Comoros Emergency DPO for Covid-19 response

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The US10 million dollars Comoros COVID-19 Response Emergency Development Policy Financing (DPF is a stand-alone single-tranche operation. It supports relief measures and structural reforms adopted to alleviate the short-term effects of pandemics and enable economic recovery. Government’s immediate relief response to the Coronavirus Disease 2019 (COVID -19) pandemic consists of: (i) measures to protect lives and household incomes and enable the survival of otherwise viable firms and jobs; and (ii) reforms that will enhance Comoros’ growth prospects and the country’s resilience to future shocks. The DPF will also help the Government meet emerging fiscal and external financing gaps resulting from the pandemic, as the country experiences lower remittance inflows, a reduction in export earnings (mainly from tourism), larger public expenditures and lower fiscal revenues. The operation seeks to strike a balance between the immediate needs generated by the COVID-19 crisis and the medium-term structural reforms necessary to restore growth. Keeping a focus on structural reforms is important to foster economic transformation and job creation. The operation, which addresses financial, fiscal and external gaps created by the pandemic, is carefully sized to complement the financial support provided by the International Monetary Fund (IMF), other multilateral banks and bilateral donors. Participation in the Debt Service Suspension Initiative (DSSI), in turn, should strengthen the country’s fiscal performance, improve debt sustainability and enhance transparency.