Press Release No. 11/418

Press Release No. 11/418
November 16, 2011

An International Monetary Fund (IMF) mission, led by Norbert Toé, visited the Central African Republic during November 3-16, 2011. The objectives of the mission were to conduct the 2011 Article IV consultation¹ and review the implementation of corrective measures recommended by a July 2011 IMF mission.

The mission met with President of the National Assembly, Célestin Gaombalet, Prime Minister, Faustin Archange Touadéra; Minister of State for Finance and Budget, Cl. Sylvain Ndoutingaï; Minister of State for Planning and Economy, Sylvain Maliko; Minister of Commerce and Industry, Marlyn Mouliom Roosalem;National Director of the BEAC, Camille Kéléfio; and other ministers and senior government and BEAC officials, as well as representatives of civil society organizations and trade unions, the private sector, and the donor community.

At the conclusion of the visit, Mr. Toé issued the following statement:

“Economic activity in 2011 is below expectations as the election period prolonged and security concerns remained. Real gross domestic product (GDP) growth is estimated at 3.1 percent, compared to 3.3 percent in 2010, driven by agriculture, and the moderate recovery of exports. Reflecting mainly increased domestic food production, imported food inflation pressures were contained and average annual inflation fell to 1.3 percent in October 2011, from 1.5 percent in December 2010. Helped by the recovery of forestry and diamond exports, the external current account position is expected to stabilize, in spite of a reduction in foreign aid. The fiscal situation remains tight as domestic revenue mobilization weakened and the anticipated budget support did not materialize. Consequently capital expenditures were reduced and domestic and external payments arrears were accumulated”

“Recognizing the need to improve budget execution and accelerate structural reforms, the Government made efforts to reconcile and classify the expenditures initiated at the Treasury, and put in place a number of measures, in response to the recommendations of the July 2011 mission, including (i) revitalizing the liquidity management committee, (ii) improving budgetary transparency, and (iii) strengthening the Technical Committee in charge of monitoring macroeconomic developments and structural reforms. Given the huge investment and social expenditure needs for sustained and inclusive growth, the mission discussed with the authorities the potential for increasing domestic revenue mobilization, as well as measures to further strengthen public financial management, and improve governance. The authorities intend to review the fuel price structure and to implement automatic monthly fuel price adjustments to safeguard domestic revenues.

“Progress in the implementation of these additional measures would be the basis for an IMF team to return to Bangui in the first quarter of 2012 to discuss the authorities’ reform program.”

¹ Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities, and subsequently made public on www.imf.org.