2021 Index of Economic Freedom

Comoros

OVERALL SCORE55.7
WORLD RANK132
Rule of Law

Property Rights34.0

Judicial Effectiveness28.2

Government Integrity23.6

Government Size

Tax Burden63.5

Government Spending91.6

Fiscal Health97.3

Regulatory Efficiency

Business Freedom48.5

Labor Freedom60.4

Monetary Freedom79.7

Open Markets

Trade Freedom66.2

Investment Freedom45.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 0.9 million
  • GDP (PPP):
    • $2.5 billion
    • 1.9% growth
    • 2.9% 5-year compound annual growth
    • $3,209 per capita
  • Unemployment:
    • 4.3%
  • Inflation (CPI):
    • 3.3%
  • FDI Inflow:
    • $7.9 million

Comoros’s economic freedom score is 55.7, making its economy the 132nd freest in the 2021 Index. Its overall score has increased by 2.0 points, primarily because of an improvement in the government spending score. Comoros is ranked 25th among 47 countries in the Sub-Saharan Africa region, and its overall score is equal to the regional average but below the world average.

Economic freedom in Comoros has recovered ground this year and is now within striking distance of its all-time-high score. To reach that goal, the government will have to address the severe institutional deficiencies reflected in its very low scores for property rights, judicial effectiveness, and government integrity.

IMPACT OF COVID-19: As of December 1, 2020, seven deaths had been attributed to the pandemic in Comoros, and the economy was forecast to contract by 1.8 percent for the year.

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Background

The three-island Union of the Comoros has experienced more than 20 attempted coups since gaining independence in 1975; the most recent such attempt was in 2013. The two smaller islands seceded in 1997 but returned in 2001. In 2018, former coup leader turned President Azali Assoumani cracked down on the opposition and won a referendum that centralized executive power. He was reelected in 2019 in an election that was discredited by international observers. As a former colony, Comoros prioritizes its aid and trade relations with France, and the French Treasury guarantees the Comorian franc. Comoros is a leading producer of ylang-ylang perfume essence, cloves, and vanilla. In 2018, it became a full member of the Southern African Development Community.

Rule of LawView Methodology

Property Rights 34.0 Create a Graph using this measurement

Judicial Effectiveness 28.2 Create a Graph using this measurement

Government Integrity 23.6 Create a Graph using this measurement

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

Government SizeView Methodology

The top individual 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 15.7 percent of total domestic income. Government spending has amounted to 16.7 percent of total output (GDP) over the past three years, and budget deficits have averaged 1.0 percent of GDP. Public debt is equivalent to 23.8 percent of GDP.

Regulatory EfficiencyView Methodology

Costs associated with starting a business and getting an electricity connection have declined but are still very high compared to most countries. The majority of the labor force is employed in agriculture. The government has subsidized imported food since the weather-related crop losses and damage to infrastructure that occurred in 2019. Subsidies to the state-owned power and water companies increased in 2020, and price controls were imposed for certain foods and medicines.

Open MarketsView Methodology

Comoros has one preferential trade agreement in force. The trade-weighted average tariff rate is 6.9 percent, and nontariff barriers further impede trade. Comoros is not a member of the World Trade Organization. Foreign and domestic investors are generally treated equally under the law. The small financial sector still lacks adequate regulation or supervision, 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
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
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