THE ECONOMY OF THE UNION OF THE COMOROS
In 2011, the economic activity of the Union of the Comoros experienced continued growth and development. A 1.9% growth in the real gross domestic product (GDP) was registered in 2009, followed by 2.2% in 2010.
OGDP was estimated at 2.6% in 2011. This recovery is primarily attributable to the surge in activity in the building sector, the strengthening of the financial sector, the good agricultural production, and to remittances from the diaspora as well. Despite an unfavourable international situation, expatriates’ remittances, which represent one of the major sources of funding and support to the Comorian economy, maintained momentum and have been facilitated by the opening of Comorian post counters in France.
Prices for main commodities (vanilla, clove and ylang-ylang) are experiencing gradual recovery in the international market as compared to these past years. According to the economic assessment of the Central Bank for the 1st semester 2011, the vanilla sector is gradually rising, after weathering difficult economic situations these past years following forest fires that devastated much of the vanilla plantations in one of the most productive regions. Vanilla production is estimated to be more than 50 tons in 2011 against 30 tons in 2010.
Ylang-ylang, whose flower is a valued commodity in the perfume industry and of which Comoros remain the leading world producer, is currently in the upswing stage, with a production which should exceed 50 tons. On the other hand, clove, the first cash production in terms of quantity, saw a steep drop at 2 500 tons, after producing 4 000 tons in 2010. The fall in prices of ylang-ylang observed in 2009 eased and a reversal trend is expected. Regarding food production, the sector is benefiting from revival avenues with the signature of a partnership agreement between the Comorian government and AMIE (a support project to micro-enterprises), backed by the donor community in order to improve food production.
Donors such as the UE, the AFD, IFAD, have set up credit lines in micro- finance institutions providing safeguards to productive credit arrangements. Despite the agricultural potential in Comoros and burgeoning initiatives to promote it, food production is still being hampered by the low level of mechanisation, difficulties in transport and foodstuff preservation. The fisheries sector employs 6% of the labour force. Constraints in the sector are the practice of craftsmanship, the lack of infrastructure, exaggerated selling prices and maritime insecurity. As part of the new Fisheries Protocol signed with the EU, the Comorian government benefited from 12 additional vessels and an annual allocation of 300 000 euros to improve port infrastructure in Comoros. The livestock sector is under intense competitive pressure by imported meat and poultry. However, progress has been made in cattle farming, particularly in dairy production. The secondary sector faced a slight slowdown linked to the world economic and financial crisis due to the high degree of dependency the sector has on imported products (fuel, building material, etc.), whose prices have increased in the world market.
The power generation sector improved slightly, adding more strength and vitality to the secondary and tertiary sectors. The tourism industry remains underdeveloped despite the tourism potential available in Comoros. The construction of a hotel on the site of former Galawa, estimated to cost USD 70 million, has been entrusted to contactors in Qatar. Today, this sector is dominated by visits from Comorian expatriates who live overseas and return home to visit family and friends.
Services and retail trade, which were affected by the crash Yemenia Air flight on 30 June 2009, are gradually recovering and the flow of arrivals at the Comorian border are on the upswing. The purpose of the tourism sector, identified as a priority area in the Poverty Reduction Strategy Paper, is to increase its intake from 500 to 2 000 beds in 2014 and generate 2 500 jobs. In general, exports of goods have gone up. Despite a lower production, clove was the chief export, generating 1 .7 billion KMF in income (source BCC).
For vanilla, exports grew by 27% in 2011, generating 308 million KMF against 226 million in 2010. The first semester 2011 recorded an 11% increase of the CIF value of imports. Imports of petroleum products rose by 4% in value during that same period. Comoros have entered into partnership with the emerging countries. As part of the relationships with the Arab League, the countries on the Arabian Peninsula and those of the Gulf Cooperation Council support development efforts in Comoros. During the Doha Conference, which took place in 2010, agreements containing liabilities worth more than 500 million USD have been signed.
As part of the Document on the Growth and Poverty Reduction Strategy (DGPRS), Comoros are implementing a reform agenda under the FEC. The IMF also pledged an estimated USD 20 million; The Union of the Comoros could benefit from an irrevocable debt relief and, under the Multilateral Debt Relief Initiative (MDRI), could have its eligible debt cancelled by the IMF, the International Development Association (IDA) and the African Development Fund (ADF). To do so, the country must properly maintain macroeconomic stability, implement its national poverty reduction strategy and improve public finance management.
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