Tanzania Comoros

COUNTRY REPORT

Tanzania Comoros

3rd quarter 1996

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Summary

Tanzania, Comoros 3rd quarter 1996

September 3, 1996

Tanzania Political and economic structures pages 2-3

Outlook: The government’s efforts to curb corruption and maladministration will antagonise the political and business communities before visible results are achieved. Real GDP growth in 1996 is expected to be 4.5%, slowing to 4% in 1997. The annual trade deficit will remain at around $1bn and will be plugged by balance-of-payments support from Tanzania’s traditional donors. pages 4-7

Review: Relations with foreign donors have improved and they have backed the government’s policy measures. The first budget presented by the minister of finance, Simon Mbilinyi, has been taken seriously by interest groups and the general public. Expenditure is due to rise by 21% in nominal terms. The TRA has begun work on time. The inflation rate has continued to slow. The 1995/96 maize crop was much improved on the previous season but relief supplies are still required. Cotton and coffee prices have declined. BHP has pulled out of the Golden Pride gold project. The MV Bukoba tragedy has continued to have repercussions. Tanzania now has a commercial Internet provider. The government has signed the IMF’s Article VIII, and full liberalisation of the shilling against the Kenyan and Ugandan currencies has taken place. pages 7-19

Comoros Political and economic structures pages 20-21

Outlook: A single ruling party will have to overcome traditional factional differences. Mr Taki needs to present a credible figure on the international scene. Corsair is planning a new air service from France. pages 22-23

Review: Mr Taki has cemented diplomatic links with Gabon and France, securing French aid and a small military garrison. The head of the armed forces has been replaced and the president has set out conservative Islamic social codes. The mercenary Bob Denard has been released from prison, but faces trial for the killing of former president Ahmed Abdallah and the failed putsch of 1995; he says he will not return to Comoros. Cabinet meetings have been suspended. Mr Taki has called for a single governing party to be formed and has reshuffled the cabinet. Salary arrears and a slimmed-down government machine have emerged as economic priorities. Arrests have been made on corruption charges. Comoros has accepted the IMF’s Article VIII conditions. pages 24-29

Statistical appendices pages 30-33

Editor: Andrew Manley All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 2 Tanzania

Political structure: Tanzania

Official name: United Republic of Tanzania

Form of state: republic, formed by the 1964 union of Tanganyika and Zanzibar

Legal system: based on English common law, the 1977 Union and 1985 Zanzibari constitutions, as amended

National legislature: National Assembly, comprising 269 members (232 directly elected and 37 women appointed); elected members are chosen by Union-wide adult suffrage every five years; Zanzibar has its own House of Representatives of 59 members (nine women appointees) legislating on internal matters

Last elections: October-November 1995 (legislative and presidential)

Next elections: 2000 (legislative and presidential)

Head of state: president, elected by universal adult suffrage every five years

National government: the president, vice-president and Council of Ministers; last reshuffle November 1995

Main political parties: the ruling Chama Cha Mapinduzi (CCM); Civic United Front (CUF); National Convention for Construction and Reform (NCCR-Mageuzi); United Democratic Party (UDP); Chama Cha Demokrasia na Maendeleo (Chadema)

President Benjamin Mkapa Vice-president Omar Ali Juma Prime minister Frederick Sumaye

Key ministers agriculture & cooperatives Paul Kimiti communications & transport William Kusila community development, women’s affairs & children Mary Nagu defence Edgar Majogo education Juma Kapuya energy & minerals William Shija finance Simon Mbilinyi foreign affairs Jakaya Kikwete health Zakia Meghji home affairs Ali Ameir Mohammed justice & constitutional affairs Bakari Mwapachu labour & youth development Sebastian Kinyondo lands, housing & urban development Gideon Cheyo natural resources & tourism Juma Ngasongwa science, technology & higher education Jackson Makweta trade & industry Abdallah Kigoda water & livestock development Pius Ng’wandu works Anna Abdallah

Governor of the central bank Idris Rashidi

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Economic structure: Tanzania

Latest available figures

Economic indicators 1991 1992 1993 1994 1995a GDP at market prices TSh bn 626 766 962 1,249 n/a Real GDP growthb % 0.7 2.6 4.4 3.5 3.5 Consumer price inflationb % 22.2 23.1 25.3 34.1 30.0 Populationc m 25.2 25.9 26.7 27.4 28.2 Exports fob $ m 362 401 462 519 550 Imports cif $ m 1,285 1,314 1,300 1,505 1,450 Current account $ m –451 –422 –409 –390 –400 Reserves excl gold $ m 203.9 327.3 203.3 332.1 270.2d Total external debt $ m 6.689 6,781 6,963 7,442 n/a External debt-service ratio % 39.8 40.8 29.2 20.4 n/a Coffee productione ’000 tons 37.7 52.2 56.3 48.5 49.0d Cotton (lint) productione ’000 tons 49.0 76.5 68.8 48.4 44.0 Manufacturing indexb (1985=100) 117 110 110 101f n/a Exchange rate (av) TSh:$ 219 298 405 510 575d

August 30, 1996 TSh580.0:$1

Origins of gross domestic product 1994b % of total Components of gross domestic product 1994b % of total Agriculture, forestry & fishing 57.1 Private consumption 89.6 Trade & hotels 15.3 Government consumption 7.7 Manufacturing 7.6 Gross fixed capital formation 27.5 Transport & communications 6.5 Increase in stocks 3.2 Construction & utilities 5.2 Exports of goods & non-factor services 26.4 Mining 1.3 Imports of goods & non-factor services –54.4 GDP at factor cost incl others 100.0 GDP at market prices 100.0

Principal exports 1994 $ m Principal imports 1994 $ m Coffee 115.2 Machinery & transport equipment 545.1 Cotton 104.8 Textiles & clothing 231.5 Manufactures 76.8 Petroleum & products 148.6 Cashew nuts 52.0 Food & drink 127.0 Minerals 30.2

Main destinations of exports 1995g % of total Main origins of imports 1995g % of total Germany 9.2 UK 9.6 Japan 8.2 Kenya 9.0 India 8.1 Japan 7.2 Belgium-Luxembourg 6.5 Saudi Arabia 6.3 UK 5.4 China 4.9 a EIU estimates. b Mainland only. c EIU estimates based on census results. d Actual. e Crop years ending June. f Average January-June. g Based on partners’ trade returns; subject to a wide margin of error.

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Tanzania

Outlook

The government is The time has come for a clean-up of Tanzanian public life, but a political making many enemies— culture of corruption is deeply embedded. Significantly, the new administration has begun to show itself earnest in its efforts to achieve an improvement. The first hurdle has thus been cleared: newspapers carry “War against corruption real” headlines; and citizens believe them. Tanzania’s punctilious legal community will complain that this or that bold measure is unconstitu- tional (and its voice can be damaging), but on the whole Tanzanians are happy to see their newly elected leaders making surprise moves such as the sacking en bloc of Dar es Salaam’s corrupt city council. At the same time, however, it should be borne in mind that if, as appears the case more generally, the government is embarking on a long-term project of social re-engineering, all that can realistically be produced in the short term is uncertainty and an increasing number of enemies for the new government.

—who will plot against it Cast into the political wilderness, protégés of the ex-president, Ali Hassan Mwinyi, and the so-called Chama Cha Mapinduzi (CCM) dinosaurs (nominally socialist hardliners) will enjoy the support of those former associates from the (mostly Asian) business community who profited from corruption. As foreign donors push for the prosecution of high-profile tax evaders, wealthy people will find themselves in embarrassing positions.

However, there is little prospect of business leaders ending up in prison. Many have dual nationality, and most would have the option of departing on their other passport first. It is likely that few cases will be brought to final prosecution. In any case, as long as improved conduct in public life can be achieved without this, over time the international community will focus on other aspects of aid conditionality.

Mr Mrema will struggle to Augustine Mrema, the unsuccessful presidential candidate of the National get elected Convention for Construction and Reform (NCCR-Mageuzi), may have chosen the wrong by-election to fight his way into parliament. Apart from the issues of ethnicity and faith which are against him in the southern, Muslim seat of Temeke (Dar es Salaam), the timing is wrong. He stands just as the voting public begin to believe that another CCM government might, after all, be a different CCM government. In edging aside Tambwe Hiza, the NCCR’s candidate in last year’s vote so that he can stand himself, Mr Mrema has also caused a measure of dissent within his own party. And the opposition vote will be split, as in 1995, by the inducement of campaign funding for candidates from

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state coffers. In the immediate aftermath of last year’s voting, Mr Mrema would have had a landslide in Temeke. In October this year it could go either way.

Steady growth is expected The recently released budget assumes real GDP growth of 4.7% in fiscal this year 1996/97 (July-June), and this may yet be achieved. In the current year improved harvests of subsistence food crops, in particular maize, will lay the foundation for accelerated agricultural growth, although no increase is expected in the output of the main cash crops. The EIU expects that agriculture’s forecast expansion of 5% in real terms will raise the overall growth figure close to the finance minister’s target.

In 1997, however, given the signals that producers are receiving from falling cash-crop producer prices, agricultural growth is likely to slow once again, assuming normal climatic conditions and a smaller cereals harvest in conse- quence. New measures to capture gold production within official channels once more, as well as continuing investment elsewhere in the mining industry, can be expected to raise the pace of growth in the industrial sector next year. However, an overall expansion of economic activity by more than 4% in real terms now appears unlikely.

Inflation will continue to Prices rose by 27% year on year between December 1994 and December 1995, abate but in 1995 as a whole the national consumer price index was 30% higher than in the previous year. By the same token, year-on-year inflation will probably be running at less than 20% by the end of 1996, but the average inflation figure for the year as a whole will be nearer 23%.

The finance minister, Simon Mbilinyi, has set himself—and the governor of the Bank of Tanzania (the central bank), Idris Rashidi—the task of reducing the inflation rate to 15% by the end of fiscal 1996/97. Although we expect fiscal discipline to be maintained and enhanced under Mr Mbilinyi, we do not believe that this target will be achieved. Given that the shilling will have to be steered more sharply downwards in coming months in order to stop it appreci- ating in real terms, holding the inflation rate at below 20% on average during 1997 will already be an achievement.

Forecast summary (domestic)a (% real change; calendar year) 1994b 1995c 1996d 1997d GDP at factor cost 3.5 3.5 4.5 4.0 of which: agriculture 3.5 4.0 5.0 3.5 industrye 2.0 2.0 4.0 4.5 services 4.0 3.0 4.0 4.0 Consumer prices 34.1 30.0 23.0 18.0

a Mainland only. b Actual. c EIU estimates. d EIU forecasts. e Includes mining and construction.

Trade data are confusing— Although data on a range of key financial indicators are now promptly (and consistently) reported by the central bank, national trade data remain a mess. Export and import series published with the June budget bear no relation to historical series published in the principal statistical sources. The smuggling and under-declaration of imports, on the one hand, and the liberalisation of

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former single-channel marketing of export commodities such as coffee, on the other, mean that it is difficult to make reliable estimates of current merchandise trade. The EIU forecasts on the basis of historical balance-of-payments data as provided by the central bank.

The budget projection that actual export receipts will reach $723m this year may be discounted. If confirmed, the figure can only point to a statistical discontinuity in the series. Expected output trends and world prices for the leading commodity exports suggest that earnings, if consistently recorded, will do little more than stagnate in current dollar terms. Cotton export volumes are likely to be steady into 1997, leaving receipts to follow world prices. Against weakening prices, coffee volumes may be higher this year, before declining by around 10% in 1997. Consistently recorded, we expect merchandise exports to earn no more than $600m in 1997, leaving a $1bn trade deficit plugged by renewed balance-of-payments support from donor countries.

—but capital-account The EIU still hesitates to describe a new IMF agreement as a certainty, as some trends are clearer observers have concluded. However, with a Fund team in the field once more in early September, the long-anticipated deal looks increasingly likely to be reached. An expected $200m in the form of a three-year Enhanced Structural Adjustment Facility (ESAF) credit is in prospect, together with further adjustment credits from the International Development Association (IDA, the World Bank’s soft-loan affiliate).

This and the renewed commitments of aid received from donors in Paris during July represent “hard cash”, while the impact of a Paris Club restructuring of the country’s official debt will be, at least in part, an exercise in ex post accounting adjustment, given that the bulk of the debt is not being serviced. This is not to underestimate the longer-term implications of the progressively more generous (and more realistic) write-offs being planned by Western governments as measures finally to release the poorest and most-indebted countries from their im- possible burdens. Over the short-term horizon considered here, however, a creditors’ meeting may have perverse effects if, as an “entry fee” to the negotiations, the Tanzanian authorities are obliged to clear some measure of arrears first.

Forecast summary (external) ($ m unless otherwise indicated) 1994a 1995b 1996c 1997c Merchandise exports fob 519 550 550 600 of which: coffee 115 150 125 110 cotton 105 80 70 80 manufactures 77 60 70 90 Merchandise imports cif 1,505 1,450 1,550 1,600 Current-account balance –390 –400 –400 –350 Average exchange rate (TSh:$) 510 575a 590 680

a Actual. b EIU estimates. c EIU forecasts.

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Gross domestic product Real exchange rates (c) % change, year on year 1990=100 6 120 Tanzania 5 Africa 110 KSh:$ 4

3 100

TSh:$ 2 90

1 R:$ 80 0 1993 94 95(a) 96(b) 97(b) (a) Estimates. (b) Forecasts. (c) Nominal exchange rates adjusted for changes in relative consumer prices. Sources: EIU; IMF, International Financial Statistics; World 1990 91 92 93 94 95 96(b) Economic Outlook.

Review

The political scene

Mr Mkapa tightens his Clearing the way for his presidential successor, Benjamin Mkapa, Ali Hassan grip— Mwinyi stood down early as chairman of the ruling Chama Cha Mapinduzi (CCM; 2nd quarter 1996, page 10). Mr Mwinyi himself had continued as party vice-chairman to Julius Nyerere through much of the former’s first term as Union president. The CCM special conference that gathered to elect a new party chairman in June provided Mr Mkapa with the opportunity to consoli- date his hold on a political institution that harbours a number of his enemies. It also required that he court Zanzibari support within the party at a time when external pressure was mounting for decisive action to break the political impasse in the isles. The opposition Civic United Front (CUF), cheated of electoral victory late last year, has mobilised widespread support for its cause.

—at the cost of In the event, Mr Mkapa was elected unopposed to the vacant chairmanship, accommodating Zanzibari receiving all but 11 of the 1,259 votes cast. In contrast to the election of hardliners— Mr Mkapa as the CCM presidential candidate, horse-trading had been con- tained behind the scenes, but only at the cost of capitulation to Zanzibari hardliners. The Union government interior minister, Ali Ameir Mohammed, was reappointed to his post of CCM deputy secretary-general (Zanzibar), despite having been central to last October’s Zanzibari electoral shenanigans. Moreover, subsequent State House policy vis-à-vis the isles has shown no immediate shift.

—casting out old hands— Following the president’s election to the party chairmanship, the CCM secretary-general, Lawrence Gama, accepted the resignations of senior col- leagues before stepping down himself. Paul Bomani and a party ideologue, Kingunge Ngombale-Mwiru, gave up their posts as organisation and publicity secretaries respectively, and were not reappointed. However, Mr Ngombale- Mwiru was not sent to the Tanzanian Siberia of a regional commissioner’s office.

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Instead, he was appointed minister of state in the prime minister’s office. Mr Gama, meanwhile, was sent to a regional post in Morogoro, inland from Dar es Salaam.

—and drafting in new The new appointees to senior party posts are unknown, brought in from the faces regions. The new secretary-general is Philip Mangula, the former Kagera regional commissioner. Mr Gama’s predecessor as Morogoro regional commissioner, the new-generation party cadre and political scientist, Ahmed Kiwanuka, assumes ambassadorial rank as presidential adviser on political and international affairs. This move is a reflection of the fact that the incumbent foreign minister, Jakaya Kikwete, was appointed as a domestic political expedi- ent and is not considered to have the background to perform his role ade- quately. Mr Kikwete, when finance minister, was latterly the champion of the Muslim faction within the CCM and came close to securing the party’s presidential nomination ahead of Mr Mkapa.

Dar is a slum— In an initiative little commented upon at the time, the new prime minister, Frederick Sumaye, gave the Dar es Salaam city council six months to clean up the city soon after his appointment late last year. A non-specific “or else” threat was given little credence at the time. By mid-1996 the city was little changed visibly, with the Tanzania Tourist Board describing the economic capital as a national shame which was hurting the renascent tourism industry. Apart from the fact that much of the inner city is best characterised as a “slum”, the council had been a focus for corruption, especially where controversial land grants were concerned, and had seemingly also become involved in organised crime and the international drugs trade.

—and the council is sacked Presenting his office’s expenditure plans to parliament during the budget debate in late June, Mr Sumaye announced the dissolution of the city council to almost universal surprise. Zanzibar might still have been too sensitive a party issue to tackle head on, but a clean-up in Dar es Salaam was a bold substitute. Unfortu- nately, the prime minister was wrongly advised as to the legalities of his move. His appointed interim authority, the Dar es Salaam City Commission, will have to be replaced by an elected body within six, rather than 12, months, but in the meantime the entire municipal structure has been swept away. Municipal employees are being screened for reappointment by the interim authority, which is led by an experienced regional administrator, Charles Keenja.

As with any sweeping and unexpected action, the move has had its critics. A Tanzanian columnist for the regional weekly The EastAfrican characterised the use of messy streets as a pretext for getting “the incurably corrupt and grossly incompetent council executives safely out of the way, and with impunity” as a “sinister motive”. Elsewhere it was seen simply as good politics.

The government’s first Various petitions challenging declared results in last year’s elections have been by-election— heard during the past quarter. CCM victories were confirmed, unsurprisingly, in constituencies on Unguja (the main island of the Zanzibari archipelago). For the opposition, meanwhile, Makongoro Nyerere, the son of Julius Nyerere, Tanzania’s founding president, was confirmed as the National Convention for Construction and Reform (NCCR-Mageuzi) MP for Arusha. In the Dar es Salaam

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constituency of Temeke, however, the elected CCM member fought a drawn-out legal battle over allegedly forged academic certificates before resigning suddenly, on grounds of ill-health, at the end of May. His decision, a surprise to opponents and the CCM machinery alike, precipitates what will be the first by-election of Mr Mkapa’s presidency.

—brings Mr Mrema back The by-election vote is due in October and the NCCR leader, Augustine Mrema, to the hustings will stand. The charismatic former deputy prime minister and defeated presidential candidate is putting his personal credibility on the line. An upcountry Christian of the Chagga people, he is standing in a solidly Muslim constituency, banking on strength of personality and the opposition party’s strong urban appeal to overcome issues of faith and ethnicity.

The Zanzibari impasse The impasse that has paralysed Zanzibar since last year’s unsatisfactory elec- continues tions (4th quarter 1995, pages 9-12) continued during this quarter. The opposition CUF, whose presidential candidate, Seif Shariff Hamad, is widely believed to have won a slim majority of votes cast despite being narrowly declared the loser, has succeeded in mobilising support for its rejection of the declared result and boycott of the Zanzibari legislature. However, every week that the matter is not brought to a head further entrenches the status quo and leaves the CUF realistically hoping for less.

The secretary-general of the Commonwealth, Emeka Anyaoku, visited the isles in August and seems to have laid the foundations for some form of negotiated settlement, according to the London-based newsletter Africa Confidential. How- ever, donor countries’ suspension of aid to the isles is ultimately the only force that will impel the re-installed Zanzibari president, Salmin Amour, to accept any form of power-sharing with the CUF. The ground has moved to the extent that this is all the opposition can expect: the CCM administration is entrenched and will not be swept away in fresh elections.

Soldiers are unruly and A handful of otherwise unrelated events have combined with planned security disgruntled force retrenchments to suggest that the Tanzania People’s Defence Force (TPDF, the army) should be regarded as a source of potential tension in coming months. In early June soldiers at an officer training school in Monduli, Arusha Region, turned out en masse to avenge the injury of a colleague in a bar-room brawl. Shops were looted and burned. A week earlier, in the southern town of Songea, soldiers attacked people allegedly involved in the theft of a colleague’s bicycle. These random acts of indiscipline come at a time when the defence minister, Edgar Majogo, has announced that retrenchments from the army will be part of the general trimming of the public service. The minister was reluc- tant to reveal details and in mid-August it fell to a civil servant within the president’s office to confirm that 15,000 of the 40,000-strong army would be demobilised before the end of fiscal 1996/97 (July-June).

Mr Nyerere leads sanctions On July 25 the former military ruler of Burundi, Major Pierre Buyoya, returned against Burundi to power in another coup d’état. In the process, the Tutsi-dominated army took power from an elected member of the majority Hutu people and plunged the country into a crisis of regional proportions. Calls for international sanctions against the regime were led by Mr Nyerere, who had been brokering peace

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initiatives as the country descended into renewed internecine strife (2nd quarter 1996, page 10). With the exception of (Tutsi-led) Rwanda, regional neighbours soon made common cause with Tanzania. At the end of August the UN Security Council passed a resolution giving the Buyoya administration 60 days to agree to unconditional negotiations with the ousted government or face a UN-sponsored arms embargo. At the beginning of September, as regional governments considered suggestions of a multilateral military intervention in the country, Hutu forces loyal to the former president engaged Tutsi troops on the outskirts of the capital, Bujumbura.

The economy

Donors back policy Zanzibar aside, Tanzania’s relations with its donor partners and the multilateral measures financial institutions continued to improve during the period under review. The 1996/97 budget (see below) was well-received by international commenta- tors as a continuation of the improvements seen in recent months, and the donor community gathered in Paris on July 18-19 for a successful Consultative Group meeting with a Tanzanian delegation led by the finance minister, Simon Mbilinyi (an academic economist). The minister was urged to sustain recent improvements in fiscal management and came under explicit pressure to de- liver the prosecution of tax evaders. New commitments of aid totalling $1.2bn were outlined at the meeting, of which $560m is expected to be disbursed during the 1996/97 fiscal year (July-June).

The indications were that a Paris Club rescheduling of the country’s external debt to official creditors would follow later in the year, together with a renewed IMF Enhanced Structural Adjustment Facility (ESAF) credit.

Mr Mbilinyi’s first Mr Mbilinyi presented his maiden budget in Dodoma on June 20. It was the budget— first budget to be presented amid the fiscal and physical wasteland of the putative national capital. More significantly, however, it was a milestone event that is likely to be looked back upon as the point at which the Treasury turned from frantic implementation of emergency measures to concentrate once more on the planning and management of government finances.

—is taken seriously Union government financial projections, broadly realisable and consistent with macroeconomic stability, were presented in Dodoma. And yet the speech was met with a surprising amount of complaint. Certain interest groups had legiti- mate reason to be unhappy (see below), but the general response is perhaps explained by the fact that people read this budget, believed it would actually be implemented and expected it to affect them. For as long as the finance minister of the day “pretended that he was administering a budget and they [the business community] pretended to pay him”, as one commentator put it, the annual titivation of the tax regime could be safely ignored. This was different.

At the same time, a generally enhanced sense of accountability encouraged comment upon the few arithmetical inconsistencies that the document did contain. For decades the Tanzanian public has been apparently unconcerned by the fact that statements of policy and performance have routinely borne the most fundamental and elementary of inconsistencies. Suddenly, a faulty line

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in an appendix table on imports was a national joke. Standing back from the detail, this points to a landmark shift in political culture.

Spending is to rise As compared with the originally budgeted TSh628bn ($1.08bn) for 1995/96, by 21%— total spending is projected to rise by 21% to TSh759bn in 1996/97. This would be the equivalent of some $1.3bn, one-fifth of forecast GDP and, allowing for likely inflation rates, a broadly unchanged level of spending in real terms.

Compared with expected 1995/96 outturns, however, the budgeted figures represent significant real increases. Although the government’s finances were dragged back on course in the first half of this calendar year (2nd quarter 1996, page 12), the overall figures for fiscal 1995/96 reflect the missed targets and aid squeeze of earlier months. Foreign loans and grants were expected to be 37% below budget, with concomitant underspending of both recurrent and capital budgets. In 1996/97 Mr Mbilinyi expects income from local and foreign sources to bounce back by 46% from the depressed expected outturns of the previous year.

Government finances (Union)a (TSh m; fiscal years Jul-Jun) 1995/96 1996/97 Budget Expected Budget Total income 627,688 n/a 758,896 Recurrent revenue 455,981 438,755 563,756 Foreign loans & grants 184,744 116,185 187,538 Non-bank borrowingb 13,785 n/a 24,257 Bank borrowingb –26,822 n/a –16,654 Total spending 627,688 521,432 758,896 Recurrent spending 488,830 434,051 631,906 Capital expenditure 138,858 87,381 126,990

a Budgets are presented to balance. Figures for receipts do not distinguish deficit-financing items. Recurrent spending includes debt repayments. b From domestic sources.

Source: Budget speeches.

—demanding the best Even without amendments to the tax regime, the finance minister expects to efforts of the TRA— raise TSh550bn ($948m) from domestic sources of income in 1996/97. Some 25% higher than the expected 1995/96 outturn, this is a modest increase in real terms. Much is hoped for from the centralised compliance watchdog, the Tanzania Revenue Authority (TRA; 4th quarter 1995, page 18), which began work immediately the new fiscal year commenced in July under the chairmanship of another economics professor, Benno Ndulu, once an adviser to the former president, Ali Hassan Mwinyi. Apart from overseeing collection, the TRA will be responsible for advising the Treasury in the key area of discretion- ary tax exemptions. It was abuse of this prerogative by a previous cohort of senior officials that sabotaged efforts to maintain macroeconomic stability during structural reform under the late Kighoma Ali Malima’s tenure of the finance portfolio in 1993-94.

—closure of the “Zanzibar Despite efforts to harmonise mainland and Zanzibari tariffs before the TRA route”— opened, the authority began its work with the notorious “Zanzibar route” still open. Lower import taxes in the isles (the discount is up to 30%) have led to a

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busy informal re-export trade between the two parts of the Union. Explicit reference to the need to close this revenue loophole was prominent in the World Bank’s press release that followed July’s Consultative Group meeting. The TRA’s commissioner-general, Melkizedeck Sanare, began work by pledging that the mainland would “continue to charge the balance” of tariffs due. How- ever, in practice little can be done until the Zanzibari authorities fall into line and cede this aspect of fiscal autonomy to the Union. It was reported at the end of August that the Zanzibari government had invited the IMF to study the impact of the tariff differential.

—and TSh14bn from new The minister’s projections implied the need to raise around TSh14bn ($23m) in taxes new tax and other revenue during 1996/97, and some of the ways in which he has set about sourcing these funds have been controversial. Tax on traditional exports (trade in the main primary commodities) was reintroduced at a rate of 2% of fob value, to the consternation of agricultural sectors selling into weakening markets (see Agriculture and Foreign trade and payments). The recently privatised beer and cigarette industries also complained about measures that reduced protection from Kenyan beer imports and raised duty on cigarettes, which had already been adjusted in the mini-budget in January (see Manufacturing). Smokers are projected to contribute the largest element of the minister’s additional revenue, some TSh2.8bn.

Sources of recurrent revenue, 1996/97 (Fiscal year Jul-Jun) TSh m Expected from existing tax regime 550,193 Expected from new measures 13,564 Excise duty 4,857 Beer 784 Soft drinks 300 Local spirits 215 Imported spirits 151 Garments 600 Cigarettes 2,807 Stamp duty 2,000 Income tax 2,183 Car registration 484 Miscellaneous fees 1,421 Export taxes 1,800 Non-tax measures 819 Total recurrent revenue 563,756 Source: Budget speech.

Minimum wage and A long-overdue consolidation of the minimum wage and (untaxed) allowances allowances are was also undertaken as part of the budget. Overall, the take-home pay of consolidated minimum wage earners will rise a little ahead of inflation, but the new consolidated minimum of TSh30,000 ($50) per month will attract income tax and this has proved controversial. The previous minimum, paid to the lowest grade of government employee, had been TSh17,500, plus tax-free allowances of TSh2,000 for rent and up to TSh4,000 for transport. Meanwhile, the personal income tax threshold has been raised from TSh17,500 to TSh20,000, with the result that one-third of the new minimum wage is taxable. This and other

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Tanzania 13

proposed changes to income tax are forecast to net the Treasury an additional TSh2.2bn in 1996/97.

Inflation slows Fiscal restraint over the first half of the year reduced the annual rate of growth of broad money, M3, to 16% by June (growth of the narrower monetary aggregates was slower still). In the process, and aided by a firm shilling, year-on-year inflation slowed to 22.7% by the end of the second quarter. Consumer prices had been rising at a year-on-year rate in excess of 30% as recently as April 1995.

Treasury-bill yields have reflected the evolving structure of the market for government paper more than objective credit conditions (2nd quarter 1996, page 12). However, in June the average yield implied by the month’s auction results saw its first increase in a year of steady decline (from yields of close to Money and inflation % change, year on year 50% in mid-1995). The upward trend continued thereafter and the auction of

40 August 14 returned a weighted average yield of 18.6%. Selected financial indicators, 1996

30 (% change year on year unless otherwise indicated) Jan Feb Mar Apr May Jun Money supplya 29.8 27.1 19.9 17.6 15.7 16.0 20 Consumer pricesb 25.1 24.8 26.0 25.5 23.7 22.7 M3 c Consumer prices Treasury-bill yield 10 (% per year) 31.8 25.9 21.6 15.7 10.6 17.0 Value of the shillingd –2.7 –0.1 –0.5 –0.1 –1.4 –4.4

a b c 0 Extended broad money, M3. As measured by the national consumer price index. Weighted 1994 . . . 95 . . . 96 . average yield at auction. d Interbank rate against the US dollar. Source: Bank of Tanzania. Source: Bank of Tanzania.

Agriculture

The maize harvest According to the agriculture ministry’s Food Security Unit, Tanzania will improves— achieve aggregate self-sufficiency in basic foodstuffs this year. The 1995/96 maize crop, which supplies needs during the 1996/97 marketing year, is put at 2.7m tons, compared with the previous season’s 2.57m tons. Meanwhile, the country’s Southern African Development Community (SADC) neighbours have recorded a sharp recovery in harvests from their heavily drought-affected crops of last year.

—but relief supplies are Despite aggregate self-sufficiency, local shortages persist due to a poor distrib- still required ution system and recent population movements. Refugee populations entering the north-western regions from Rwanda and Burundi have created local shortages in Kagera, exacerbated by the influx of mourners, family and friends in the wake of the sinking of the MV Bukoba (see Transport and tourism). At the beginning of June the Zanzibari chief minister, Mohammed Bilal, appealed to the World Food Programme (WFP) for food aid for the isles. The request was somewhat ironic given that only weeks before the Zanzibari authorities accused the opposition Civic United Front (CUF) of playing party politics when it claimed that relief supplies were required to relieve famine in parts of Pemba (1st quarter 1996, page 10).

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 14 Tanzania

Japan, meanwhile, has delivered food aid earmarked in part for the isles, as well as for upcountry centres. In an interesting counterpoint to its assumed role as a willing importer of East African goods (see Foreign trade and payments), Japan is an enthusiastic donor of Thai rice to the world’s hungry. Food aid of this form was committed by Japan at the end of May, when rice worth ¥500m ($5m) was handed over in Dar es Salaam. In mid-June a further ¥950m was committed by Tokyo as a grant-in-aid for the purchase of agricultural inputs.

The cotton season opens The 1996/97 cotton marketing season opened on June 17, with cooperatives with prices lower— and private ginners typically paying as little as TSh160/kg ($0.25/kg) of seed cotton. In the previous season producers (who have, in the meantime, seen costs continue to rise) had enjoyed prices in excess of TSh200/kg. Squeezed by lower world prices and the reintroduced export tax, the processing industry has been unable to offer more. Indeed, by mid-August buyers in Mara Region were reported to have reduced offer prices to TSh120/kg, as liquidity problems con- strained local cooperative societies from buying. The Liverpool-based industry newsletter Cotton Outlook points out that, as the buying season began, in some cases ginners had committed themselves in advance to buying at prices that already failed to take account of the surprise reintroduction of the export tax in the June budget.

Against these disappointing price trends, estimates of the volume of the current crop indicate that more than 70,000 tons of lint cotton may be produced again this year. Cotton Outlook and the US Department of Agriculture report that the 1995/96 crop totalled 73,000-75,000 tons. Each new set of national figures differs widely from its predecessor, but for historical compari- son the EIU has adopted the cotton marketing board series reproduced by the central bank (see Economic structure page).

—while the coffee board On August 21, in a statement to mark Farmers’ Day, the Tanzania Coffee Board bemoans taxation (TCB) claimed that the country’s principal export industry was also suffering an onerous tax burden. In a statement faxed to Reuters, the board’s public relations officer, Damian Salla, claimed that the government now levied seven different coffee taxes, a burden which he believed “may eventually undermine efforts to revitalise the industry”.

At the end of the month the TCB’s managing director, Edward Sannda, forecast lower coffee output from the 1996/97 crop, due to disease and lack of rain during the flowering season, but claimed that closer control would enhance quality, a recent concern among buyers (2nd quarter 1996, page 16). Mr Sannda also foresaw lower world prices translating into reduced output over the coming seasons. Annual output figures are confused by the fact that some data are reported on the conventional basis of October-September years while others adopt the Tanzanian July-June season. On the latter basis, output is expected to be in the region of 45,000 tons in 1996/97, down from 51,000-52,000 tons in 1995/96.

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Tanzania 15

Mining and energy

The economy remains According to the latest energy balance estimates prepared for the EIU by Energy wood-burning Data Associates of London, Tanzania is still a wood-burning economy. Some 87% of primary energy supply in 1995 was derived from sources other than the four main industrial sources. Apart from a little bagasse (produced as a by- product of the sugar industry), 8.5m tons of oil equivalent was consumed in the form of wood fuel.

In relation to national aggregates, the contribution of production at the Kiwira coal mine is negligible as the facility undergoes rehabilitation with Chinese assistance. In June the regional weekly The EastAfrican reported that the $2m project was progressing, following the delivery of necessary equipment from China. Current output is put at 75,000 tons annually, compared with installed capacity of 150,000 tons. Parallel rehabilitation of thermal generating capacity at Kiwira is also expected to improve electricity supply to key industrial facili- ties in Mbeya.

Primary energy balance, 1995 (m tons oil equivalent) Elec- Oil Gas Coal tricity Other Total Primary production 0.00 0.00 0.00 0.42a 8.53 8.95 Imports 0.90 0.00 0.00 0.00 0.00 0.90 Exports 0.03 0.00 0.00 0.00 0.00 0.03 Primary supply 0.87 0.00 0.00 0.42a 8.53 9.82 Net transformationb 0.12 0.00 0.00 0.29 0.03 0.44 Final consumption 0.75 0.00 0.00 0.13c 8.50 9.38

a Expressed as input equivalents on an assumed generating efficiency of 33%. b Transformation input and output, plus energy industry fuel and losses. c Output basis.

Source: Energy Data Associates.

BHP abandons the gold Having recently retreated from plans to develop the Kagera nickel deposit in rush partnership with Canada’s Sutton Resources (2nd quarter 1996, page 17), the Australian mining house Broken Hill Proprietary (BHP) was reported in August to have decided not to develop the Golden Pride gold deposit on commercial grounds. It is reported, however, that the gold rush continues with a second Australian company, Resolute Samantha, taking up an interest in the Golden Pride concession.

The Canadian and Australian companies are seeking to develop the country’s gold reserves alongside Lonrho’s Ashanti Goldfields and the South African major Anglo American, among others. In the meantime, however, most current production is artisanal and recorded activity in the sector has fallen in the latest sets of figures to be released by industry and official sources. Accord- ing to the Chamber of Mines, gold exports declined to $3.3m in 1995, from $24.1m the previous year, as a result of the central bank’s decision to privatise gold marketing and business uncertainty ahead of last year’s elections which led to heavy demand for parallel-market gold. According to the latest mineral recovery data from the Ministry of Energy and Minerals, 1.4 tons of gold were mined in 1995, down from a peak of 8.6 tons in 1992.

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 16 Tanzania

Manufacturing

Privatised manufacturers The recently privatised national brewing and cigarette companies, Tanzania complain— Breweries Limited (TBL) and the Tanzania Cigarette Company (TCC), have not greeted the detail of the June budget favourably. TBL, which is 46% owned by a subsidiary of South African Breweries, argues that domestic production is now more heavily taxed than regional imports of beer. The finance minister’s budget aims to raise additional revenue from increased levies on beer imported from outside the Common Market for Eastern and Southern Africa (Comesa), but has reduced duty on imports from Comesa neighbours: Kenya Breweries is the main competitor. Subtly playing on sensitivity to foreign sell-offs, the Kenyan company advertises in kiSwahili even in the English-language media, promoting its products as being more properly of the region that those of a South African-owned “national” brewer.

TCC, in which RJ Reynolds of the USA took a 45% stake late last year, has seen duty on its products raised twice since the beginning of the year. Untouched in the 1995 budget, as the privatisation sale was being concluded, the tax was raised in the January mini-budget, with a further 20% increase effected in the 1996/97 budget.

—ahead of stock-market The beer and cigarette producers are among profit-making privatised industries listings that the newly formed Capital Markets and Securities Authority (CMSA) would like to see listed on the Dar es Salaam Stock Exchange, which it still hopes to launch before the end of the year. The CMSA’s managing director, Fratern Mboya, told the Business Times in July that without these flagship listings the authority would not risk launching the exchange because “it will be too weak to succeed”. The government holds less than 50% of the equity in each company and the logic of its privatisation programme would seem to dictate that it leads with the release of further shares into wider ownership via the exchange. It is understood, however, that there is a reluctance to proceed in this manner, without the new foreign investors agreeing at the same time to part with a portion of the stakes which they have only recently acquired. Negotiations continue.

Other companies targeted by the CMSA for early listing include Tanzania Oxygen Limited and the local petroleum product distribution subsidiaries of British Petroleum (BP) and Italy’s Agip.

Transport and tourism

Fall-out continues from The sinking of the MV Bukoba on Lake Victoria in late May with the loss of the MV Bukoba tragedy almost 1,000 lives (2nd quarter 1996, page 11) has had various after-effects. In mid-June the transport minister, William Kusila, formally launched an international commission charged with investigating the disaster, in which it was revealed that the number drowned was double the licensed capacity of the Tanzania Railways Corporation (TRC) vessel. Shaking off opposition calls for his resignation, the minister has also announced plans for the formation of a new body to oversee maritime safety. Murder charges against the captain, who was reported to have attempted suicide in custody, have meanwhile been

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Tanzania 17

dropped. The disaster has also assumed a regional dimension, given that the three East African Cooperation (EAC) secretariat neighbours, Tanzania, Kenya and Uganda, share the lake shore and shipping routes. The regional weekly newspaper The EastAfrican has reported surveys of safety and navigational equipment in neighbouring ports that suggest the risk of a similar tragedy occurring in Kenyan waters.

An emergency fund has been established to support the families of those drowned in the sinking, but a small fortune has meanwhile been spent buying advertising space for messages of condolence. Every institution and community imaginable was drawn into an unseemly and competitive orgy of full-page expressions of remorse in the country’s newspapers. These almost universally invoked the name of the Christian god. The upcountry population is predomi- nantly Christian, but the trend seemed also to betoken a shifting balance between the major religions with the passing of the presidency from Muslim to Christian hands last year.

The Aga Khan’s lodges are In mid-June the president, Benjamin Mkapa, and the visiting Ismaili leader, the inaugurated Aga Khan, formally opened the Lake Manyara Serena Lodge, the first of three formal openings of tourist investments by the Aga Khan Fund for Economic Development in Tanzania’s so-called northern circuit of national parks. During his visit, the eponymous Ismaili leader also announced a planned $10m expansion of the Aga Khan Hospital in Dar es Salaam to be undertaken by the Aga Khan Development Network, before departing for Kenya where the same network is active in the social sector.

Commercial Internet In July Tanzania On-Line was launched as the country’s first commercial services go on-line Internet service provider, offering a range of electronic communication services via the global computer network. The proprietor, Ashak Kabani, revealed pric- ing to the Business Times that is hardly competitive by international standards, but previous Internet access had been possible only via a handful of unreliable government research institutes which themselves used service providers outside the country. The potential commercial uses of the Internet are impressive and Tanzania’s high commissioner to South Africa has said that, before the end of the year, his diplomatic mission will be exploiting the technology to help promote the country’s exports and investment potential.

Foreign trade and payments

Current-account At the end of July the IMF announced that the Tanzanian government had liberalisation is entrenched recent liberalisation of its current payments regime by indicating entrenched— its acceptance of Article VIII of the Fund’s Articles of Agreement. In practice, this means an undertaking not to reimpose restrictions on the transfer of funds for current payments such as the repatriation of interest, profit and dividends on crossborder investments. As such, the step is a reassurance to the country’s foreign partners that the government intends to pursue external balance through consistent macroeconomic policy rather than resort to crude ex post measures of current-account restriction. Tanzania was the 130th Fund member to accept the obligations of Article VIII.

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 18 Tanzania

—as further regional The country’s acceptance of Article VIII obligations was combined with the cooperation measures are move to regional currency convertibility that was effected on July 1. The latter taken is an internal East African Cooperation (EAC, which groups Tanzania with Kenya and Uganda) initiative to facilitate crossborder trade among the three cooperating neighbours. In practice, it rests on the willingness of the three central banks to convert home currency balances repatriated from either of the other two states. It implies that an Arusha fuel station may safely accept Kenyan shillings from a delegate to a regional conference on reinsurance, but it does not oblige it to, as the Business Times reported that one such delegate had discovered during August.

Export prices pause on the The EIU’s index of Tanzanian export unit prices fell to 114 in the first quarter way down of 1996, its lowest level since early 1994. During May a year-long decline in export prices was temporarily reversed as Other Milds coffee prices firmed, taking the combined index to 117 during the month. However, in trends too recent to be captured by the index, frost fears during the Brazilian cold season failed to materialise and coffee’s slide continued.

Meanwhile, cotton prices have recorded steady declines. The “A” Index of the industry newsletter Cotton Outlook returned below 80 US cents/lb at the beginning of July and fell further during August. Depressed by expected improvements in US yields and weak demand, the softening market took Tanzanian values lower. Mwanza “AR” Type 3 cotton for October-November delivery was quoted by Cotton Outlook at 90 cents/lb at the end of May, declining to 82.5 cents/lb by mid-July and 80.5 cents/lb at the end of August.

Indices of export unit valuesa (1989-90=100) 1995 1996 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr May Coffee 185 176 153 127 124 133 Cotton 128 134 114 113 108 104 Tea 83 79 75 87 86 87 Tobacco 113 109 115 116 125 127 Gold 99 101 101 101 105 102 Combined indexb 148 145 128 117 114 117

a In dollar terms. b Average weighted according to 1989-90 export values.

Source: EIU, based on IMF, International Financial Statistics.

Japan eyes future trade Long-term foresight has characterised Japan’s economic success since the late 19th century, and the country is now preparing to dominate the African markets of the future. Japan emerged as the largest bilateral aid donor to Africa during the late 1980s and in May this year it was on Japan’s initiative that a conference on structural reform and policies for growth in Africa was held at the World Bank’s Paris offices. A Tokyo finance ministry official noted that Japanese income per head had risen from $120 to $23,000 in just two gener- ations (Tanzania’s is currently some $100), and declared himself optimistic about Africa’s future growth prospects.

At the end of June trade delegations from the EAC countries left for Japan as part of a trade and investment promotion exchange financed by the Japanese

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Tanzania 19

External Trade Organisation (Jetro). The visits form part of a wider effort to expose potential exporters to the peculiarities of a Japanese market which Tokyo insists is not closed, just particular in its tastes and requirements. Natu- rally, all parties have a common interest in expanded trade and investment flows. Of the three EAC partners, Tanzania is the leading exporter to Japan, based on its coffee trade (2nd quarter 1996, page 16). According to Jetro data, the country recorded a $43m trade deficit on its exchanges with Japan last year, compared with a Kenyan deficit of $239m.

East African Cooperation trade with Japan ($ m) 1992 1993 1994 1995 Tanzania Exports 32 41 49 65 Imports –109 –111 –82 –108 Balance –77 –70 –33 –43 Kenya Exports 22 20 25 31 Imports –175 –148 –182 –270 Balance –153 –128 –157 –239 Uganda Exports 4 3 4 11 Imports –31 –29 –46 –52 Balance –27 –26 –42 –41 Source: Japanese External Trade Organisation.

National trade data are published with long delays and are often internally inconsistent when they do appear. The EIU thus frequently resorts to the IMF’s collation of partners’ trade returns as a guide to the direction of Tanzanian trade. As reflected above (see Economic structure page), the Fund’s latest Direction of Trade Statistics Yearbook places Japan among the country’s principal trade partners. An estimated 7.2% of imports were sourced from Japan, which took some 8.2% of Tanzanian exports.

EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 20 Comoros

Political structure: Comoros

Official name: République fédérale islamique des Comores

Form of state: federal republic

Legal system: based on Code Napoléon and the 1992 constitution

National legislature: Assemblée fédérale, deputies from each of the 42 electoral wards are chosen by universal adult suffrage for a term of two years

Last elections: December 1993 (legislative); March 1996 (presidential)

Next elections: October 1996 (legislative); expected 2002 (presidential)

Head of state: president, elected by universal suffrage for a term of five years

State legislatures: each island has a directly elected council which decides all local issues; there is also a governor on each island, previously appointed by the president, but in future to be elected

National government: the president and cabinet; last reshuffle August 1996

Main political parties: Rassemblement pour la démocratie et le renouveau (RDR, the former presidential alliance); Front pour le redressement national (FRN); Union nationale pour la démocratie aux Comores (UNDC); Union démocratique pour la décentralisation (UDD); Chuma; Rachad; Udzima; Uwezo

Head of state Mohamed Taki Abdulkarim Prime minister Tadjidine Ben Saïd Massoundi (Udzima) Minister of state territorial & town planning, housing Soigri Salim Madi

Key ministers agriculture, livestock, fishing, forests & environment Saïd Ali Mohamed (Rachad) civil service Achiraf Saïd Hachim (UNDC) economy, finance & budget Omar Dahilou education, professional training, francophone affairs, culture, scientific research, youth & sport Mouzaoir Abdallah (Uwezo) foreign affairs, cooperation & external commerce Saïd Omar Saïd Ahmed (RDR) health, population & social affairs Ibrahim Halidi Abdérémane (UDD) industry, labour & mining research Madi Ahamada (UNDC) interior & information Saïd Mohamed Saïd Hassan (UNDC) justice & Islamic affairs Ali Ben Ali transport & tourism, posts & telecommunications Omar Tamou (Udzima)

Governor of the Central Bank Mohamed Halifa

Economic structure: Comoros

Latest available figures

Economic indicators 1991 1992 1993 1994 1995a GDP at market prices Cfr bn 68.3 69.1 70.2 79.5 86.3 Real GDP growth % 2.1 1.6 1.9 0.9 3.2 Consumer price inflationb % 0.8 –0.4 –0.4 31.0 4.8c Population ’000 560 580 610 630 647 Exports fob $ m 24.4 21.5 21.5 16.3 23.0 Imports fob $ m 49.3 58.2 49.4 44.0 58.0 Current account $ m –1.4 –14.3 2.8 –34.1 –28.7 Reserves excl gold $ m 29.2 27.1 33.0d n/a n/a Total external debt $ m 180 188 184 189 189 External debt-service ratio % 13.2 8.7 3.1 4.7 n/a Exchange rate (av) Cfr:$ 282.1 264.7 283.2 416.4 374.4c

August 30, 1996 Cfr380.0:$1

Origins of gross domestic product 1994 % of total Components of gross domestic product 1994 % of total Agriculture & fishing 36.9 Private consumption 74.4 Industry 11.3 Government consumption 21.1 Manufacturing 3.9 Gross domestic investment 21.3 Services 51.8 Exports of goods & non-factor services 17.8 GDP at market prices 100.0 Imports of goods & non-factor services –34.7 GDP at market prices 100.0

Principal exports 1994 $ m Principal imports 1994 $ m Vanilla 6.6 Rice 6.3 Ylang-ylang 2.2 Petroleum products 6.1 Cloves 1.2 Cement 4.0 Transport equipment 3.9

Main destinations of exports 1995e % of total Main origins of imports 1995e % of total France 54.5 France 60.1 Germany 18.2 South Africa 9.8 USA 18.2 Kenya 5.2 Singapore 3.9 a EIU estimates. b As measured by the GDP deflator. c Actual. d End-June. e Based on trading partners’ returns; subject to a wide margin of error.

Comoros

Outlook

Mr Taki faces a stiff test The next few months will be a crucial testing period for attempts by Comoros’ over governmental unity new head of state, Mohamed Taki Abdulkarim, to weld together a unified ruling party. Already, the resistance of the finance and justice ministers in his first government to his bridge-building initiatives has highlighted the personal ambitions and traditional clan loyalties that will have to be overcome if Mr Taki is to bring all his supporters under a single banner. His personal support, concentrated in the Union nationale pour la démocratie aux Comores (UNDC), is too slender a base to sustain a durable government majority; but it will not be easy to persuade other groups, which are backing the government for now, to submerge their identities in a larger grouping, especially one that is based on a top-down personal leadership initiative rather than grass-roots pressure or wider ideological belief. During the presidency of Saïd Mohamed Djohar, which effectively ended in the mercenary putsch of September 1995, progress on practical economic and development issues was impeded by con- stant shifts of party allegiance. Mr Taki does not want to suffer the same undig- nified fate, but may find it hard to avoid.

The restoration of One of the first priorities for Mr Taki must be the reconstruction of his international credibility country’s battered international image. This is not just a matter of public is vital relations. Under Mr Taki’s weak and erratic predecessor, Mr Djohar, Comoros was regarded by other governments and international development agencies as a chronically incompetent and unreliable partner, marred not only by the corruption and cronyism common to many developing-country governments, but also by a lack of commitment to the most basic notions of development and consistent economic policy. Frequent changes of prime minister, and Mr Djohar’s readiness to be influenced by his son-in-law (and president of the Assemblée nationale), Mohamed Saïd Mchangama, had reduced Comoros almost to the status of a joke government in the eyes of aid donors. If he is to restore the country’s international credibility, Mr Taki needs to show donors he is firmly in charge, is realistic and is capable of planning and carrying through a rational economic programme.

Air France will have a There is hope for an improvement in Comoros’ air transport links following rival on the Moroni the positive response from the French travel group Nouvelles frontières to an route— approach from Mr Taki. In mid-August the chairman of Nouvelles frontières, Jacques Maillot, announced that Corsair, his group’s airline subsidiary, would launch a service to Moroni (Comoros’ capital) before the end of the year. This will provide the first serious competition to Air France, whose Paris-Moroni flights have enjoyed an effective monopoly of traffic from Europe.

—bringing benefits for Nouvelles frontières has a strong position in the French market as a provider of tourism and exporters— package tours. Corsair already flies to Dakar and Abidjan, and is planning flights to Madagascar; it should exert competitive pressure on Air France and force down prices on the Moroni route. This could enhance Comoros’ attrac- tion for European tourists. Moreover, cheaper rates for air freight could open up new possibilities for the export of fresh fruit, vegetables or seafood to Europe. Seafood has become a valuable foreign exchange earner for a number of African countries. Mr Maillot also revealed that Mr Taki had asked him to help develop a new Comorian national airline to replace the defunct Air Comores, which used to operate domestic and regional routes. In June the two aircraft owned by Belarus-based Belavia, which had been operating local services under the brand name Amicale Comores Air, were grounded on the orders of the government’s new director-general of civil aviation, Abouhar Bourhane. He claimed they were frequently overloaded, and lacked insurance cover and certification that technical checks had been carried out. The poor safety standards prevailing on inter-island transport links were highlighted on the night of July 27-28, when a wooden boat carrying 69 passengers sank off Mohéli.

—as the sector receives The UN Development Programme (UNDP) is paying for a consultant to advise international attention the transport minister, Omar Tamou, on the reform of air transport. There are suggestions that a new company, Com’Air services aéroportuaires, should be set up to provide airport ground services. According to the Paris-based Indian Ocean Newsletter, a separate joint-venture company, Com’Air transport aérien, would be formed as the basis for a new national airline to operate domestic and regional flights. The government would have only a 30% stake in the operation, with local private investors holding 20%; interested foreign companies such as Nouvelle Frontières, Air France and Sun International (which runs the Galawa resort hotel) would be invited to share the balance. But foreign investors will want to be sure of having effective management control, to secure the operation against local pressures to run up payment obligations.

Gross domestic product Real exchange rates (b) % change, year on year 1990=100 3.5 210 Comoros 200 3.0 Cfr:$ Africa 190 180 2.5 170 2.0 160 150 1.5 140 130 1.0 120 R:$ 110 0.5 100 0.0 90 KSh:$ 1991 92 93 94 95(a) 80 (a) Estimates. (b) Nominal exchange rates adjusted for changes in relative consumer prices. Sources: EIU; IMF, World Economic Outlook. 1990 91 92 93 94 95

Review

The political scene

Mr Taki cements his Comoros’ new president, Mohamed Taki Abdulkarim, spent much of June on diplomatic alliances— an extended diplomatic initiative, cementing links with key international partners. One modest sign of increased international credibility came in June when China appointed its first ambassador to Comoros permanently based in Moroni. (In the past China has limited itself to supplying aid for health, water supply, security and official buildings.) Mr Taki made his first appearance as a head of state at the Arab League summit in Cairo in late June; he also visited Gabon for talks with the president, Omar Bongo, who is a convert to Islam and who played a key role in discreetly reconciling Mr Taki and a cautious French administration earlier this year (2nd quarter 1996, page 29). Mr Bongo has introduced Mr Taki to several of his valued French security advisers; the Comorian president has reportedly recruited one of these, René Dulac, who is thought to have worked not only for Mr Bongo and the former Chadian leader Hissène Habré, but also for the mercenary Bob Denard, who has staged several putsches in Comoros (see below).

—secures French aid Mr Taki paid a private visit to France itself on June 17, where the francophone commitments— affairs minister, Margie Sudre, a native of Réunion, met him at the airport (an honour reportedly never accorded to Saïd Mohamed Djohar, his predecessor). The French cooperation minister, Jacques Godfrain, spent three days in Comoros in May, even visiting the smallest island, Mohéli, while assessing the situation before France took a final decision on whether to agree to Mr Taki’s request for a permanent garrison of French troops in Comoros. The defence issue and the contentious question of Comoros’ claim on French-ruled Mayotte were raised by Mr Taki when he called on the French president, Jacques Chirac, on June 19. A few days later, on June 27, Mr Taki met a delegation from the Mouvement populaire mahorais, the main political party on Mayotte, which wants to keep the island under French rule. Mr Taki left France on June 20 to attend the Arab summit in Cairo. Shortly before the Comorian president arrived in France, his then finance minister, Prince Saïd Ali Kemal, and his transport minister, Omar Tamou, had visited Marseilles, to meet French business groups interested in Comoros.

Mr Taki’s new ambassador to France is the former minister Saïd Hassan Saïd Hachim, who was a first-round candidate in the presidential election and supported Mr Taki in the second round.

—replaces the armed Before flying to France, Mr Taki replaced the commanding officer of the Force forces commander— comorienne de défense, Assoumane Azzali, on June 4. The new military chief is Colonel Abdoulhamid Abdourazak, a 55-year-old former head of the gendarmerie who rose through the ranks. Mr Azzali had opposed suggestions that former soldiers who had supported the 1992 army mutiny and had been supporters of the Union nationale pour la démocratie aux Comores (UNDC), Mr Taki’s party, or Udzima (the party of the transport minister, Mr Tamou) should be reintegrated into the armed services. Colonel Abdourazak, on the

other hand, was a candidate in the first round of the presidential election, and supported Mr Taki in the second round. Mr Azzali, meanwhile, has been sent on a training course at the Ecole militaire in France.

—and imposes Mr Taki, who is known to hold strong religious views, has set a conservative conservative Islamic rules Islamic tone in recent months. Returning from a private visit to Egypt in May, on dress and alcohol he made a major speech outlining planned administrative reforms (see The economy), but he also spoke of moral issues, condemning drug-taking and criticising girls and women who wear miniskirts and dresses. Then on June 30, returning from his visit to Gabon, France and the Arab summit, he announced a ban on alcoholic drinks. He declared that only diplomatic missions and hotels would be allowed to import alcohol, and that hotels would only be allowed to sell it to foreigners. These new rules are unlikely to have much impact on the tourism industry: visitors are mainly catered for at hotels, such as the Galawa resort complex on Grande Comore, rather than at restaurants or cafes. Among local people, the new rules are likely to meet with little complaint, as deeply traditional Islamic religious attitudes still prevail—although women commonly hold government jobs and the legal system is not based on the sharia (Islamic law).

Mr Denard is released Bob Denard, the French mercenary who staged last year’s shortlived putsch and from jail, but still faces had once been the strongman behind the regime of Ahmed Abdallah, until the trial— president was shot in still-unexplained circumstances in 1989, was released from the La Santé prison in Paris on July 23. He was released, together with his two lieutenants, Dominique Malacrino and Jean-Paul Guerrier, on the orders of the Paris appeal court. The investigating magistrate looking into Mr Denard’s affairs had turned down an initial release request on July 9. Mr Denard had been held since last October, after surrendering to French troops who had intervened to halt the mercenary takeover (4th quarter 1995, pages 29-31). A Comorian group in France, SOS-démocratie, protested over the release. How- ever, Mr Denard is likely to be put on trial within the next few months, in connection with the coup and with the shooting of Mr Abdallah (at which he seems to have been present).

—and says he will not The French authorities seem persuaded that Mr Denard will not be tempted to return to Comoros repeat last year’s breach of his bail terms, when he slipped away from a quiet retirement in the Bordeaux area only to turn up shortly afterwards in Moroni with his band of fighters. On release from La Santé, Mr Denard said he would not be returning to Comoros; sceptics will take some convincing that he really has given up his life of violent foreign adventure. However, Comoros does have a small permanent garrison of French troops, and a fresh mercenary landing would face a professional, and forceful, response.

France prepares the In early August a six-member French military mission visited Comoros. ground for a permanent Mr Taki had earlier indicated his hopes for a permanent French defence pres- garrison ence to guard against further mercenary adventures, and Paris seemed prepared to respond positively (2nd quarter 1996, page 31). The first team was followed by a unit of 30 troops on August 13, who were to make preparations for a larger unit to follow.

Cabinet meetings are Faced with the united opposition alliance, the Front pour le redressement suspended amid reshuffle national (FRN), led by his erstwhile presidential rival Abbas Djoussouf, Mr Taki rumours— has decided to strengthen his own base of support by welding together the diverse forces that supported him in the second round of the presidential election. On August 3, in a speech at the presidential palace, he told the leaders of these parties that he wanted them to join a commission to prepare an agreed policy programme and structure. Mr Taki argued forcefully in favour of the dissolution of the several small parties represented at the meeting, in favour of a larger, more broad-based organisation. Comorian politics have exhibited a chronic level of factional quarrelling over the past few years.

—as unification plans are The FRN has so far proved a surprisingly cohesive force, in spite of the potential undermined by personal for rivalry among its member groups. Meanwhile, Mr Taki’s own attempt to ambitions build a durable alternative alliance has few ideological barriers to overcome: most Comorian parties are non-ideological personal support groups for traditional clan leaders. But personal loyalties may jeopardise the project; Mr Taki has to persuade his former rivals for the presidency to surrender their own long-term ambitions and join a single group which would probably be dedi- cated to ensuring his own success and re-election. On August 14 Mr Taki suspended the regular weekly meetings of the council of ministers, in preparation for a reshuffle of the government to reflect the membership of his planned new grouping. But within days reports circulated that the then finance minister, Prince Kemal, and the then justice minister, Mohamed Abdul Wahab, were refusing to bring their supporters into the new group. Prince Kemal had already been irritated by Mr Taki’s decision to give effective control of customs, tax and Treasury services to a junior budget minister, Omar Dahilou, a member of the president’s own party. Meanwhile, Mr Tamou had also seen his powers undermined, by the appointment of a junior minister, Soifa Saïd Bourhane. The unity proposal secured the support of ministers heading some small parties: Mouzaoir Abdallah (Uwezo), Saïd Hassan Saïd Hachim (Rachad) and Ibrahim Halidi (once one of Mr Djohar’s more successful premiers and now the leader of the Union démocratique pour la décentralisation). And after some internal debate, Udzima also backed the unification plan and agreed to join the committees set up to prepare for the new party.

A new government is On August 21 Mr Taki issued a decree ordering a reshuffle. Most of the cabinet named remained in their existing posts, but Prince Kemal paid the price for refusing to merge his Chuma movement into the planned new government party. As rumoured, he was replaced as finance minister by his former deputy, Omar Dahilou. The other departure was Mohamed Abdul Wahab; he had been regarded as the cabinet representative of the new armed forces chief, Colonel Abdourazak, who had also refused to join the new single party. The new minister for justice, Ali Ben Ali, formerly the junior civil service minister, has also been given responsibility for domestic Islamic affairs; he will therefore be responsible for applying the new restrictions on alcohol and dress. The combina- tion of justice and Islamic affairs in a single portfolio could also be a hint that the religiously conservative Mr Taki would like to introduce some aspects of sharia law (see above). On August 23, speaking on state radio, he said the

gendarmerie would apply the “Lex talionis” to those arrested for crimes of violence. He said this would mean “a broken leg for a broken leg, for example”.

The new civil service minister is Achiraf Saïd Hachim, a UNDC politician and former close aide to Mr Taki who appears to be returning to favour. He will have the difficult task of pushing through the controversial reform of the public service. Junior ministers have been given some important responsi- bilities: the technocrat Ms Bourhane has moved to the number-two post at finance and budget; at foreign affairs, Mohamed Saïd Bacar will have special responsibility for cooperation (relations with aid donors), foreign trade and relations with the Arab League and Islamic states; and at the interior ministry, Assoumani Youssouf Mondaha will handle information and the individual island governorates, which leaves him with the awkward task of placating autonomist sentiment in Mohéli, where support for the opposition is particularly strong.

Health and social issues

Investment is planned for France is providing a FFr6.5m ($1.3m) cooperation ministry (FAC) grant for the education Comorian education system, as part of the aid package agreed at the time of Mr Taki’s visit to Paris. Although 87% of Comorian children enrol in primary school, a high figure compared with much of sub-Saharan Africa, the quality of education that they receive leaves much to be desired, and the curriculum is ill-suited to the needs of the local economy. The low level of spending and the pay arrears endured by teachers have depressed morale in the state system; better-off families often send their children to private schools, of which there are now 78 compared with 311 state schools. Overall, 86% of the 97,801 pupils (in July 1996) are educated in the public sector, although the proportion of pupils educated privately rises from only 7% at primary level to 43% in the first stage of secondary education, showing a huge lack of public confidence in the state system. At the second (lycée) stage of secondary schooling, the state- educated proportion falls back to 29%. France and the World Bank have already been supporting reforms: the country’s 3,000 education staff have been reorganised and two institutes have been set up to train primary-school teachers. The new education credit will be used to support further improvements in teacher training, in literacy in French and on technical and vocational education.

The economy

Mr Taki targets salary On his first, private, visit to Paris since his election as president, Mohamed Taki arrears and reviews the Abdulkarim told journalists that paying off the seven- to nine-month salary civil service arrears owed to civil servants was his “priority of priorities”. Mr Taki claimed that France had agreed a FFr20m ($3.96m) emergency budget package to help with salaries; however, the French seem to have told him that they could not finance the clearing of all arrears. After returning home, Mr Taki told the paymaster-general, Ali Boina, to start clearing only the salary payments due for April, May and June this year. Action on the older arrears (of up to six months) seems to have been shelved for now, a move which has angered the trade

unions. A team from the IMF visited Comoros in May, to assess the prospects for agreement on a new economic programme and Enhanced Structural Adjust- ment Facility (ESAF) package. Meanwhile, Mr Taki is reported to have ap- proached the accountancy firm Coopers & Lybrand, which has a strong presence in East Africa, to ask it to prepare an assessment of the economic situation so that the government can draft economic plans. The president is also planning reviews of civil service staff numbers, ministerial budgets and official housing, vehicles and other property.

Cotecna inspections are In late June local courts in Moroni issued an injunction ordering an end to the suspended after traders import checks being carried out on the government’s behalf by the Swiss- “strike”— owned international inspection agency Cotecna. For three weeks traders had refused to clear their inbound consignments and take them away, in protest at the Cotecna checks, which they claimed were causing delays. However, Cotecna insisted consignments could be processed quickly if the traders sup- plied the correct documentation. For many years traders have been used to a lax enforcement of import controls and collection of customs duties. They deeply resent the efforts to tighten these up, which began under the last government headed by Mohammed Caabi el Yachroutu and was continued by Prince Saïd Ali Kemal, the first finance minister under Mr Taki. The import- export business in Comoros has always been of crucial political significance in an island country that is heavily reliant on supplies brought in from abroad. The regime of Ahmed Abdallah had close ties with some of the major traders and even under his successor, Saïd Mohamed Djohar, they remained highly influential. Collection of customs revenue has been particularly open to influ- ence and corruption. This has been an issue of concern to donors for some time.

—but Prince Kemal fights Prince Kemal later issued an official request for the court ruling against Cotecna back to be lifted and ordered customs agents not to allow any goods to be cleared unless they were subject to Cotecna control. Claims by traders that Cotecna is not doing its job properly will not be accepted by donors, who have seen the company operate successfully for years in many other difficult African countries, including Nigeria and, more recently, Chad. In any case, the traders may carry less political weight than they used to: with state salaries far in arrears, the government is under strong pressure to mobilise as much revenue as possible in order to pay disgruntled public-sector employees. In the longer term the government may come under pressure to improve the efficiency of the entire port operations in Comoros. In July the South African shipping service Unidel suspended calls at Moroni and Mutsamudu because the charges levied by these two Comorian ports were far higher than at the other destinations the line serves.

Arrests are made over After his election as president, Mr Taki set up committees of dignitaries to look corruption allegations into economic issues and the management of public finances (2nd quarter 1996, page 31). As a result of these investigations, four people were arrested and placed under guard in prison in Moroni on August 18, on charges of embez- zling state funds during the presidency of Mr Djohar. There have often been suggestions that the import-export trade in Comoros is both corrupt and

politically influential, in spite of government efforts to liberalise it and to allow new competitors to develop. Officials said there would be more arrests.

Competitive bidding Mr Taki has reportedly decided on a fresh open competitive bidding round for continues for utilities the contract to operate the power and water parastatal, Eau et électricité des contracts Comores, on a concession basis. The French consultant Castalia had already been appointed to assess the company and had come up with a shortlist of four candidates, three of them French; but it seems a wider range of candidates will be sought. Urgent action is needed: the power and water system is thought to need repairs worth FFr100m ($19.8m). Power cuts are increasingly frequent; the situation is particularly bad on Anjouan island.

Meanwhile, the Indian Ocean Newsletter has reported that the Paris-based telecommunications company Geolink has offered to set up a satellite telephone network, with card-operated payphones and international lines. The company also has security expertise and it has apparently sold private satellite phone systems to Zaire’s president, Mobutu Sese Seko, and to the leader of the Angolan opposition União Nacional para a Independência Total de Angola, Jonas Savimbi.

Comoros accepts Article On July 29 the IMF announced that Comoros had accepted the obligations of VIII obligations Article VIII of the Fund’s articles of agreement. This means that the government has officially forsworn the right to impose exchange controls on all current and some capital transactions. This will make little practical difference to business or to the conduct of general economic policy, as arrangements between the French Treasury and Comoros in support of the Comorian franc already guarantee freedom for all current transactions that are shown by documentation to be related to normal trade payments and business operations (such as the transfer of dividends). However, acceptance of Article VIII is a useful step towards rebuilding the confidence of foreign banks and companies, and a sign of Comoros’ readiness to remain part of the world community in financial terms.

Appendix 1

Quarterly indicators of economic activity in Tanzania

1994 1995 1996 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Production Annual totals Coffee ’000 tons ( 34 ) ( 40 ) ( n/a ) Cotton, lint “ ( 53a ) ( 91a ) ( n/a ) Sisal ” ( 30a ) ( 30a ) ( n/a ) Prices Monthly av Consumer prices: 1990=100 240.9 259.4 263.5 289.9 324.4 329.4 335.7 353.0 406.6 409.3b change year on year % 32.6 30.3 36.3 37.0 34.7 27.0 27.4 21.8 25.3 n/a Money End-Qtr M1 TSh bn 259.92 286.91 300.80 361.52 342.93 n/a n/a n/a n/a n/a change year on year % 23.1 25.6 28.2 32.6 31.9 n/a n/a n/a n/a n/a Foreign trade Qtrly totals Exports fob TSh m 60,070 75,578 36,097 93,431 104,849 85,158 64,606 135,765 102,434 61,723c Imports cif “ 217,873 190,409 142,822 214,653 176,062 287,742 252,133 252,974 204,887 110,134c Exchange holdings End-Qtr Bank of Tanzania: foreign exchange $ m 277.7 290.0 323.9 317.5 263.7 239.2 220.8 255.3 211.6 199.7d Exchange rate Market rate TSh:$ 494.41 519.49 525.15 523.45 544.54 602.91 613.80 550.36 542.02 620.19

Note. Annual figures of most of the series shown above will be found in the Country Profile. a Estimate. b Average for April-May. c Total for April-May. d End-May.

Appendix 2

Quarterly indicators of economic activity in Comoros

1991 1992 1993 1994 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr Money End-Qtr M1, seasonally adj: Cfr m 9,532 9,799 10,014 9,922 10,439 10,789 9,364 n/a n/a n/a change year on year % –9.0 7.8 4.7 –2.6 9.5 10.1 –6.5 n/a n/a n/a Foreign tradea Annual totals Exports fob $ m 28 ( 27 ) ( 54 ) 56b Imports cif “ 119 ( 105 ) ( 107 ) 115c Foreign exchange End-Qtr Central Bank $ m 29.15 25.44 26.21 31.08 26.38 29.23 32.20 n/a n/a n/a Exchange rate Market rate Cfr:$ 259.00 278.38 256.63 238.25 275.33 273.95 284.75 283.15 294.77 428.25d

Note. Annual figures of most of the series shown above will be found in the Country Profile. a Source: DOTS. b Total for 1995, $11m. c Total for 1995, $153m. d End -2 Qtr 1994, 410.36; end-3 Qtr 1994, 396.11; end-4 Qtr 1994, 400.95; end-1 Qtr 1995, 363.68; end-2 Qtr 1995, 363.98; end-3 Qtr 1995, 368.59; end-4 Qtr 1995, 367.50; end-1 Qtr 1996, 377.36; end-2 Qtr 1996, 386.44.

Appendix 3

Foreign trade of Tanzania TSh m Jan-Dec Jan-Dec Jan-Dec Jan-Jun Jan-Jun 1992 1993 1994 1994 1995 Imports cif Food & beverages 14,838 38,566 64,753 41,068 1,729 Fuels 45,217 69,607 75,771 37,976 59,662 Textiles & clothing 102,124 88,966 118,058 60,286 64,820 Metals 34,684 45,327 54,620 31,024 14,041 Machinery 61,245 114,568 155,399 102,180 73,070 Transport equipment 101,188 103,426 122,589 79,082 46,985 of which: cars 69,004 70,329 83,361 53,776 31,949 Total incl others 449,480 615,990 765,757 412,282 348,285 Domestic exports fob Cashew nuts 6,487 9,133 26,507 8,325 14,231 Coffee 17,301 39,428 58,765 30,789 37,831 Cloves 1,569 1,866 0 0 0 Cotton, raw 28,367 31,697 53,425 31,231 20,014 Sisal 391 1,441 2,643 1,165 1,462 Minerals 12,920 28,074 15,390 5,411 5,167 Petroleum products 2,487 5,632 2,791 1,945 3,349 Manufactured goods 18,439 21,625 39,162 25,110 18,013 Total incl others 123,966 181,474 265,177 135,648 124,309

$ m $ m Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports foba 1992 1993 1994 1995 Imports cifa 1992 1993 1994 1995 Germany 47 48 50 66 UK 152 180 139 160 India 34 40 53 58 Kenya 49 103 122 150 Japan 30 37 45 49 Japan 120 123 90 119 Belgium-Luxembourg 34 34 40 47 Saudi Arabia 131 131 93 104 UK 34 35 31 39 China 119 38 72 82 Rwanda 21 25 30 36 India 82 69 76 78 Netherlands 20 21 25 36 South Africa n/a 20 57 70 Portugal 22 22 22 27 Italy 74 60 66 62 Total incl others 472 494 550 719 Total incl others 1,512 1,421 1,438 1,659 a Derived.

Appendix 4

UK trade with Tanzania (£ ’000) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-May Jan-May 1992 1993 1994 1995 1995 1996 Exports fob Food, drink & tobacco 1,373 2,444 1,458 2,377 629 835 Textile fibres & waste 4,568 6,217 6,150 6,870 2,656 3,069 Petroleum & products 273 516 255 77 14 24 Chemicals 9,534 8,899 8,277 8,792 3,444 3,808 Rubber manufactures 1,066 774 651 844 184 293 Paper & manufactures 1,562 1,064 979 1,170 663 249 Textile yarn, cloth & manufactures 434 639 441 522 229 239 Non-metallic mineral manufactures 771 1,410 804 986 255 390 Iron & steel 1,259 2,241 2,340 1,608 225 703 Non-ferrous metals 803 471 299 405 105 47 Metal manufactures 3,881 3,788 3,351 2,139 949 1,085 Machinery incl electric 28,801 34,709 28,837 28,562 11,366 9,480 Road vehicles 12,294 21,121 14,310 20,209 7,940 10,682 Other transport equipment 910 13,887 1,033 2,192 1,467 531 Clothing 593 418 383 969 152 315 Scientific instruments etc 3,484 2,233 2,504 2,566 645 1,505 Total incl others 78,545 108,943 82,312 87,412 33,802 35,478 Imports cif Sugar & products 4,095 4,624 4,458 4,846 4,422 5,554 Coffee, tea & spices 5,652 5,781 3,652 3,475 1,022 1,596 Tobacco & manufactures 2,473 2,714 1,270 4,131 2,483 2,347 Textile fibres & waste 1,322 1,211 1,340 1,502 813 891 Textile yarn cloth & manufactures 1,732 1,946 1,518 926 521 278 Non-ferrous metals 1,488 313 1,199 1,486 377 0 Machinery & transport equipment 739 3,317 1,350 4,519 1,195 531 Clothing 2,046 3,896 5,390 4,222 1,021 2,047 Total incl others 21,140 25,633 22,452 27,480 12,652 13,968

Appendix 5

Foreign trade of Comoros ($ m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports foba 1990 1991 1992 1993 Imports cifa 1990 1991 Cloves 1.33 3.87 0.41 1.08 Meat & preparations 2.03 4.47 Vanilla 9.39 15.89 15.59 19.42 Rice 8.33 7.18 Essential oils 6.33 3.68 4.35 3.34 Petroleum products 6.13 6.24 Total incl others 17.96 24.91 22.14 25.06 Cement 3.56 3.27 Iron & steel 1.11 1.72 Road vehicles 3.87 5.75 Total incl others 52.02 58.25

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports fobb 1992 1993 1994 1995 Imports cifb 1992 1993 1994 1995 Colombia n/a 32 38 n/a France 65 61 66 92 France 11 10 8 6 South Africa n/a 12 12 15 USA 10 9 6 2 Kenya 5 6 7 8 Germany 3 2 1 2 Singapore 5 5 5 6 Malaysia 2 n/a n/a n/a Belgium-Luxembourg 3 4 4 5 Total incl others 27 54 56 11 Total incl others 105 107 115 153 a Source: UN. b Source: DOTS, derived.

Appendix 6

French trade with Comoros ($ ’000) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec 1990 1991 1992 1993 1994 Exports fob Cereals & preparations 837 1,292 841 815 937 Chemicals 4,903 5,342 5,831 7,250 7,670 Rubber & manufactures 480 609 550 502 449 Textile yarn, cloth & manufactures 934 1,186 772 726 399 Iron & steel 1,407 1,630 1,705 1,098 1,262 Metal manufactures 2,574 3,142 3,215 3,462 3,330 Machinery incl electric 14,071 14,371 16,990 15,263 14,393 Transport equipment 10,247 12,421 11,284 8,896 8,593 Scientific instruments etc 1,526 1,478 1,476 1,905 1,766 Total incl others 48,756 56,973 59,282 57,991 59,924 Imports cif Coffee, tea, cocoa, spices 3,934 6,785 5,231 6,417 2,790 Chemicals 9,845 7,054 6,913 5,042 5,664 Total incl others 13,865 14,253 12,304 11,523 8,704