THE ECONOMY OF THE UNION OF THE COMOROS

The state economy is characterised by the predominance of agriculture, fishing and farming, which represents more than 40 % of the GDP. The farming sector constitutes of the main part of the receipts of export of the country (90% of the exports) and it is thanks to the products of cash crops (Vanilla, clove and ylang-ylang).

La BIC - Moroni

According to the note of conjuncture of the fi rst half of the year 2008 of the Central Bank, the vanilla sector crossed a diffi cult situation in relation with the decline of world prices of this product and also underwent an important loss of its production, due to forest fi res which devastated a large part of the plantations of the most productive region of Ngazidja. Clove, the fi rst production of cash crops in terms of quantity, will register a decline of 3000 tons, then 3500 tons in 2007 and 2500 tons in 2006. The sector continues to benefi t from favourable world prices whereas the production of ylang-ylang should maintain at the level observed during the past two years. The pricing policy of sale of produced essences, except for the «third» category which is sold by weight, seems to show its satisfactory results. Each island has its specialisation in the production of cash crops, Ngazidja produces much more vanilla and Anjouan focuses on the production of the ylang-ylang and clove. Regarding food production, only one third of the agricultural production is marketed, a big part being intended for auto-consumption. Tracks for re-launching the sector are in progress and are supported by the landlords’ community. Six cultures are identifi ed to boost the agricultural production which would come as a supplement to the consumption of rice. It is about food products: bananas, potato, manioc, sweet potato, yam and taro. This sector is facing competition from imports coming from East Africa in particular Tanzania.

A study of the central bank (2006) highlighted the specifi city of the food production in every island; Mohéli is the prime producer of banana and coconut, whereas Anjouan favours the production of yam, taro and onion and whereas Ngazidja produces manioc, sweet potato and potatoes much more. This food-producing sector benefits from international aids through programs for development and fi ght against poverty. Through these programs, partners such as the European Union, the AFD, FIDA, have set up credit lines in the micro fi nance institutions establishing guarantees in the granting of the productive credits. In the vegetable sector, the production of cereal, legumes, fruits and vegetables increased respectively by 1, 01%; 1, 63; 2, 74 and 1, 7% in the year 2007. The fi shing sector employs 6 % of the active population, which, depends directly or indirectly on this sector (fi sherman and salesman). In 2006, this sector generates a turnover estimated at 17 billions FC, representing about 10% of the GDP (BCC source).

The constraints of this sector are the practice of craft techniques, the lack of infrastructure, the high selling price and the insecurity at sea. Within the framework of a COI project supported by the European Union, the country has been equipped with a centre for national monitoring and surveillance of fi sheries. From 2003 till 2004, the sector of the breeding has had negative effects by bovine disease. The sector is dominated by the imports of zebus from the countries of the sub-region. These last years, the central bank recorded an increase of 5 % of the beef herd and the quantities of produced milk. Another upward trend of the sector is observed at the level of the quantities of ovine/goats produced. The poultry sector is in decline, the diffi culties of the sector are the exaggerated costs of the production with regard to the selling prices and a strong competition from the imported deep-frozen products. The tourism sector is underexploited and presents natural possibilities. As part of the Strategic Document for the Reduction of the Poverty, several initiatives were taken by the Comorian government to encourage foreign investors as for example the project constructing a tourist village to the North of Ngazidja. Generally speaking, the exports of the goods in 2007 progressed by 21 % compared to the year 2006, thus reducing the deterioration of trade defi cit of the previous years. Clove constituted the main export and generated income of with 58% of the earnings from exports. The country is not selfsuffi cient and imports more foodstuffs. The year 2007 registers an increase of 10% of the imports of basic food (rice, meat, fi sh, fl our and dairy products), and oil products.

The import of cement decreased on the other hand probably because of the exceptional nature of the volume recorded in 2006, but also because of the diffi culties observed for the supply and the fi nancing of certain operations upon the import of this product. This drop had effects on the imports of the other building materials with a fall of 53% in volume and 59% in value (BCC source). The Comoros concluded an agreement with the IMF and had set up in October 2008, a post confl ict program for six months. This program would allow them to prepare an “Ease for the Reduction of Poverty and for Growth” (FRPC) and to benefi t from a reduction of their foreign debt (70% of the GDP) within the framework of the Initiative of the Heavily Indebted Poor Countries (IPPTE). The macroeconomic indicators show good perspectives especially with the balancing of the arrears of the BAD in December 2007, the resolution of the Anjouan crisis, as well as the economic reforms engaged by the government.

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