To qualify for debt relief under the HIPC Initiative at the decision point, Comoros will need to demonstrate satisfactory performance under the government's economic program by completing the first review under the current IMF Extended Credit Facility (ECF) arrangement, and reach understandings on appropriate completion point triggers.

In addition to the standard requirements on implementation of the country's poverty reduction strategy paper (PRSP) and macroeconomic stability, possible completion point triggers include policy measures aimed at improving public financial management and governance; strengthening health and education social sectors; supporting growth; and improving debt management.

On reaching the completion point under the HIPC initiative, Comoros would qualify for unconditional debt relief under the HIPC Initiative. It would also qualify for the Multilateral Debt Relief Initiative (MDRI) from the IDA and the African Development Fund (AfDF). Debt relief would free up resources for poverty-reducing spending in the authorities' priority areas, notably education and health.

Following the IMF Executive Board discussion on March 29, 2010, Mr. Naoyuki Shinohara, IMF Deputy Managing Director and Acting Chair, said:

“The Union of the Comoros is potentially eligible for debt relief under the Enhanced HIPC Initiative and could reach the decision point under the Initiative in mid-2010. Achieving this milestone is subject to satisfactory completion of the first review under the ECF and agreement by the authorities on appropriate completion point triggers to be included in the decision point document.

“In the last year, the government has made encouraging efforts in implementing economic reforms with IMF support under the Emergency Post-Conflict Assistance and ECF. In September 2009, the authorities adopted their first full Poverty Reduction Strategy Paper. Going forward, they are encouraged to strengthen fiscal performance, particularly by improving revenue mobilization and enhancing control over the wage bill. Efforts will also be needed in the period ahead to enhance the effectiveness of the PRSP, notably by focusing on key projects and reforms, consistent with implementation capacity and mobilized financial resources.”

Following the IDA Executive Board discussion on April 8, 2010, World Bank Country Director for Comoros, Johannes Zutt, said:

“The need for debt relief in Comoros is particularly salient, because the resources available to support the most basic public investments in physical and human capital have been constrained. We are encouraged by the government's economic reform efforts and look forward to continuing working with the country so that the people of Comoros can benefit from debt relief.”