2019 Index of Economic Freedom

Comoros

overall score55.4
world rank124
Rule of Law

Property Rights36.5

Government Integrity24.4

Judicial Effectiveness29.6

Government Size

Government Spending73.4

Tax Burden63.9

Fiscal Health91.7

Regulatory Efficiency

Business Freedom57.2

Labor Freedom60.3

Monetary Freedom82.8

Open Markets

Trade Freedom70.0

Investment Freedom45.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 0.8 million
  • GDP (PPP):
    • $1.3 billion
    • 2.5% growth
    • 2.2% 5-year compound annual growth
    • $1,588 per capita
  • Unemployment:
    • 4.3%
  • Inflation (CPI):
    • 1.0%
  • FDI Inflow:
    • $8.6 million

Comoros’s economic freedom score is 55.4, making its economy the 124th freest in the 2019 Index. Its overall score has decreased by 0.8 point, with declines in trade freedom, fiscal health, and government spending outpacing improvements in scores for tax burden, labor freedom, and monetary freedom. Comoros is ranked 20th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

A burdensome business environment and lack of tourism-related infrastructure undermine economic development. Structural reforms to diversify the economic base of one of the world’s poorest countries have produced minimal results, and policies to enhance regulatory efficiency and open markets for the private sector have not advanced. The rule of law remains fragile because of corruption and an inefficient judicial system that is vulnerable to political interference. These deficiencies make Comoros a less attractive tourist destination than some of its neighbors.

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Background

The Union of the Comoros has experienced more than 20 attempted coups since independence in 1975, most recently in 2013. Under a constitution adopted in 2001, the presidency rotates among the country’s three islands. In 2016, former coup leader Azali Assoumani won the presidency in a runoff election. In 2018, Assoumani suspended the constitutional court, cracked down on the opposition, and won a referendum to centralize executive power and perhaps remain in office through 2021. As a former colony, Comoros prioritizes its aid and trade relations with France; the French Treasury guarantees the Comorian franc. Comoros is a leading producer of ylang-ylang, cloves, and vanilla. In 2017, it applied for membership in the Southern African Development Community.

Rule of LawView Methodology

Property Rights 36.5 Create a Graph using this measurement

Government Integrity 24.4 Create a Graph using this measurement

Judicial Effectiveness 29.6 Create a Graph using this measurement

Property rights are not well protected, and enforcement of contracts is weak. The judicial system, based on both the French legal code and Sharia (Islamic law), is weak and subject to political influence. Anticorruption laws are in place but not enforced. Corruption is reported at all levels of government and is driven in part by internal political disputes and competition over resources by the three island administrations.

Government SizeView Methodology

The top personal income tax rate is 30 percent, and the top corporate tax rate is 50 percent. Other taxes include value-added and insurance taxes. The overall tax burden equals 14.5 percent of total domestic income. Over the past three years, government spending has amounted to 29.8 percent of the country’s output (GDP), and budget deficits have averaged 2.1 percent of GDP. Public debt is equivalent to 28.4 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 jobs. The government regulates prices and subsidizes state-owned but poorly managed water, electricity, and oil utilities.

Open MarketsView Methodology

The combined value of exports and imports is equal to 61.9 percent of GDP. The average applied tariff rate is 5.0 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 in Comoros, 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
1Mauritius73-2.1
2Rwanda71.12.0
3Botswana69.5-0.4
4Cabo Verde63.13.1
5Côte d'Ivoire 62.40.4
6Seychelles61.4-0.2
7Tanzania60.20.3
8Uganda59.7-2.3
9Burkina Faso59.4-0.6
10Namibia58.70.2
11South Africa58.3-4.7
12Mali58.10.5
13Ghana57.51.5
14Nigeria57.3-1.2
15Madagascar56.6-0.2
16Senegal56.30.6
17Gabon56.3-1.7
18Mauritania55.71.7
19Guinea55.73.5
20Comoros55.4-0.8
21Benin55.3-1.4
22Kenya55.10.4
23Eswatini54.7-1.2
24São Tomé and Príncipe 540.4
25Guinea-Bissau54-2.9
26Ethiopia53.60.8
27Zambia53.6-0.7
28Lesotho53.1-0.8
29Cameroon52.40.5
30The Gambia52.40.1
31Niger51.62.1
32Malawi51.4-0.6
33Angola50.62.0
34Democratic Republic of Congo50.3-1.8
35Togo50.32.5
36Chad49.90.6
37Liberia49.7-1.2
38Central African Republic49.1-0.1
39Burundi48.9-2.0
40Mozambique 48.62.3
41Sudan47.7-1.7
42Sierra Leone47.5-4.3
43Djibouti47.12.0
44Equatorial Guinea41-1.0
45Zimbabwe40.4-3.6
46Republic of Congo 39.70.8
47Eritrea38.9-2.8
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