Originally published in World Economic Forum Agenda.
- Comoros became the 165th member of the World Trade Organization (WTO) last year after the island nation approved the protocol for its accession on 26 February 2024.
- Along with its strategic location in the Indian Ocean and access to the African Continental Free Trade Area (AfCFTA), Comoros’ WTO membership is already helping it to advance its economy.
- The island nation has five key development areas: tourism, the blue economy, financial and logistics services, agriculture and niche industries such as natural cosmetics and seafood products.
Membership in the World Trade Organization (WTO) provides a significant opportunity for the world’s least developed countries (LDCs) to advance their economic growth.
Cambodia is a perfect illustration of this. The rise in market access and political stability that followed Cambodia's accession to the WTO in 2004 sent positive signals to foreign investors, enabling foreign direct investment inflows into the country to rise from $130 million in 2004 to $3.58 billion in 2022. Similarly, its merchandise exports have grown significantly from $2.8 billion in 2004 to $22.47 billion in 2022.
Although there are differences in economic structure, geography and population size to navigate, Comoros – an archipelago of three islands off the coast of East Africa – can draw inspiration from Cambodia's remarkable progress. This island nation in the Indian Ocean became the WTO's 165th member in August 2024 after 17 years of negotiations.
Comoros’ vision for its future as a WTO member has been built around five key pillars outlined in its Emerging Comoros Plan 2030:
1. Modernizing agriculture
The country is the largest producer of ylang-ylang, the seventh largest producer of vanilla and the fifth largest producer of cloves in the world. These three commodities accounted for 47% of the country's merchandise exports in 2021. To help the islands take advantage of these assets, the World Trade Organization's Enhanced Integrated Framework (EIF) has supported productive capacity and value addition in these sectors. This has resulted in increased exports of all the commodities, although COVID-19 caused some trade declines.
By leveraging WTO agreements, such as the Agreement on the Application of Sanitary and Phytosanitary Measures and the Agreement on Trade Facilitation (TFA), Comoros can attract investments to develop supply chain infrastructure for these commodities, including cold storage and transport networks. This will boost output, create rural jobs, raise incomes and enhance access to international markets. Modernized practices can position Comoros as a competitive player in global trade, fostering economic resilience and food security.
2. Creating a more attractive tourism sector
The Comoros’ stunning landscapes and rich cultural heritage provide significant untapped tourism potential. Implementing WTO membership and the African Continental Free Trade Area (AfCFTA) could help lower import costs, standardize services, and attract foreign investment. Recognizing this, the EIF has supported eco-tourism development on two Comoros islands, Ngazidja and Mohéli, in partnership with the Aid for Trade Initiative for the Arab States, which is funded by the International Islamic Trade Finance Corporation.
This initiative helps young people earn an income through recycling, cultivation of medicinal plants, and waste management, preserving the islands' ecology. Promoting cultural heritage handicrafts through trade networks could also create economic opportunities while preserving traditions. A similar EIF‑supported model in Uganda has successfully diversified tourism exports and increased producers' incomes.
3. Building the blue economy
The blue economy is central to Comoros' development aspirations. The islands have vast marine resources, including fishing, aquaculture, maritime ports and transport, tourism, renewable energies and marine biotechnology capabilities. When the WTO's Agreement on Fisheries Subsidies comes into force, Comoros can enhance its position in global fish and seafood markets through improved market access and compliance with international sustainability standards.
Moreover, by tapping into the potential of the ecotourism sector and effectively implementing the Regenerative Seascapes for People, Climate and Nature Project, Comoros could achieve long-term economic resilience, ecological preservation, and a stronger foothold in the blue economy.
4. Strengthening financial and logistics services
Comoros is strategically located on the sea route between Africa and Asia, making it a natural logistics hub in the Indian Ocean. By attracting foreign investment in port, transport, and financial infrastructure and fostering digital payment systems, mobile banking, and inclusive banking services for women and micro-, small-, and medium-sized enterprises, the islands could strengthen their logistics sector. This would help modernise their ports and enhance global shipping networks.
WTO membership allows Comoros to participate in trade-related technical assistance programmes to improve customs efficiency and reduce trade costs. This would position the islands as a competitive hub in the region. Ongoing support from the WTO TFA Facility is already a step in the right direction.
5. Developing niche industries
WTO membership opens doors to improved market access for all kinds of industries. For Comoros, this provides opportunities to diversify its export market by strengthening industries such as seafood products, essential oils and natural cosmetics.
The EIF offers a valuable model for industrialization support. It has already helped Biozen, a pioneering company that turns aromatic and medicinal plants into natural cosmetics. EIF support has enabled Biozen to strengthen its production chain by improving its transformation and distillation processes. The company has also improved its product packaging and obtained essential certifications to access international markets.
Boosting investment in Comoros
Achieving these five pillars of development means addressing certain challenges, however.
Comoros faces an electricity shortfall due to poor maintenance, leaving several of its generating units inoperable. To reduce its reliance on imported petroleum products and lower carbon emissions, the African Development Bank (AfDB) is planning to provide a $26.6 million grant for the first phase of Comoros’ Karthala geothermal project. The bank will also support two solar projects supported by France that will require additional support to help with grid connectivity.
Digital transformation also remains an area of untapped potential for Comoros. Digital availability, accessibility, affordability and application remain low. Fortunately, the AfDB is supporting a $10.4 million Digital Public Infrastructure Project to improve governance, affordability and access to public services. It will also establish a digital government system and create an incubator for digital innovation and entrepreneurship under a public-private partnership model.
Comoros has one of Sub-Saharan Africa's lowest tax-to-GDP ratios, at 3.69%, which means it does not generate enough revenue to meet its needs. Its graduation from LDC status may also reduce the nation's access to official development assistance. Therefore, Comoros must intensify efforts to attract private investment. The investment promotion body, Agence Nationale pour la Promotion des Investissements, has already made some progress. But a whole-of-government approach could boost investment across the five pillars of Comoros’ Emerging Plan, as well as in the islands’ energy and digital sectors.
WTO membership undoubtedly offers transformative opportunities for trade, investment and growth. If Comoros is to take full advantage of this opportunity, substantial investments will be critical to helping the island nation overcome its current challenges and achieve its development goals.
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