IMF unveils $21,5m Comoros package

The International Monetary Fund (IMF) has unveiled a three-year $21,5-million package for the Comoros to help consolidate economic gains as the archipelago implements far-reaching reforms.

The heavily indebted Indian Ocean islands will target annual real gross domestic product growth of three to four percent by 2012, compared to a forecast 1% for this year, the IMF said on Monday.

The import-dependent nation will have immediate access to $6,7-million.

“Comoros’ performance under the [emergency post-conflict assistance] programme was satisfactory, despite the difficult domestic and external circumstances,” said Takatoshi Kato, acting chairperson of the IMF’s executive board.

The Washington-based institution said year-on-year inflation would fall to 2,3% in 2009 from 7,4% the previous year, thanks to the falling costs of fuel and transportation.

Under the medium-term targets set by the Comoros and IMF, the country will aim to contain inflation at 3% by 2012.

The Comoros, sandwiched between Madagascar and southern Africa, has a turbulent history with about 20 coups, or attempted coups, since declaring independence from France in 1975.

Last year, the African Union led a military intervention to remove the self-declared rebel leader Mohamed Bocar from power on the island of Anjouan.

Since then, tensions have waned and the government has begun putting in place a raft of reforms to cut its own wage bill, increase tax revenue and bolster private sector-led growth.

Improved control of personnel expenditures should see the domestic primary budget deficit narrow to 1,6% of GDP this year, against 2,7% in 2008, the IMF said.

“Achieving the 2009 fiscal targets will provide confidence regarding government determination to improve public expenditure management and put the budget on a sustainable path,” said Kato.

To achieve its medium-term objectives, the Comoros will increase public spending by an estimated 1,7% of GDP and raise domestic revenue to the equivalent of at least 14% of GDP in 2012.

The lending body noted export growth remained subdued given persistently low world prices for Comoros’ export commodities such as vanilla and ylang ylang.—Reuters

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