During the colonial period, the French and local leading citizens established plantations to grow cash crops for export. Even after independence, French companies, such as Société Bambao and Établissements Grimaldi--and other concerns, such as Kalfane and Company and later, President Abdallah's Établissements Abdallah et Fils--dominated the Comoran economy. These firms diverted most of their profits overseas, investing little in the infrastructure of the islands beyond what was needed for profitable management of the plantations, or what could benefit these businesses' associates or related concerns. A serious consequence of this approach has been the languishing of the food-crop agricultural sector and the resultant dependence on overseas food imports, particularly rice. In 1993 Comoros remained hostage to fluctuating prices on the international market for such crops as vanilla, ylang-ylang, and cloves.
Comoros is one of the world's poorest countries; its per capita gross national product (GNP) was estimated at US$400 in 1994, following the January devaluation of the Comoran franc. Although GNP increased in real terms at an average annual rate of 3.1 percent during the 1980s, rapid population growth effaced these gains and caused an average annual decrease in per capita GNP of 0.6 percent. Gross domestic product (GDP) grew in real terms by 4.2 percent per year from 1980 to 1985, 1.8 percent from 1985 to 1988, and 1.5 percent in 1990. In 1991, because of its balance of payments difficulties, Comoros became eligible for the IDA's Special Program of Assistance for debt-distressed countries of sub-Saharan Africa.
The economy is based on private ownership, frequently by foreign investors. Nationalization, even during the Soilih years, has been limited. Soilih did expropriate the facilities of a foreign oil company, but only after the government of Madagascar took over the company's plants in that country. The Abdallah government, despite its openness to foreign participation in the economy, nationalized the Société Bambao and another Frenchcapitalized firm, the Comoran Meat Company (Société Comorienne des Viandes--Socovia), which specialized in sales of meat and other foods in the islands. The nationalization was short-lived, however, because Socovia and other government-held enterprises were either liquidated or privatized as part of economic restructuring efforts in 1992.
Following the Abdallah regime's rapprochement with France in 1978, the Comoran economy became increasingly dependent on infusions of French aid, along with assistance from other governments and international organizations. By 1990, the year Comoros concluded negotiations with the IMF for an economic restructuring program, the republic's total external public debt was US$162.4 million, an amount equal to about three-quarters of GNP. The government delayed implementing the structural adjustment plan and was directed by the World Bank and the IMF to do so by September 1992. The plan recommendations entailed discharging about 2,800 of 9,000 civil servants, among other unpopular measures. The IMF granted Comoros a new credit for US$1.9 million in March 1994 under the Structural Adjustment Facility. For the period 1994-96, Comoros sought an economic growth rate of 4 percent as well as an inflation rate of 4 percent for 1995-96. The growth rate for 1994, however, was estimated only at 0.7 percent and the inflation rate at 15 percent. Meanwhile, in a move designed to encourage private enterprise and reduce unemployment, in May 1993 the UN Development Programme had given Comoros a credit of US$2 million for programs in these areas. In January 1994, the European Development Fund (EDF) granted 1.3 million European Currency Units (ECUs) to Comoros to develop small businesses. Comoros also received 5.7 million French francs from the French Aid and Cooperation Fund for agriculture and rural development.
The results of foreign aid to Comoros have been mixed at best. The purposes of the aid ranged from helping the government cover its payroll for such huge, seemingly endless projects as expanding the seaport at Moroni and developing a new port at Mutsamuda on Nzwani. Neither project had shown much promise by early 1994. Meanwhile, the islands have been unable to develop local resources or create the infrastructure needed for economic development. The few successes included the creation of national news media and limited improvements in public health, education, and telecommunications. Developmental assistance from the United States, which totaled US$700,000 in fiscal year (FY) 1991, was administered by CARE, the nongovernmental organization, and focused primarily on reforestation, soil conservation, and sustainable agriculture.
The overall effect of the republic's dependence on aid has been perennial trade deficits accompanied by chronic budget deficits. In 1992 total exports had a value of US$21 million, and total imports were valued at US$50 million. In 1991 receipts totaled about US$34.7 million (CF9.7 trillion; CF--Comoran franc) whereas expenditures totaled about US$93.8 million (CF26.2 trillion). The shortfall, which equaled about 170 percent of receipts, was financed by international grants and loans, by draws upon existing lines of credit, and by debt rescheduling.
In 1991 France received 55 percent of Comoran exports, followed by the United States (19 percent) and Germany (16 percent). The main export products were vanilla, ylang-ylang, and cloves. The republic's primary suppliers were France (56 percent of imports), the Belgium-Luxembourg economic union (11 percent), and Japan (5 percent). Imports consisted of basic foodstuffs (rice and meat), petroleum, and construction materials.
Comoros has officially participated in the African Franc Zone (Communauté Financière Africaine-- CFA) since 1979. The CFA franc was devalued by 50 percent on January 12, 1994, causing the exchange rate to become 100 CFA francs for one French franc. Subsequently, the Comoran franc was devalued so that instead of being directly aligned with the CFA franc, seventyfive Comoran francs equaled one French franc.
The banking system consists of the Central Bank of Comoros (Banque Centrale des Comores) established in 1981; the Bank for Industry and Commerce (Banque pour l'Industrie et le Commerce-- BIC), a commercial bank established in 1990 that had six branches in 1993 and was a subsidiary of the National Bank of Paris-- International (Banque Nationale de Paris--Internationale); BIC Afribank, a BIC subsidiary; and the Development Bank of Comoros (Banque de Développement des Comores), established in 1982, which provided support for small and midsize development projects. Most of the shares in the Development Bank of Comoros were held by the Comoran government and the central bank; the rest were held by the European Investment Bank and the Central Bank for Economic Cooperation (Caisse Centrale de Coopération Économique--CCCE), a development agency of the French government. All of these banks had headquarters in Moroni.
A national labor organization, the Union of Comoran Workers (Union des Travailleurs des Comores), also had headquarters in Moroni. Strikes and worker demonstrations often occurred in response to political crises, economic restructuring mandated by international financial organizations, and the failure of the government--occasionally for months at a time--to pay civil servants.
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