News Brief: IMF Executive Board Completes Central African Republic
July 2, 1999
Alassane D. Ouattara, Deputy Managing Director of the International Monetary Fund (IMF), made the following statement: "The Executive Board of the IMF today assessed progress under the Central African Republic's economic and financial program supported by the Enhanced Structural Adjustment Facility (ESAF), and completed the midterm review under the first annual ESAF arrangement. As a result, an additional SDR 8.24 million (about US$11 million) of IMF resources are available to the Central African Republic.
"The government of the Central African Republic launched a three-year reform program in 1998 that aimed at strengthening the fiscal position and resuming the process of structural reform. The authorities' economic and financial adjustment program was part of a comprehensive approach to promote lasting social peace and economic development, with support from the international community, following a period of civil strife and military mutinies in 1996-97.
"During today's discussion, the Executive Directors emphasized the following key points:
"Directors welcomed the progress that had been made in 1998, although it was less than initially envisaged under the program. Budgetary revenue recovered strongly but fell short of program objectives. Directors regretted that the government had accumulated further external and domestic payments arrears. There were also significant delays in the implementation of structural reform measures. Directors therefore were encouraged that the authorities had taken took strong corrective actions in the early months of 1999, which laid the basis for completing the midterm review. They welcomed in particular that budget revenue collections had improved in the first quarter of the year; one commercial bank was privatized in December 1998, and steps were taken toward privatization of the distribution of petroleum products.
"Directors stressed that successful implementation of the financial program, including the clearance of external and domestic arrears, will hinge crucially on a sustained increase in budget revenue and a timely implementation of agreed measures. They recommended the authorities to raise revenue by broadening the tax base, improving tax administration and combating fraud, and welcomed the authorities' intention to implement further fiscal reforms in order to strengthen revenue collection. They encouraged the authorities to monitor the budget execution carefully, and to adhere to their expenditure priorities.
"Directors endorsed the authorities' commitment to complete the structural reforms launched in 1998 in the public enterprise sector, particularly in the cotton sector, and to improve the legal and regulatory framework for private sector activity. They stressed the need for the C.A.R. authorities to strengthen their implementation capacity in these areas and to improve the delivery of basic services in education and health, so as to bring the country onto a path of sustainable development and reduce poverty," Ouattara said.