2018 Index of Economic Freedom

Comoros

overall score56.2
world rank121
Rule of Law

Property Rights36.7

Government Integrity27.5

Judicial Effectiveness28.2

Government Size

Government Spending77.8

Tax Burden59.7

Fiscal Health96.6

Regulatory Efficiency

Business Freedom57.5

Labor Freedom58.7

Monetary Freedom81.2

Open Markets

Trade Freedom74.9

Investment Freedom45.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 0.8 million
  • GDP (PPP):
    • $1.3 billion
    • 1.0% growth
    • 2.3% 5-year compound annual growth
    • $1,529 per capita
  • Unemployment:
    • 20.0%
  • Inflation (CPI):
    • 2.0%
  • FDI Inflow:
    • $8.0 million
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Comoros’s economic freedom score is 56.2, making its economy the 121st freest in the 2018 Index. Its overall score has increased by 0.4 point, with improvements in labor freedom, judicial effectiveness, and trade freedom offsetting declines in the tax burden and government spending indicators. Comoros is ranked 18th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

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 maintain open markets to develop a more dynamic private sector have not advanced. Chronic overdependence on foreign aid and a burdensome business environment continue to undermine prospects for sustained economic development. The rule of law remains fragile because of corruption and an inefficient judicial system that is vulnerable to political interference.

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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. President Ikililou Dhoinine stepped down in 2016, and irregularities and isolated violence marred the initial round of voting for his successor. Opposition politician and former President Azali Assoumani was eventually elected in a runoff vote. Comoros, a former French colony, prioritizes its relations with France; France is its key bilateral donor and trading partner, and the French Treasury guarantees the Comorian franc. Comoros is a leading producer of ylang-ylang, cloves, and vanilla and in February 2017 applied for membership in the Southern African Development Community.

Rule of LawView Methodology

Property Rights 36.7 Create a Graph using this measurement

Government Integrity 27.5 Create a Graph using this measurement

Judicial Effectiveness 28.2 Create a Graph using this measurement

Contracts are weakly enforced, and property rights are not well protected. The judiciary is constitutionally independent, but the rule of law is weakened by judicial inconsistency, unpredictability, corruption, and the vulnerability of the courts to political influence. Corruption is reported at all levels of government and is driven in part by internal political disputes and the three island administrations’ competition for resources.

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 25.1 percent of total domestic income. Over the past three years, government spending has amounted to 27.2 percent of total output (GDP), and budget deficits have averaged 1.1 percent of GDP. Public debt is equivalent to 26.3 percent of GDP.

Regulatory EfficiencyView Methodology

The business environment is unfavorable, with burdensome regulations. Electricity shortages and other infrastructure inadequacies make entrepreneurial activity challenging. The lack of a modern labor force contributes to a subsistence level of economic activity. The government subsidizes state-owned but poorly managed utilities (water, electricity, and oil) and controls other prices.

Open MarketsView Methodology

Trade is significant for Comoros’s economy; the combined value of exports and imports equals 65 percent of GDP. The average applied tariff rate is 5.0 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. The financial system remains underdeveloped. Nonperforming loans have declined steadily in recent years. Privatization of the Development Bank of the Comoros has progressed.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius75.10.4
2Botswana69.9-0.2
3Rwanda69.11.5
4South Africa630.7
5Uganda621.1
6Côte d'Ivoire 62-1.0
7Seychelles61.6-0.2
8Burkina Faso600.4
9Cabo Verde603.1
10Tanzania59.91.3
11Namibia58.5-4.0
12Nigeria58.51.4
13Gabon58-0.6
14Mali57.6-1.0
15Guinea-Bissau56.90.8
16Madagascar56.8-0.6
17Benin56.7-2.5
18Comoros56.20.4
19Ghana56-0.2
20Swaziland55.9-5.2
21Senegal55.7-0.2
22Kenya54.71.2
23Zambia54.3-1.5
24Mauritania54-0.4
25Lesotho53.90.0
26São Tomé and Príncipe 53.6-1.8
27Ethiopia52.80.1
28The Gambia52.3-1.1
29Guinea52.24.6
30Democratic Republic of Congo52.1-4.3
31Malawi52-0.2
32Cameroon51.90.1
33Sierra Leone51.8-0.8
34Burundi50.9-2.3
35Liberia50.91.8
36Niger49.5-1.3
37Sudan49.40.6
38Chad49.30.3
39Central African Republic49.2-2.6
40Angola48.60.1
41Togo47.8-5.4
42Mozambique 46.3-3.6
43Djibouti45.1-1.6
44Zimbabwe440.0
45Equatorial Guinea42-3.0
46Eritrea41.7-0.5
47Republic of Congo 38.9-1.1
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