Comoros is an archipelago in the Indian Ocean, off the coast of Africa. It is located between Mozambique and the island nation of Madagascar. According to the World Bank, the most recent survey of households in Comoros, conducted in 2014, showed about 18 percent of the population living below the poverty line.
Improving access to finance is one way to boost economic activity and lift people out of poverty. Looking at recent changes in credit access in Comoros offers clues as to where the country’s economy is headed.
Business Reforms in Comoros
Over the past few years, the government of Comoros has instituted several reforms that make doing business easier. These reforms have made it easier to start a business by reducing the minimum capital requirement. In turn, this has made resolving insolvency easier for small companies and made trading across borders easier with an automated customs data management system.
The International Finance Corporation reports that these reforms have reduced the number of procedures and days needed to start a business. Comoros has also improved its investment potential by offering political risk insurance to foreign investors, which may mitigate fears over Comoros’ recent decades of instability.
Credit Access in Comoros: Looking Ahead
At the 21st session of the Intergovernmental Committee of Experts, in November 2017, participants adopted the final report of best practices and research results for catalyzing growth in East Africa. It clears a path for more cooperation between the United Nations Economic Commission for Africa and member states, like Comoros.
Topics emphasized included investment in infrastructure and renewable energy, as well as the need to improve credit access in Comoros, which will support the private sector. The goal is to make Comoros an emerging country by the year 2030, if not sooner.
The Takeaway on Financing in Comoros
Comoros is finally beginning to establish political calm after decades of political strife and coups, initially ushered in by its vote for independence from France in 1974. Time will tell whether peace lasts, but, if it does, business activity and good credit in Comoros will likely continue to grow.
With a better business environment, Comoros will have the funds to address poverty factors like hunger and malnutrition, and, hopefully, it will continue to make gains in the U.N.’s Human Development Index.
– Chuck Hasenauer
Photo: Flickr