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COMOROS: Government wage bill ballooning

JOHANNESBURG, 8 April 2011 (IRIN) - The convoluted transition of the Comoros presidency could push the government’s wage bill to more than three-quarters of its revenue, "exceeding [its] budgetary capacity", the International Monetary Fund (IMF) said in a statement after a recent mission to the Indian Ocean archipelago.

Presidential elections were held in December 2010, and won by the former vice-president of Comoros, Ikililou Dhoinine, who will be sworn into office on 26 May 2011.

The long transition period is a consequence of reforms to the governance system, regarded as one of the world's most complex, even though the population of Comoros is only about 800,000.

In 2001 Comoros adopted a new constitution, known as the Fomboni Accords, designed to put an end to a history of more than 20 coups and secession attempts since the archipelago gained independence from France in 1975.

The accords provided a semi-autonomous government and president for each of the three islands - Grande Comore, Moheli and Anjouan - with a rotating presidency for the over-arching Union government.

Four separate parliaments and presidents and many other prerogatives made governing the islands very expensive - some estimates had put administration costs for one of the world's poorest countries at 80 percent of the central government's annual budget.

According to the African Economic Outlook (AEO) website, there are no official estimates for unemployment in Comoros; "underemployment is likely to be the norm, however, as little formal employment is available outside the public sector". About 45 percent of the population live on US$1 day or less.

An "unintended consequence" of the political accords had been the holding of elections every year, because the parliaments and presidential terms of the islands were not synchronized, and terms of office also differed, the UN Resident Coordinator in the Comoros, Opia Kumah, told IRIN.

Harmonization of elections

The 2010 poll harmonized elections. Without this, starting in 2011, there would have been "elections every year until 2019", Kumah said.

Apart from the costs and disruption of election days, government officials engaged in campaigning for their respective parties months ahead of voting, which reduced government efficiency and raised political tension.

The island president of Anjouan agreed to serve only half his five-year term, while the other two island leaders cut their terms of office by 18 months, allowing all periods of office to run concurrently in future.

''Without an urgent change in wage policy, the wage bill could reach 11 percent of GDP in 2011, absorbing 76 percent of government revenue''
Kumah acknowledged "the courage" of the country's politicians for "sacrificing" their terms of office, allowing the country to navigate a tricky part of its political evolution.

Tension rose in Moheli in early 2010 because the islanders believed they would miss out on the rotating Union presidency, which had previously been held by Grande Comore and Anjouan in turn.

A compromise was reached with Moheli citizens - the presidential election would be held in 2010, and the presidency of outgoing Union of Comoros President Ahmed Abdallah Mohamed Sambi would end between 1 January and 1 June 2011.

Note of caution

The next parliamentary elections are scheduled for 2014, and island governor and presidential polls will be held in 2015. The system of rotating the national presidency between islands will continue.

Comoros expenditure on both health and education in 2010 was about 5.9 percent of Gross Domestic Product (GDP) and in 2011 is expected to increase to 6.1 percent.

The IMF estimates that remittances account for more than 25 percent of the island's GDP, however, such high levels of transfers "have helped secure much higher imports than permitted by a narrow export base, but failed to boost domestic economic activity."

After the IMF’s third review - between 19 March and 2 April 2011 - of its economic programme supported by the Extended Credit Facility (ECF), the IMF Mission Chief for Comoros, Mbuyamu Matungulu, said in a statement that growth had increased marginally from 1.8 percent in 2009 to 2.1 percent in 2010, but inflation rose by nearly 7 percent, mainly due to higher import prices for food and fuel.

"Nevertheless, the long election and transition period appears to have weakened the focus on reforms. Besides an erosion of recent improvements in managing the wage bill, this has caused an accumulation of payments arrears, as well as delays in the reform of public enterprises,” he said.

"Without an urgent change in wage policy, the wage bill could reach 11 percent of GDP in 2011, absorbing 76 percent of government revenue, exceeding Comoros' budgetary capacity,” Matungulu warned.

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Theme (s): Economy, Governance,

[This report does not necessarily reflect the views of the United Nations]

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