Economy of Comoros
Encyclopedia
Comoros
is made up of three islands that have inadequate transportation links, a young and rapidly increasing population, and few natural resources. The low educational level of the labor force contributes to a subsistence level of economic activity, high unemployment, and a heavy dependence on foreign grants and technical assistance. Comoros, with an estimated gross domestic product
(GDP) per capita income
of about $700, is among the world's poorest and least developed nations. Although the quality of the land differs from island to island, most of the widespread lava
-encrusted soil formations are unsuited to agriculture. As a result, most of the inhabitants make their living from subsistence agriculture
and fishing
. Average wages in 2007 hover around $3-4 per day.
Agriculture, including fishing, hunting, and forestry, is the leading sector of the economy. It contributes 40% to GDP, employs 80% of the labor force, and provides most of the exports. The country is not self-sufficient in food production; rice
, the main staple, accounts for the bulk of imports.
The government is struggling to upgrade education and technical training, to privatize commercial and industrial enterprises, to improve health services, to diversify exports, to promote tourism, and to reduce the high population growth rate. Continued foreign support is essential if the goal of 4% annual GDP growth is to be met. At 24 percent of GDP, remittances constitute an important source of inflows for the Comorian economy.
Current GDP per capita of Comoros grew 55% in the Eighties. But this proved unsustainable and it consequently shrank by 42% in the Nineties.
Comoros is one of the world's poorest countries; its per capita gross national product (GNP--see Glossary) was estimated at US$400 in 1994, following the January devaluation of the Comorian 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-- see Glossary) 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; for value, see Glossary) 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--see Glossary) 1991, was administered by CARE, the nongovernmental organization, and focused primarily on reforestation, soil conservation, and sustainable agriculture.
Comoros has officially participated in the African Franc Zone (Communauté Financière Africaine-- CFA; see Glossary) 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.
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. Mean wages were $0.80 per manhour in 2009.
, involving more than 80% of the population and 40% of the gross domestic product, provides virtually all foreign exchange earnings. Services including tourism, construction, and commercial activities constitute the remainder of the GDP. Plantations engage a large proportion of the population in producing the islands' major cash crops for export: vanilla
, cloves, perfume
essences, and copra
. Comoros is the world's leading producer of essence of ylang-ylang
, used in manufacturing perfume. It also is the world's second-largest producer of vanilla, after Madagascar
. Principal food crops are coconut
s, banana
s, and cassava
. Foodstuffs constitute 32% of total imports.
Comoros is the world's principal producer of ylang-ylang
essence, an essence derived from the flowers of a tree originally brought from Indonesia that is used in manufacturing perfumes and soaps. Ylang-ylang essence is a major component of Chanel No. 5, the popular scent for women. The republic is the world's second largest producer of vanilla, after Madagascar. Cloves are also an important cash crop. A total of 237 tons of vanilla was exported in 1991, at a price of about CF19 per kilogram. A total of 2,750 tons of cloves was exported in 1991, at a price of CF397 per kilogram. That year forty-three tons of ylang-ylang essence were exported at a price of about CF23,000 per kilogram. The production of all three commodities fluctuates wildly, mainly in response to changes in global demand and natural disasters such as cyclones. Profits--and therefore, government receipts-- likewise skyrocket and plummet, wreaking havoc with government efforts to predict revenues and plan expenditures. Stabex (Stabilization of Export Earnings--see Glossary), a system of the EC, provides aid to Comoros and other developing countries to mitigate the effects of fluctuations in the prices of export commodities.
Long-term prospects for the growth and stabilization of the markets for vanilla and ylang-ylang did not appear strong in the early 1990s. Vanilla faced increased competition from synthetic flavorings, and the preferences of perfume users were moving away from the sweet fragrance provided by ylang-ylang essence. Copra, the dried coconut meat that yields coconut oil, once an important Comoran export, had ceased to be a significant factor in the economy by the late 1980s, when the world's tastes shifted from high-fat coconut oil toward "leaner" substances such as palm oil. Although clove production and revenues also experienced swings, in the early 1990s cloves did not appear to face the same sorts of challenges confronting vanilla and ylang-ylang. Most Comoran vanilla is grown on Njazidja; Nzwani is the source of most ylangylang .
Numerous international programs have attempted to reduce the country's dependence on food imports, particularly of rice, a major drain on export earnings. Organizations initiating these rural development programs have included the EDF, the IFAD, the World Food Program, the Arab Bank for Economic Development in Africa, the UN Food and Agriculture Organization, and the governments of France and the United States. Despite these international efforts, which numbered as many as seventeen in 1984, food production per capita actually declined in Comoros during the 1980s. The major clove and vanilla growers, whose plantations occupy the islands' fertile coastal lands, generally resisted these restructuring efforts, as did rice-importing firms, including the country's largest, Établissements Abdallah et Fils.
Crowded onto the mountain slopes by the cash crop plantations, food-crop farmers have caused deforestation and the erosion of the highlands' thin, fragile soil. In response, aid providers have dedicated an increasing amount of agricultural assistance to reforestation, soil restoration, and environmentally sensitive means of cultivation. For example, all United States agricultural aid in 1991 (US$700,000) was directed to such projects, as was a US$4 million loan from the IFAD to help initiate a small producers' support program on Nzwani.
The livestock sector is small--some 47,000 cattle, 120,000 goats, 13,000 sheep, and 4,000 asses in 1990. Comoros continues to import most domestically consumed meat.
. In return, Comoros would receive ECU300,000, and ECU50,000 would be invested in fisheries research. In addition, fishing vessel operators would pay ECU20 per ton of tuna netted. Although the deep waters outside the islands' reefs do not abound in fish, it has been estimated that up to 30,000 tons of fish could be taken per year from Comoran waters (which extend 320 kilometers offshore). The total catch in 1990 was 5,500 tons. Japan has also provided aid to the fishing industry. Fisheries development is overseen by a state agency, the Development Company for Small-Scale Fisheries of Comoros (Société de Développement de la Pêche Artisanale des Comores).
, which has about half the remaining forest. Roundwood
production in 2003 amounted to 9,000 cu m (300,000 cu ft ).
Comorans also produce handicrafts for export.
Other industries are small and geared to internal markets: sawmills, printing, carpentry, and the production of shoes, plastics, yogurt, handicrafts (such as the jewelry exchanged as part of the grand marriage), and small fishing boats.
Several factors provide major obstacles to the growth of industry: the islands' geographically isolated position, their distance from each other, a scarcity of raw materials and skilled labor, and the high cost of electricity (energy is produced by hydropower, imported petroleum, and wood products) and transportation. Value added in industry slowly declined throughout the 1980s.
. Only small vessels can approach the existing quays in Moroni
on Grande Comore
, despite recent improvements. Long-distance, ocean-going ships must lie offshore and be unloaded by smaller boats; during the cyclone
season, this procedure is dangerous, and ships are reluctant to call at the island. Most freight is sent first to Mombasa
or Réunion
and transshipped from there.
The banking system consists of the Central Bank of the Comoros
(Banque Centrale des Comores) established in 1981 that had three offices (Moroni (Grande-Comore), Mutsamudu (Anjouan) and Fomboni (Mohéli)); 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); the Development Bank of Comoros (Banque de Développement des Comores), established in 1982, which provided support for small and midsize development projects, the Federal Bank of Commerce (Banque Fédérale de Commerce) and the Exim Bank Comores Ltd. 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.
, Comoros' major trading partner, finances small projects only. The United States
receives a growing percentage of Comoros' exports but supplies only a negligible fraction of its imports (less than 1%).
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; for value of the Comoran franc--see Glossary) 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 an international airport (Prince Said Ibrahim International Airport
) at Hahaya on Grande Comore. It is a member of the franc zone with an exchange rate of 491.9677 Comorian franc
s (KMF) = 1 [Euro].
purchasing power parity - $410 million (1998 est.)
GDP - real growth rate:
0% (1998 est.)
GDP - per capita:
purchasing power parity - $725 (1998 est.)
GDP - composition by sector:
agriculture:
40%
industry:
5%
services:
55% (1997 est.)
Population below poverty line:
NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices):
4% (1998)
Labor force:
144,500 (1996 est.)
Labor force - by occupation:
agriculture 80%, government 3%
Unemployment rate:
20% (1996 est.)
Budget:
revenues:
$48 million
expenditures:
$53 million, including capital expenditures of $NA (1997)
Industries:
tourism, perfume distillation, textiles, furniture, jewelry, construction materials, soft drinks
Industrial production growth rate:
NA%
Electricity - production:
15 GWh (1998)
Electricity - production by source:
fossil fuel:
86.67%
hydro:
13.33%
nuclear:
0%
other:
0% (1998)
Electricity - consumption:
14 GWh (1998)
Electricity - exports:
0 kWh (1998)
Electricity - imports:
0 kWh (1998)
Agriculture - products:
vanilla
, clove
s, perfume essences, copra
, coconut
s, banana
s, cassava
(tapioca
)
Exports:
$9.3 million (f.o.b., 1998 est.)
Exports - commodities:
vanilla
, ylang-ylang
, clove
s, perfume oil, copra
Exports - partners:
France
43%, United States
43%, Germany
7% (1997)
Imports:
$49.5 million (f.o.b., 1998 est.)
Imports - commodities:
rice
and other foodstuffs, consumer goods; petroleum products, cement
, transport equipment
Imports - partners:
France
59%, South Africa
15%, Kenya
6% (1997)
Debt - external:
$197 million (1997 est.)
Economic aid - recipient:
$28.1 million (1997)
Currency:
1 Comorian franc
(CF)
Exchange rates:
Comorian francs (CF) per US$1 - 485.44 (January 2000), 461.77 (1999), 442.46 (1998), 437.75 (1997), 383.66 (1996), 374.36 (1995)
note:
prior to January 1999, the official rate was pegged to the French franc at 75 CFs per French franc; since January 1, 1999, the CF is pegged to the euro at a rate of 491.9677 Comorian francs per euro
Fiscal year:
calendar year
Comoros
The Comoros , officially the Union of the Comoros is an archipelago island nation in the Indian Ocean, located off the eastern coast of Africa, on the northern end of the Mozambique Channel, between northeastern Mozambique and northwestern Madagascar...
is made up of three islands that have inadequate transportation links, a young and rapidly increasing population, and few natural resources. The low educational level of the labor force contributes to a subsistence level of economic activity, high unemployment, and a heavy dependence on foreign grants and technical assistance. Comoros, with an estimated gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
(GDP) per capita income
Per capita income
Per capita income or income per person is a measure of mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate and dividing it by the total population...
of about $700, is among the world's poorest and least developed nations. Although the quality of the land differs from island to island, most of the widespread lava
Lava
Lava refers both to molten rock expelled by a volcano during an eruption and the resulting rock after solidification and cooling. This molten rock is formed in the interior of some planets, including Earth, and some of their satellites. When first erupted from a volcanic vent, lava is a liquid at...
-encrusted soil formations are unsuited to agriculture. As a result, most of the inhabitants make their living from subsistence agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
and fishing
Fishing
Fishing is the activity of trying to catch wild fish. Fish are normally caught in the wild. Techniques for catching fish include hand gathering, spearing, netting, angling and trapping....
. Average wages in 2007 hover around $3-4 per day.
Agriculture, including fishing, hunting, and forestry, is the leading sector of the economy. It contributes 40% to GDP, employs 80% of the labor force, and provides most of the exports. The country is not self-sufficient in food production; rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
, the main staple, accounts for the bulk of imports.
The government is struggling to upgrade education and technical training, to privatize commercial and industrial enterprises, to improve health services, to diversify exports, to promote tourism, and to reduce the high population growth rate. Continued foreign support is essential if the goal of 4% annual GDP growth is to be met. At 24 percent of GDP, remittances constitute an important source of inflows for the Comorian economy.
Current GDP per capita of Comoros grew 55% in the Eighties. But this proved unsustainable and it consequently shrank by 42% in the Nineties.
Economic History
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--see Glossary) was estimated at US$400 in 1994, following the January devaluation of the Comorian franc
Comorian franc
The franc is the official currency of Comoros. It is nominally subdivided into 100 centimes, although no centime denominations have ever been issued.-History:...
. 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-- see Glossary) 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; for value, see Glossary) 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--see Glossary) 1991, was administered by CARE, the nongovernmental organization, and focused primarily on reforestation, soil conservation, and sustainable agriculture.
Comoros has officially participated in the African Franc Zone (Communauté Financière Africaine-- CFA; see Glossary) 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.
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. Mean wages were $0.80 per manhour in 2009.
Agriculture, Fishing and Forestry
AgricultureAgriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
, involving more than 80% of the population and 40% of the gross domestic product, provides virtually all foreign exchange earnings. Services including tourism, construction, and commercial activities constitute the remainder of the GDP. Plantations engage a large proportion of the population in producing the islands' major cash crops for export: vanilla
Vanilla
Vanilla is a flavoring derived from orchids of the genus Vanilla, primarily from the Mexican species, Flat-leaved Vanilla . The word vanilla derives from the Spanish word "", little pod...
, cloves, perfume
Perfume
Perfume is a mixture of fragrant essential oils and/or aroma compounds, fixatives, and solvents used to give the human body, animals, objects, and living spaces "a pleasant scent"...
essences, and copra
Copra
Copra is the dried meat, or kernel, of the coconut. Coconut oil extracted from it has made copra an important agricultural commodity for many coconut-producing countries. It also yields coconut cake which is mainly used as feed for livestock.-Production:...
. Comoros is the world's leading producer of essence of ylang-ylang
Ylang-ylang
Cananga odorata, commonly called Ylang-ylang , cananga tree, ilang-ilang, kenanga , fragrant cananga, Macassar-oil plant or perfume tree),is a tree valued for its perfume...
, used in manufacturing perfume. It also is the world's second-largest producer of vanilla, after Madagascar
Madagascar
The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa...
. Principal food crops are coconut
Coconut
The coconut palm, Cocos nucifera, is a member of the family Arecaceae . It is the only accepted species in the genus Cocos. The term coconut can refer to the entire coconut palm, the seed, or the fruit, which is not a botanical nut. The spelling cocoanut is an old-fashioned form of the word...
s, banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, and cassava
Cassava
Cassava , also called yuca or manioc, a woody shrub of the Euphorbiaceae native to South America, is extensively cultivated as an annual crop in tropical and subtropical regions for its edible starchy tuberous root, a major source of carbohydrates...
. Foodstuffs constitute 32% of total imports.
Agriculture and livestock
Agriculture supported about 80 percent of the population and supplied about 95 percent of exports in the early 1990s. Two agricultural zones are generally defined: the coastal area, which ranges in elevation from sea level to 400 meters and which supports cash crops such as vanilla, ylang-ylang, and cloves; and the highlands, which support cultivation of crops for domestic consumption, such as cassava, bananas, rain rice, and sweet potatoes. As the population increased, food grown for domestic use met fewer and fewer of Comorans' needs. Data collected by the World Bank showed that food production per capita fell about 12 percent from 1980 to 1987. The republic imported virtually all its meat and vegetables; rice imports alone often accounted for up to 30 percent of the value of all imports.Comoros is the world's principal producer of ylang-ylang
Ylang-ylang
Cananga odorata, commonly called Ylang-ylang , cananga tree, ilang-ilang, kenanga , fragrant cananga, Macassar-oil plant or perfume tree),is a tree valued for its perfume...
essence, an essence derived from the flowers of a tree originally brought from Indonesia that is used in manufacturing perfumes and soaps. Ylang-ylang essence is a major component of Chanel No. 5, the popular scent for women. The republic is the world's second largest producer of vanilla, after Madagascar. Cloves are also an important cash crop. A total of 237 tons of vanilla was exported in 1991, at a price of about CF19 per kilogram. A total of 2,750 tons of cloves was exported in 1991, at a price of CF397 per kilogram. That year forty-three tons of ylang-ylang essence were exported at a price of about CF23,000 per kilogram. The production of all three commodities fluctuates wildly, mainly in response to changes in global demand and natural disasters such as cyclones. Profits--and therefore, government receipts-- likewise skyrocket and plummet, wreaking havoc with government efforts to predict revenues and plan expenditures. Stabex (Stabilization of Export Earnings--see Glossary), a system of the EC, provides aid to Comoros and other developing countries to mitigate the effects of fluctuations in the prices of export commodities.
Long-term prospects for the growth and stabilization of the markets for vanilla and ylang-ylang did not appear strong in the early 1990s. Vanilla faced increased competition from synthetic flavorings, and the preferences of perfume users were moving away from the sweet fragrance provided by ylang-ylang essence. Copra, the dried coconut meat that yields coconut oil, once an important Comoran export, had ceased to be a significant factor in the economy by the late 1980s, when the world's tastes shifted from high-fat coconut oil toward "leaner" substances such as palm oil. Although clove production and revenues also experienced swings, in the early 1990s cloves did not appear to face the same sorts of challenges confronting vanilla and ylang-ylang. Most Comoran vanilla is grown on Njazidja; Nzwani is the source of most ylangylang .
Numerous international programs have attempted to reduce the country's dependence on food imports, particularly of rice, a major drain on export earnings. Organizations initiating these rural development programs have included the EDF, the IFAD, the World Food Program, the Arab Bank for Economic Development in Africa, the UN Food and Agriculture Organization, and the governments of France and the United States. Despite these international efforts, which numbered as many as seventeen in 1984, food production per capita actually declined in Comoros during the 1980s. The major clove and vanilla growers, whose plantations occupy the islands' fertile coastal lands, generally resisted these restructuring efforts, as did rice-importing firms, including the country's largest, Établissements Abdallah et Fils.
Crowded onto the mountain slopes by the cash crop plantations, food-crop farmers have caused deforestation and the erosion of the highlands' thin, fragile soil. In response, aid providers have dedicated an increasing amount of agricultural assistance to reforestation, soil restoration, and environmentally sensitive means of cultivation. For example, all United States agricultural aid in 1991 (US$700,000) was directed to such projects, as was a US$4 million loan from the IFAD to help initiate a small producers' support program on Nzwani.
The livestock sector is small--some 47,000 cattle, 120,000 goats, 13,000 sheep, and 4,000 asses in 1990. Comoros continues to import most domestically consumed meat.
Fishing
Since the latter part of the 1980s, Comoros has made headway in developing fisheries as a source of export earnings. In 1988 the government concluded a three-year agreement with the EC by which forty French and Spanish vessels would be permitted to fish in Comoran waters, primarily for tunaTuna
Tuna is a salt water fish from the family Scombridae, mostly in the genus Thunnus. Tuna are fast swimmers, and some species are capable of speeds of . Unlike most fish, which have white flesh, the muscle tissue of tuna ranges from pink to dark red. The red coloration derives from myoglobin, an...
. In return, Comoros would receive ECU300,000, and ECU50,000 would be invested in fisheries research. In addition, fishing vessel operators would pay ECU20 per ton of tuna netted. Although the deep waters outside the islands' reefs do not abound in fish, it has been estimated that up to 30,000 tons of fish could be taken per year from Comoran waters (which extend 320 kilometers offshore). The total catch in 1990 was 5,500 tons. Japan has also provided aid to the fishing industry. Fisheries development is overseen by a state agency, the Development Company for Small-Scale Fisheries of Comoros (Société de Développement de la Pêche Artisanale des Comores).
Forestry
Forested areas amounted to about 8,000 hectares (20,000 acres) in 2000. Numerous fruit trees and tropical hardwoods are found. Some timber is produced, notably on the island of Grande ComoreGrande Comore
Grande Comore is an island in the Indian Ocean off the coast of Africa. It is the largest island in the Comoros nation. Most of its population is of the Comorian ethnic group. Its population as of 2006 is about 316,600. The island's capital is Moroni, which is also the national capital...
, which has about half the remaining forest. Roundwood
Roundwood
Roundwood, historically known as Tochar , is a village in County Wicklow, Ireland. It was listed as having a population of 589 in the census of 2006....
production in 2003 amounted to 9,000 cu m (300,000 cu ft ).
Industry
Industrial activities are responsible for only a tiny portion of Comoran economic activity--about 5 percent of GDP in 1994. Principal industries are those that involve processing cash crops for export: preparing vanilla and distilling ylang-ylang into perfume essence. These activities were once controlled almost entirely by French companies, but as they closed unprofitable plantations, individual farmers set up many small, inefficient distilleries.Comorans also produce handicrafts for export.
Other industries are small and geared to internal markets: sawmills, printing, carpentry, and the production of shoes, plastics, yogurt, handicrafts (such as the jewelry exchanged as part of the grand marriage), and small fishing boats.
Several factors provide major obstacles to the growth of industry: the islands' geographically isolated position, their distance from each other, a scarcity of raw materials and skilled labor, and the high cost of electricity (energy is produced by hydropower, imported petroleum, and wood products) and transportation. Value added in industry slowly declined throughout the 1980s.
Tourism
Perhaps the primary outcome of South African penetration of the Comoran economy during the Abdallah regime was the development of tourism. Although South African investors built or renovated several hotels during the 1980s (with assistance from the South African and Comoran governments), only one resort, the 182-room Galawa Beach on Njazidja, was operating by late 1992. About 100 other hotel rooms were available on the islands. Political instability, a declining South African interest in the islands as the apartheid regime was disassembled and other tropical tourism venues became more welcoming, and the need to import most construction materials and consumable supplies inhibited the growth of tourism, despite the islands' physical beauty. Nonetheless, in large part thanks to Galawa Beach, which had been closed during 1990, tourism increased from 7,627 visitors in 1990 to 16,942 in 1991. Most of these tourists were Europeans, primarily French (see Historical Setting , this ch.).Infrastructure
The country lacks the infrastructure necessary for development. Some villages are not linked to the main road system or at best are connected by tracks usable only by four-wheel-drive vehicles. The islands' ports are rudimentary, although a deepwater facility was recently completed on AnjouanAnjouan
Anjouan is an autonomous island, part of the Union of Comoros. The island is located in the Indian Ocean. Its capital is Mutsamudu and its population as of 2006 is about 277,500. The total area of the island is 424 sq. kilometers Anjouan (also known as Ndzuwani or Nzwani) is an autonomous island,...
. Only small vessels can approach the existing quays in Moroni
Moroni, Comoros
-References:...
on Grande Comore
Grande Comore
Grande Comore is an island in the Indian Ocean off the coast of Africa. It is the largest island in the Comoros nation. Most of its population is of the Comorian ethnic group. Its population as of 2006 is about 316,600. The island's capital is Moroni, which is also the national capital...
, despite recent improvements. Long-distance, ocean-going ships must lie offshore and be unloaded by smaller boats; during the cyclone
Cyclone
In meteorology, a cyclone is an area of closed, circular fluid motion rotating in the same direction as the Earth. This is usually characterized by inward spiraling winds that rotate anticlockwise in the Northern Hemisphere and clockwise in the Southern Hemisphere of the Earth. Most large-scale...
season, this procedure is dangerous, and ships are reluctant to call at the island. Most freight is sent first to Mombasa
Mombasa
Mombasa is the second-largest city in Kenya. Lying next to the Indian Ocean, it has a major port and an international airport. The city also serves as the centre of the coastal tourism industry....
or Réunion
Réunion
Réunion is a French island with a population of about 800,000 located in the Indian Ocean, east of Madagascar, about south west of Mauritius, the nearest island.Administratively, Réunion is one of the overseas departments of France...
and transshipped from there.
The banking system consists of the Central Bank of the Comoros
Central Bank of the Comoros
The Central Bank of the Comoros is the central bank of the Comoros, a group of islands in the Indian Ocean.-Operations:The statutes of the BCC state that its Board of Directors shall have eight members who are chosen from the Comorian Government, the French Central Bank and the French government...
(Banque Centrale des Comores) established in 1981 that had three offices (Moroni (Grande-Comore), Mutsamudu (Anjouan) and Fomboni (Mohéli)); 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); the Development Bank of Comoros (Banque de Développement des Comores), established in 1982, which provided support for small and midsize development projects, the Federal Bank of Commerce (Banque Fédérale de Commerce) and the Exim Bank Comores Ltd. 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.
External trade
FranceFrance
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Comoros' major trading partner, finances small projects only. The United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
receives a growing percentage of Comoros' exports but supplies only a negligible fraction of its imports (less than 1%).
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; for value of the Comoran franc--see Glossary) 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 an international airport (Prince Said Ibrahim International Airport
Prince Said Ibrahim International Airport
Prince Said Ibrahim International Airport is an international airport located in Moroni, Comoros.-Airlines and destinations:- Accidents and Incidents :...
) at Hahaya on Grande Comore. It is a member of the franc zone with an exchange rate of 491.9677 Comorian franc
Comorian franc
The franc is the official currency of Comoros. It is nominally subdivided into 100 centimes, although no centime denominations have ever been issued.-History:...
s (KMF) = 1 [Euro].
Statistics
GDP:purchasing power parity - $410 million (1998 est.)
GDP - real growth rate:
0% (1998 est.)
GDP - per capita:
purchasing power parity - $725 (1998 est.)
GDP - composition by sector:
agriculture:
40%
industry:
5%
services:
55% (1997 est.)
Population below poverty line:
NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices):
4% (1998)
Labor force:
144,500 (1996 est.)
Labor force - by occupation:
agriculture 80%, government 3%
Unemployment rate:
20% (1996 est.)
Budget:
revenues:
$48 million
expenditures:
$53 million, including capital expenditures of $NA (1997)
Industries:
tourism, perfume distillation, textiles, furniture, jewelry, construction materials, soft drinks
Industrial production growth rate:
NA%
Electricity - production:
15 GWh (1998)
Electricity - production by source:
fossil fuel:
86.67%
hydro:
13.33%
nuclear:
0%
other:
0% (1998)
Electricity - consumption:
14 GWh (1998)
Electricity - exports:
0 kWh (1998)
Electricity - imports:
0 kWh (1998)
Agriculture - products:
vanilla
Vanilla
Vanilla is a flavoring derived from orchids of the genus Vanilla, primarily from the Mexican species, Flat-leaved Vanilla . The word vanilla derives from the Spanish word "", little pod...
, clove
Clove
Cloves are the aromatic dried flower buds of a tree in the family Myrtaceae. Cloves are native to the Maluku islands in Indonesia and used as a spice in cuisines all over the world...
s, perfume essences, copra
Copra
Copra is the dried meat, or kernel, of the coconut. Coconut oil extracted from it has made copra an important agricultural commodity for many coconut-producing countries. It also yields coconut cake which is mainly used as feed for livestock.-Production:...
, coconut
Coconut
The coconut palm, Cocos nucifera, is a member of the family Arecaceae . It is the only accepted species in the genus Cocos. The term coconut can refer to the entire coconut palm, the seed, or the fruit, which is not a botanical nut. The spelling cocoanut is an old-fashioned form of the word...
s, banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, cassava
Cassava
Cassava , also called yuca or manioc, a woody shrub of the Euphorbiaceae native to South America, is extensively cultivated as an annual crop in tropical and subtropical regions for its edible starchy tuberous root, a major source of carbohydrates...
(tapioca
Tapioca
Tapioca is a starch extracted Manihot esculenta. This species, native to the Amazon, Brazil, Colombia, Venezuela, Cuba, Puerto Rico, Haiti, the Dominican Republic, Honduras, and most of the West Indies, is now cultivated worldwide and has many names, including cassava, manioc, aipim,...
)
Exports:
$9.3 million (f.o.b., 1998 est.)
Exports - commodities:
vanilla
Vanilla
Vanilla is a flavoring derived from orchids of the genus Vanilla, primarily from the Mexican species, Flat-leaved Vanilla . The word vanilla derives from the Spanish word "", little pod...
, ylang-ylang
Ylang-ylang
Cananga odorata, commonly called Ylang-ylang , cananga tree, ilang-ilang, kenanga , fragrant cananga, Macassar-oil plant or perfume tree),is a tree valued for its perfume...
, clove
Clove
Cloves are the aromatic dried flower buds of a tree in the family Myrtaceae. Cloves are native to the Maluku islands in Indonesia and used as a spice in cuisines all over the world...
s, perfume oil, copra
Copra
Copra is the dried meat, or kernel, of the coconut. Coconut oil extracted from it has made copra an important agricultural commodity for many coconut-producing countries. It also yields coconut cake which is mainly used as feed for livestock.-Production:...
Exports - partners:
France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
43%, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
43%, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
7% (1997)
Imports:
$49.5 million (f.o.b., 1998 est.)
Imports - commodities:
rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
and other foodstuffs, consumer goods; petroleum products, cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...
, transport equipment
Imports - partners:
France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
59%, South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
15%, Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...
6% (1997)
Debt - external:
$197 million (1997 est.)
Economic aid - recipient:
$28.1 million (1997)
Currency:
1 Comorian franc
Comorian franc
The franc is the official currency of Comoros. It is nominally subdivided into 100 centimes, although no centime denominations have ever been issued.-History:...
(CF)
Exchange rates:
Comorian francs (CF) per US$1 - 485.44 (January 2000), 461.77 (1999), 442.46 (1998), 437.75 (1997), 383.66 (1996), 374.36 (1995)
note:
prior to January 1999, the official rate was pegged to the French franc at 75 CFs per French franc; since January 1, 1999, the CF is pegged to the euro at a rate of 491.9677 Comorian francs per euro
Fiscal year:
calendar year