Comoros - The economy

Report No. 1626a-COM A The Economy of the Comoros July 26, 1977 Eastern Africa Regionial Office FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties Its ccrtents may not otherwise be disclosed without World Bank authorizat on  CURRENCY EQUIVALENTS End of period Yearly Average 1968 US$1.00 CFAF 246.85 CFAF 246.85 CFAF 1 = US$0.0041 US$0.0041 1969 US$1.00 = CFAF 277.71 CFAF 259.71 CFAF 1 US$ 0.0036 US$0.0039 1970 US$1.00 = CFAF 277.71 CFAF 277.71 CFAF 1 US$0.0036 US$0.0036 1971 US$1.00 = CFAF 255.79 CFAF 277.03 CFAF 1 US$0.0039 US$0.0036 1972 US$1.00 = CFAF 255.79 CFAF 252.21 CFAF I US$0.0039 US$0.0040 1973 US$1.00 CFAF 230.21 CFAF 222.70 CFAF 1 US$0.0043 US$0.0045 1974 US$1.00 = CFAF 222.22 CFAF 240.50 CFAF I US$0.0045 US$0.0042 1975 US$1.00 = CFAF 224.27 CFAF 214.32 CFAF 1 US$0.0045 US$0.0047 1976 US$1.00 = CFAF 248.49 CFAF 238.98 CFAF 1 US$0.0040 US$0.0042 FISCAL YEAR January 1st to December 31  FOR OFFICIAL USE ONLY Foreword This report is based on the findings of a mission to the Comoros in November/December, 1976 consisting of Messrs. P. Landell-Mills (chief of mission) and M. Ragno (general economist). The report also incorporates the findings of a transport sector mission consisting of Ms. F. Johansen (transport economist) and Messrs. G. Orsini (roads engineer) and D. Raymond (ports specialist) which visited the Comoros in March, 1977. The report was discussed with Comorian Government in June, 1977 and subsequently updated. This document has a rstcted ditribution aNd ay be wd by recpients onry in the perfornnce of their offci dutim. its contents may not oiferWi be dicled Without Wodd Dank authodxuion.   THE ECONOMY OF THE COMOROS TABLE OF CONTENTS Page No. MAPS BASIC DATA SUMMARY AND CONCLUSIONS ........................................ i-vii INTRODUCTION .........1............. I PART A: THE SETTING 1. THE COUNTRY .... 2 General Features .................... 2 Grande Comore .................... . 3 Anjouan ..............., 4 Mayotte .................. ... 4 Moheli.. 5 2. THE PEOPLE . ...........5....... 5 Their History ................... ...,. 5 Characteristics of the Population . . 6 3. POLITICAL SITUATION ........8........ 8 Recent Political and Institutional Developments.. 8 Fundamental Reform . . . 10 4. PLANNING FOR DEVELOPMENT .................................. 11 Past Plans ...11 The Need for Planning ...12 Strategy for I)evelopment ...13 PART B: STRUCTURE OF ECONOMIC ACTIVITIES AND RECENT TRENDS 1. SALIENT FEATURES OF THE ECONOMY .16 Production, Incomes and Investment .16 Employment Wages and Prices . .19 2. MONEY BANKING CREDIT . ... 23 The Monetary System . .23 Recent Trends in Money and Credit . .26  TABLE OF CONTENTS (Cont'd) Page No. 3. EXTERNAL TRADE AND PAYMENTS ............................. 30 Comoros Structural Trade Deficit .................... 30 Export Performance ** .............................. ... 31 Characteristics of Imports ..... ..................... 34 Balance of Payments . ......................... ...... 36 4. PUBLIC FINANCE .. .............. . ......O... 37 Overview ....... ...................................... 37 Structure of Public Operations ...... ................ 39 The Fiscal System and Recent Revenue Trends .... ..... 40 The Pattern of Government Expenditure .... ........... 42 Public Investment 1970-1975 ................... ..... 44 The Budgetary Situation in 1976 and Outlook for 1977 .................................... 45 PART C: THE SECTORS: CHARACTERISTICS AND ISSUES 1. THE RURAL SECTOR .................... o .................... 48 Level and Trends in Agricultural Production ......... 48 Competition between Different Land Uses ...... ....... 52 Agricultural Services .. ............... ............. 54 Problems and Prospects -for the Principal Crops ...... 56 The Need to Expand Food Production ....... .. ......... 61 Forestry: A Crisis Situation .......... .. .......... 62 Opportunities for Fisheries Development ............ . 64 2. INDUSTRY ................................................ 66 Existing Activities .................................. . 66 The Construction Industry ........... .. .............. 67 Potential for Industrial Diversification ..... ...... 68 3. TOURISM .................. * ............................... 70 4. INFRASTRUCTURE ........................................... 74 Transport Constraints .................... o .......... 74 Sea Transport ...................................... 75 Civil Aviation ..................................................... 77 Road Communications ................................. 78 Telecomunications and Postal Services ............. ... 80 Power Supplies ...................................... 81 Water Supplies ....... ............................... 82  TABLE OF CONTENTS (Cont'd) Page No. 5. EDUCATION ............................. ......... 83 Background .......................................... 83 The Colonial Heritage. . ............. . ... ..... 84 Educational Reform ...................................... 88 6. HEALTH SERVICES ................... , . ....... . ..... 91 PART D: PROSPECTS AND NEEDS 1. OUTLOOK FOR DEVELOPMENT . ............. ...... *v.* .......... 94 2. SOME KEY DEVELOPMENT ISSUES . ............................ . 95 Explosive Population Growth ............ ............. 95 Rural Development ........................................... 97 Diversification ......... I .......................... 98 3. ROLE OF EXTERNAL ASSISTANCE ...... . ........................ 98 PART E: ANNEXES Annex I: The Development of Transport Annex II: Note on the Constitution of April 23, 1977 Annex III: Statistical Tables   LIST OF TEXT TABLES 1. Population by Island, Mid-1976 2. Growth of Production and Income 3. Sectoral Composition of GDP 4. Use of Resources 5. Occupations of the Active Population, 1966 6. Registered Salaried Employment 7. Registered Salaried Employment by Island 8. Average Annual Salaries in Selected Sectors 9. Selected Price Indices 10. Assets and Liabilities of the Banking System 11. Distribution of Short-Term Credit to the Private Sector 12. Medium- and Long-Term Credit 13. Summary of Foreign Trade 14. Trends in Principal Export Commodities 15. Trends in Selected Imports 16. Imports Adjusted to Take into Account the Bonded Warehouse 17. Foreign Trade Indices 18. Summary of Balance of Payments Estimates 19. Summary of Financial Situation 20. . Central tGovernment Current Revenue 1970-75 21. Government Expenditure 1970-1975 22. Current Government Expenditure 23. Percentage Distribution of Current Government Expenditure by Sector, 1970 and 1975 24. Financial Position of the Treasury 25. Volume Indices for Principal Agricultural Products, 1952-75 26. Exports of Principal Agricultural Products, 1970-1975 27. Principal Agricultural Exports by Island, 1974 28. Average Annual Value of Agricultural Exports by Island, 1973-74 29. Land CapabilitY by Type 30. Actual Land Use by Island, 1965 31. Some Data on Yields of Traditional and Improved Crop Varieties 32. Forest Areas, 1968 and 1974 33. Tourist Infrastructure 34. Total Number of Visitors 35. Proposed Investment in New Hotel Accommodation 36. New Registrations of Vehicles and Cumulative Total 37. Road Network, April 1977 38. Electricity Production by EDC 39. School Enrollments 40. Qualifications of Primary School Teachers 1974-75 41. Number of Students Overseas   I8RD 12739 43J40' 43-45' 43