IMF Reaches Staff-Level Agreement on a Four-Year Extended Credit Facility with the Union of the Comoros

May 8, 2023

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
  • IMF staff and the Comorian authorities have reached a staff-level agreement on economic policies and reforms to be supported by a new 4-year arrangement under the Extended Credit Facility (ECF), with requested access of SDR 32.04 million (around US$43 million). This staff-level agreement is subject to IMF Management approval and consideration by the IMF Executive Board.
  • The ECF aims to preserve Comoros’ macroeconomic stability and, building on the recently completed Staff-Monitored Program (SMP), advance structural reforms to reduce fragility and foster economic resilience while creating fiscal space for sustainable and inclusive growth.
  • The ECF will support the authorities’ plans for gradual fiscal consolidation, strengthening the financial sector, and advancing progress on anti-corruption. Steadfast reform implementation, continued capacity development, and financing support from Comoros’ international partners will be critical for the success of the program.

Washington, DC: An International Monetary Fund (IMF) team led by Ms. Suchanan Tambunlertchai, Mission Chief for the Union of the Comoros, visited Moroni during March 8 – 23 and held follow-up virtual meetings and in Washington DC during April 5 – 28, with the authorities to discuss IMF support for Comoros’ macro-economic policies and reform plans.  

Ms. Tambunlertchai issued the following statement today:

“The IMF team has reached staff-level agreement with the Comorian authorities on a 4-year program under the Extended Credit Facility (ECF), with requested access of SDR 32.04 million (about US$43 million). This agreement is subject to approval by the IMF Management and Executive Board, with Board consideration expected in the coming weeks.

“This is the first Upper Credit Tranche-quality program for Comoros supported by the IMF since 2013. The program will build on the recently completed Staff-Monitored Program and seek to: (i) support the authorities’ fiscal consolidation efforts to create fiscal space for development needs and reduce debt sustainability risks, underpinned by fiscal structural reforms aimed at domestic revenue mobilization; (ii) strengthen the financial sector, including completing the restructuring of the state-owned postal bank SNPSF; and (iii) advance governance reforms to improve public financial management and further reduce corruption vulnerabilities.

“Comoros has been hit by several successive external shocks in recent years, including Cyclone Kenneth in 2019, the COVID-19 pandemic in 2020-21, and fallout from Russia’s war in Ukraine. Economic recovery has been hampered by the lingering impact of high global commodity prices, with inflation reaching 20.6 percent and annual growth estimated at 2.6 percent in 2022. Fiscal revenues fell by 0.5 percent of GDP with external grants declining by 2.3 percent of GDP, significantly tightening financing constraints. Although considerable uncertainty remains in the global outlook, the economic recovery is expected to continue, with growth accelerating to 3 percent and average inflation declining to 10.3 percent this year.

“The government’s fiscal policy is centered on a gradual medium-term fiscal consolidation plan, underpinned by revenue administration, tax policy, and public financial management reforms. This strategy calls for enhanced coordination within the Ministry of Finance, and across public agencies including to mitigate fiscal risks stemming from state-owned enterprises. These reform efforts are critical to create fiscal space for much-needed investment in social development, including health and education, and infrastructure while maintaining fiscal and debt sustainability to reduce economic fragility.

“The ECF will support the authorities’ effort to wind down the SNPSF and operationalize the new Banque Postale des Comores based on a business plan that will limit fiscal contingent liabilities risk. Measures to enhance the Central Bank’s banking supervision and resolution capacities will ensure financial stability and a sound financial system that can promote growth and reduce poverty through greater financial inclusion.

“Continued efforts to strengthen governance and reduce corruption vulnerabilities, including the adoption of the revised anti-corruption law, will be key to improve the overall business climate. 

“The IMF staff team met with H.E. President Azali Assoumani; H.E. Mzé Abdou Mohamed Chanfiou, Minister of Finance; Mr. Younoussa Imani, Governor of the Central Bank of Comoros; Mr. Fouady Goulame, Commissioner of Planning; Mr. Oubeidi Mzé Chei, Counsel to the Minister of Finance; and other officials from the Ministry of Finance and the Ministry of Economy, the National Institute of Statistics, the Social Safety Net Project, and the Pension Fund. The team also met with representatives of key state-owned enterprises, the Chamber of Commerce, and key bilateral and international partners.

“The team would like to thank the authorities for their hospitality and cooperation, and open and constructive discussions.”

 

More information on ECF: Extended Credit Facility

 

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Pavis Devahasadin

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson