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Comoros is the smallest economy in the series, with some 870,000 people on three islands and a GDP of little over USD 1.3 bn. It is also among the least indebted. Public debt is 33% of GDP, interest takes about 5% of revenue, the deficit is narrowing to 1.4% of GDP, and reserves of eight to nine months back a euro peg guaranteed by France. Growth of 3.5–4% continues under an IMF Extended Credit Facility that has passed five reviews. On the fiscal and external pillars the readings are Category 1, yet the IMF rates the risk of debt distress as high.
The paper explains the contradiction as narrowness. Exports of vanilla, cloves and ylang-ylang are only 4% of GDP. Remittances from the diaspora in France, about a fifth of GDP, fund consumption and a food-import bill covering 95% of cereals. Domestic revenue is 11–12% of GDP, non-performing loans are near 20%, government effectiveness sits in single-digit percentiles, undernourishment is about 20% and poverty about 40%. The authors argue that debt is low because little was lent, and that low debt in a narrow economy is a fragile asset.
The road map therefore focuses on capacity rather than consolidation. Comoros needs revenue, a working banking system and a productive base that would let the state carry its Category 1 balance sheet on its own account, and it needs to turn remittances into investment.
Key findings
- Government effectiveness would rise from about the 8th to the 20th percentile through a civil-service census, payroll audit, digital financial management and a single inter-island fiscal framework.
- Domestic revenue would rise from 11–12% to 15% of GDP through customs and VAT modernisation and taxation of telecoms and the formal wage sector, with no non-concessional borrowing until that level is reached.
- Exports would double to 8% of GDP through vanilla curing, essential-oil distillation, fisheries processing and tourism, while Karthala geothermal and solar power replace diesel.
- A diaspora bond and a matched-investment scheme would aim to channel remittances worth at least 3% of GDP into housing, enterprise and infrastructure.
- Resolving the state postal bank and licensing mobile money would bring non-performing loans below 10% and credit toward 30% of GDP.
Summary of the paper; the full analysis is in the PDF.