2017 Index of Economic Freedom

Comoros

overall score55.8
world rank121
Rule of Law

Property Rights37.3

Government Integrity30.0

Judicial Effectiveness22.6

Government Size

Government Spending81.2

Tax Burden64.6

Fiscal Health98.6

Regulatory Efficiency

Business Freedom58.5

Labor Freedom50.6

Monetary Freedom81.5

Open Markets

Trade Freedom70.2

Investment Freedom45.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 0.8 million
  • GDP (PPP):
    • $1.2 billion
    • 1.0% growth
    • 2.3% 5-year compound annual growth
    • $1,519 per capita
  • Unemployment:
    • 19.6%
  • Inflation (CPI):
    • 2.0%
  • FDI Inflow:
    • $5.1 million
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Chronic overdependence on foreign aid and a burdensome business environment continue to undermine prospects for sustained economic development in Comoros. With structural reforms to diversify the economic base achieving only marginal progress, policies to enhance regulatory efficiency and maintain open markets for the development of a more dynamic private sector have not advanced.

Rule of law remains fragile because of corruption and an inefficient judicial system that is vulnerable to political interference. Lingering political uncertainty and poor access to credit hamper fuller integration into the world economy, and policies to promote or sustain reforms have been neglected or even reversed.

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Background

The three-island Union of the Comoros has experienced more than 20 coup attempts since independence in 1975, most recently in 2013. A 2001 constitution granted each island increased autonomy and stipulated that the presidency would rotate among the three islands. A 2009 referendum extended presidents’ terms from four to five years and increased the central government’s authority at the expense of local governments. President Ikililou Dhoinine stepped down peacefully in 2016, but the initial round of voting for his successor was marred by irregularities and isolated violence. Opposition politician and former President Azali Assoumani was eventually elected in a runoff vote. Comoros is a leading producer of ylang-ylang, cloves, and vanilla.

Rule of LawView Methodology

Property Rights 37.3 Create a Graph using this measurement

Government Integrity 30.0 Create a Graph using this measurement

Judicial Effectiveness 22.6 Create a Graph using this measurement

Property rights are not well protected, and contracts are weakly enforced. The judicial system, based on both Sharia (Islamic) law and the French legal code, is weak and subject to political influence. Corruption is reported at all levels of government and is exacerbated by internal political disputes and competition for resources among the administrations of the three islands.

Government SizeView Methodology

The top personal income tax rate is 30 percent, and the top corporate tax rate is 50 percent. Other taxes include a value-added tax and an insurance tax. The overall tax burden equals 11.8 percent of total domestic income. Government spending has amounted to 25 percent of total output (GDP) over the past three years, and budget surpluses have averaged 7.3 percent of GDP. Public debt is equivalent to 26.7 percent of GDP.

Regulatory EfficiencyView Methodology

The regulatory environment still imposes significant burdens on entrepreneurs. Minimum capital requirements to launch a company exceed the average level of annual income. With development of a modern labor market lagging, the informal sector accounts for most employment. The government subsidizes state-owned but poorly managed water, electricity, and oil utilities and controls other prices.

Open MarketsView Methodology

Trade is important to the Comoros economy; the value of exports and imports taken together equals 80 percent of GDP. The average applied tariff rate is 7.4 percent. Foreign and domestic investors are generally treated equally under the law. The small financial sector still lacks adequate regulation or supervision. Banking is not well established, and many people are without bank accounts and rely on informal lending.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius74.70.0
2Botswana70.1-1.0
3Rwanda67.64.5
4Côte d'Ivoire 633.0
5Namibia62.50.6
6South Africa62.30.4
7Seychelles61.8-0.4
8Swaziland61.11.4
9Uganda60.91.6
10Burkina Faso59.60.5
11Benin59.2-0.1
12Mali58.62.1
13Gabon58.6-0.4
14Tanzania58.60.1
15Madagascar57.4-3.7
16Nigeria57.1-0.4
17Cabo Verde56.9-9.6
18Democratic Republic of Congo56.410.0
19Ghana56.2-6.8
20Guinea-Bissau56.14.3
21Senegal55.9-2.2
22Comoros55.83.4
23Zambia55.8-3.0
24São Tomé and Príncipe 55.4-1.3
25Mauritania54.4-0.4
26Lesotho53.93.3
27Kenya53.5-4.0
28The Gambia53.4-3.7
29Togo53.2-0.4
30Burundi53.2-0.7
31Ethiopia52.71.2
32Sierra Leone52.60.3
33Malawi52.20.4
34Cameroon51.8-2.4
35Central African Republic51.86.6
36Niger50.8-3.5
37Mozambique 49.9-3.3
38Liberia49.1-3.1
39Chad492.7
40Sudan48.8N/A
41Angola48.5-0.4
42Guinea47.6-5.7
43Djibouti46.7-9.3
44Equatorial Guinea451.3
45Zimbabwe445.8
46Eritrea42.2-0.5
47Republic of Congo 40-2.8
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