Press Release No. 11/17

Press Release: IMF Executive Board Completes Second Review Under ECF Arrangement with the Union of the Comoros and Approves US$2.42 Million Disbursement

January 21, 2011

The Executive Board of the International Monetary Fund (IMF) today completed the second review of the Union of the Comoros’ economic performance under a program supported by the Extended Credit Facility (ECF). The Board’s decision enables the immediate disbursement of an amount of SDR 1.56 million (about US$2.42 million), bringing total disbursements under the ECF to the Comoros to SDR 7.34 million (about US$11.41 million). The Executive Board also approved a modification of the end-2010 performance criterion on net domestic credit to the government.

At the conclusion of the Executive Board's discussion on the Comoros, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:

“Economic performance under the ECF-supported program has been broadly satisfactory. Despite a challenging political environment, economic activity is accelerating and efforts are made to build on progress to date in macroeconomic management. Initiatives are in place to remove structural impediments to growth and make further inroads into poverty alleviation.

“Recent fiscal slippages need to be addressed by strengthening revenue mobilization and containing the wage bill with a view to channeling resources to pro-poor and pro-growth programs. Additional action is also needed to improve the efficiency of tax and custom administration and reform the budget process.

“The authorities’ prudent debt management and good faith efforts in reaching debt restructuring understandings with all external creditors are essential to addressing Comoros’ unsustainable external debt.

“On the structural front, renewed efforts are needed to improve the business environment and the management of public utilities. Progress in these areas will bolster Comoros’ competitiveness. In particular, enlisting private sector participation in the management of the telecommunications, electricity, and oil-importing parastatals remains a priority. In the financial sector, the authorities need to further reinforce banking oversight.

“A continued commitment to the macroeconomic and structural reform agenda as well as a national consensus on policy direction will be crucial for the program’s success,” Mr. Shinohara added.