund's financial support more flexible and better tailored to the diverse needs of Low Income Countries (LICs), including in times of crisis. The ECF succeeds the Poverty Reduction and Growth Facility (PRGF) as the Fund's main tool for providing medium-term support to LICs, with higher levels of access to financial resources, more concessional financing terms, more flexible program design features, as well as streamlined and more focused conditionality.