## _cr09241

## Source details

**Canonical URL:** [_cr09241](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09241.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09241.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09241.pdf.json)

---

### Summary of the APR and JSAN purpose
- The JSAN reviews the first annual progress report (APR) on implementation of the Poverty Reduction Strategy (PRS) of the Central African Republic (C.A.R.), presented to the Boards of the IMF on April 29, 2008, and IDA on May 27, 2008.
- The APR covers the period September 2007–December 2008 and incorporates inputs from representatives of civil society and the donor community.
- The APR was shared in draft with stakeholders in December 2008 and formally shared with staffs in March 2009; staffs note the APR would have been more useful if released before the beginning of the budget cycle.
- The PRS strategic pillars remain valid:
  - (i) restore security, consolidate peace, and prevent conflict;
  - (ii) promote good governance and the rule of law;
  - (iii) rebuild and diversify the economy; and
  - (iv) develop human capital.

### Financing and donor support
- Donor commitments and disbursements:
  - As of November 15, 2008, US$755 million committed for PRS activities for 2008–10; US$408 million disbursed in 2008.
- Financing needs estimated at US$1.1 billion (pledging conference, Brussels, November 2007).
- APR shows financing needs exceed donor commitments.

### Macroeconomic performance
- 2008 economic shocks and outcomes:
  - Growth slowed to 2.4 percent in 2008 from 3.7 percent in 2007.
  - Inflation accelerated to almost 10 percent.
  - External current account balance deteriorated.
- Causes:
  - Domestic social tensions and power shortages;
  - Global food and fuel price hikes and financial shocks.
- Fiscal performance:
  - Domestic revenues increased, improving the revenue-to-GDP ratio.
  - Poverty-related spending was well-executed; significant domestic arrears were cleared.
  - Need to control use of commercial bank credit and improve timeliness of external debt service payments.
  - Debt relief under the enhanced HIPC Initiative (interim relief between decision point and completion point) has smoothed budget execution.
- Structural reforms and resilience:
  - Improvements in tax and customs administration, including measures after the Guichet Unique audit in Douala.
  - Use of an automatic adjustment mechanism for petroleum product prices; staffs encourage quarterly application and avoidance of deviations.
  - Government generates significant revenues from petroleum consumption to partially offset revenue losses from external shocks to primary production sectors.
- Staff recommendations:
  - Future APRs should include an up-to-date macroeconomic framework.
  - Maintain prudent fiscal stance to ensure debt sustainability and contain inflation.
  - Donor support critical to address social/economic bottlenecks and infrastructure.

### Restore security, consolidate peace, and prevent conflict
- Political progress:
  - Inclusive Political Dialogue with major political actors in December 2008; creation of a coalition government including civil society, opposition, and rebel groups.
  - Libreville Agreement of June 2008 preceded these steps; Amnesty Law promulgated in October 2008 covering crimes since 2003 (except war crimes and crimes against humanity under ICC jurisdiction).
  - Elections potentially possible in 2010 with support from international community, including MINURCAT, EUFOR and MICOPAX and the UN Peace Building Office.
- Security sector reform (SSR) and DDR:
  - Implemented SSR recommendations include capacity building in Ministries of Defense, Interior, and Justice; rehabilitation of prisons and public offices; dismantling illegal traffic barriers.
  - Disarmament/demobilization results include integration of 4,590 ex-combatants and destruction of small arms.
  - DDR program: US$20 million identified though total costing not yet completed; UNDP leading discussions; recommendation to prioritize rapid DDR implementation.
  - Need to revise security sector governance documents to improve public financial management and minimize leakages.

### Promote good governance and the rule of law
- Anti-corruption efforts:
  - Creation of an Anti-Corruption Committee (ACC) in March 2008 with government, anti-corruption bodies, audit/control agencies, civil society, and private business representation.
  - Anti-Corruption Strategy being finalized.
  - Enforcement of official dispositions requiring asset declarations by government members and high-ranking officials (constitutional and March 2008 decree requirements).
  - Uncovered corruption cases in the treasury and tax directorate involving more than 50 agents.
  - Transparency International Index improved from 162 of 180 countries in 2007 to 151 of 180 countries in 2008.
- Legal and institutional gaps and staff advice:
  - Authorities should conduct a gap analysis to align C.A.R. laws with the UN convention.
  - Asset declarations need to reflect international practice and be done annually; current frequency not addressed by the Constitution or other law.
  - A Law to protect whistleblowers needs adoption.
  - Finalize Anti-Corruption Strategy and implementation plan.
- Procurement and public financial management (PFM) progress:
  - Procurement Code promulgated in June 2008; National Action Plan validated in December 2008.
  - Fiscal management advances:
    - New chart of government accounts adopted mid-January 2009;
    - Preparation of a medium-term expenditure framework (MTEF) for health, education, infrastructure, and agriculture for the 2010 budget;
    - Development of medium-term sectoral programs using PRSP monitoring indicators.
  - Share of key sectors in the budget (education, health, social welfare, infrastructures, and rural development) increased from 34 percent in 2007 to 38 percent in 2008; notable increases in infrastructure, health, and education; declines for rural development, fight against diseases and epidemics, and potable water in small towns and rural areas in 2008.
  - Accounting and reporting: publication of quarterly budget execution reports; adoption of new accounting classifications and computerized financial management system (GESCO).
  - Cash management supervised by liquidity committee (technical) and treasury committee headed by the President (strategic); restoration of autonomy to financial control directorate; closing of non-donor-mandated commercial bank accounts; significant effort toward consolidating a Treasury Single Account (TSA).
- Key PFM and procurement actions for the next 12 months (staffs’ recommendations):
  - Implement the actions identified in the procurement National Action Plan.
  - Build capacity in priority ministries (e.g., education, health, infrastructure) to prepare and execute the budget, and roll out a Medium Term Expenditure Framework.
  - Ensure coherence between budget and accounting nomenclatures and integrate all stages of expenditures from commitment to payment into the computerized financial management system.
  - Complete the 2008 government accounts and execution law for presentation to the Courts of Accounts and parliament in the second semester of 2009.
  - Implement a Treasury Single Account to improve transparency of government financial operations.
  - Prepare a Public Finance Management National Action Plan to ensure donors’ programs align with government priorities.
- Public debt management needs:
  - APR should include a full discussion of debt management issues.
  - Actions to highlight: installation of a computerized debt management system; establishment of a comprehensive debt database covering domestic and external debt; publication of a statistical debt bulletin.
  - National Committee for Public Debt (created by presidential decree) should play an active role in designing and implementing government debt strategy with technical support from the debt department.

### Rebuild and diversify the economy
- Growth sectors and legal framework:
  - PRS growth focus: forestry, mining and mineral exploitation, agriculture and tourism.
  - Progress made in infrastructure and governance in natural resources.
- Mining sector developments and staff advice:
  - C.A.R. selected as an official EITI member.
  - Suspension of issuance of new mining licenses until adoption of revised mining code; adoption of standard investment agreement in April 2009.
  - Need to build capacity at the Ministry of Mines for law enforcement, administrative/geological/engineering services, and establish a robust geological database.
  - Encourage government action on tracking diamond exports to increase government revenues.
- Forestry sector developments and staff advice:
  - New forestry code adopted in October 2008; implementing texts in April 2009.
  - Sustain reform toward transparent management of forest taxes; ensure continued transfer of resources to communities for construction/rehabilitation of basic infrastructure.
  - Priorities:
    - (i) advance the Africa Forest Law Enforcement and Governance (AFLEG) action plan to combat illegal logging, trade and wildlife poaching and ensure access to EU market;
    - (ii) seek bids for remaining concessions under the new code.
- Utilities, electricity, water and sanitation:
  - Only a small portion of the population is served by national public utilities for water (SODECA) and electricity (ENERCA).
  - Electricity supply stabilized after 2008 shortages but remains insufficient; priority: rapid rehabilitation of power stations serving Bangui and implementation of loss-reduction programs, including pre-payment metering.
  - Need for significant additional investment to increase electricity coverage.
  - Recent water/sanitation efforts: infrastructure to give access to water supply to 170,000 people; construction of 1,670 latrines; distribution of 15,000 hygiene kits to households.
  - Financial and structural problems in public utilities persist: until arrears are paid to utilities, bill collection improved, and institutional setup addressed, service delivery cannot be sustained.
  - Inclusion of full provision of utility consumption in the 2009 budget is praiseworthy because government institutions are the largest clients of ENERCA and SODECA and this will gradually improve utilities’ financial position to support maintenance, repairs and investment.

### Transport infrastructure and roads
- Government provides a stable source of funding for road maintenance.
- 2008 targets not achieved, but APR notes:
  - "1,500 km of roads were rehabilitated," reducing share of unrehabilitated roads from "42 percent" to "17 percent".
  - "206 km of rural roads were rehabilitated and 52 km constructed," increasing share of rural roads in good condition from "5 percent" to "12 percent"—above the 2008 target.
- APR does not discuss progress on urban road rehabilitation and urban drainage in Bangui.
- Key priority activities for the coming year include completing rehabilitation of corridors linking Bangui to the Port of Douala.
- Staffs encourage government to finalize measures to bring national regulation of the sector into compliance with regional and international regulations and the Transport Roundtable to mobilize financing for transport programs.

### Agriculture and income-generating activities
- Greater attention is needed to support income-generating activities, particularly in agriculture, given the high percentage of poor earning their livings from this sector.
- Achievements to date include:
  - Payment of arrears to cotton farmers.
  - Provision of agricultural inputs, extension services, and machinery to farming families in the “Development Poles” targeted areas.
  - Initiation of livestock restocking and pilot programs.
- APR does not discuss revamping the shrinking cotton and coffee sectors or diversifying farmers’ activities.
- Government has drafted a comprehensive medium-term priority action plan following the national workshop (Etats Generaux) of agriculture; implementation is expected to take effect with the launching of the “Development Pole” project and other donor-supported programs.

### Business environment and private sector
- Some progress made, but more is needed; C.A.R. ranked last in the latest Doing Business report.
- Authorities have:
  - Facilitated business creation with the one-stop window (Guichet Unique).
  - Shortened time to create a business from "4 months" to "15 days" and reduced number of procedures required.
  - Translated DTIS recommendations into policies and projects including reorganization of the customs department and ongoing revision of the commercial and national investment charts.
- Important recommendations not yet carried out, notably strategies to revamp agriculture including the coffee and cotton sectors.
- APR does not discuss support to investment climate reforms and the local small- and medium-sized enterprise sector through IFC-supported programs.
- Staffs encourage authorities to start implementing action plans finalized with partners, especially those for IFC-supported programs and those identified during the private sector sectoral round table in February 2009.

### Develop human capital — Education
- APR reports some progress on government human capacity program but did not fully utilize available data (recently updated statistical book for education).
- Recent achievements include:
  - Rehabilitation of a few schools.
  - Hiring of "750 new contractual teachers".
  - Distribution of "4,500 manuals".
- Combined with administrative and pedagogical measures (teacher training and special support programs), repetition rate reduced from "30 percent" to "26 percent" in some academic inspectorates in non-conflict areas (not mentioned in APR).
- C.A.R. will receive "US$37.8 million" from the FTI Catalytic funds to support the EFA plan, as approved by the EFA/FTI Committee in December 2008.
- FTI funds will support hiring new teachers, teacher training and education materials, increasing management capacity and internal efficiency, and building schools.

### Develop human capital — Health and HIV/AIDS
- Steady progress in preventive efforts to reduce child mortality and HIV/AIDS.
- DPT3 immunization rates were kept above "80 percent" until September 2008.
- Multisectoral approach yielded:
  - Stable HIV prevalence rates at neonatal surveillance sites during first year of PRS implementation; rates among young pregnant women (ages "25–29") still high (around "10 percent") at some sites.
  - Target for HIV-positive mothers receiving prophylactic treatment achieved.
  - Target for HIV-infected patients receiving ARV therapy exceeded.
- Malaria programs distributing treated mosquito nets to children under five and pregnant women are in place.
- Anti-tuberculosis drugs now available free, but APR does not discuss outcomes due to lack of data.
- Next priorities:
  - (i) Put into operation a monitoring and evaluation action plan for the health sector to inform activities and measure progress.
  - (ii) Prepare the MTEF for the health sector to sustain multisector national health programs including:
    - National Plan for the Development of Sanitation 2006–15,
    - National Strategic Plan to Reduce Malaria,
    - Comprehensive and Extended Multi-Annual Vaccination Program 2007–11,
    - Updated National Strategy against HIV/AIDS (2006–10).

### Monitoring, evaluation, and statistics
- Authorities have identified measurable result and outcome indicators for all PRSP sectors (Annexes 1 and 2).
- APR documents progress in simplifying institutional structure for monitoring and evaluation and participatory PRSP monitoring (thematic and regional workshops).
- Monitoring structures showed weaknesses during PRS monitoring:
  - Synthesized analysis by National Technical Committee (NTC) affected by lack of efficient coordination with National Sectoral Committees (NSC).
  - Missing data for 2008 in Annexes 1 and 2 of APR.
  - Key surveys (household, agricultural survey, employment, health and education) have not yet been completed; some core indicators remain to be finalized.
- Staffs urge:
  - Strengthening coordination between NTC and NSC.
  - Implementing recently adopted training programs for capacity building among PRS committees.
  - Strengthening the statistical institute to analyze and interpret data.
  - Timely analysis of the 2008 integrated household survey and completion of other key surveys to update the poverty profile, ensure adequate targeting, and inform future activities.

### Disaster risk management
- Recent increase in frequency and intensity of natural disasters due to climate change is a major challenge to sustainable development and economic growth in C.A.R.
- Staffs suggest government develop an effective and proactive disaster risk management (DRM) framework to reduce human and economic vulnerability and strengthen national disaster risk reduction strategies.

### Conclusion and recommended actions to strengthen PRS implementation
- Staffs consider the requirement of satisfactory implementation of the PRS for at least a year has been met.
- APR reflects accomplishments and shortcomings since September 2007 and identifies main obstacles and risks, including:
  - (i) Impact of changing international environment: oil shocks and food and financial crises.
  - (ii) Difficulty in mobilizing external resources to finance key activities, in particular the DDR programs.
  - (iii) Inadequate capacity to implement the PRS and to evaluate its impact.
- Recommended critical actions:
  - (i) Keep the macroeconomic and policy framework for the PRS up to date; current PRS framework might need revision in light of availability of financing.
  - (ii) Speed up implementation of the DDR and SSR programs.
  - (iii) Share the APR in a timely manner with all relevant stakeholders; a mid-year assessment before the beginning of a new budget cycle would strengthen links between PRSP programs, the MTEF and annual budgets.
  - (iv) Strengthen coordination among relevant entities to improve monitoring and reporting systems to inform policies and future actions.
  - (v) Finalize analysis of the household survey and complete other key surveys to evaluate PRS impact.
- Donor support remains critical to close financing gaps and address infrastructure and social sector bottlenecks.

### Question for Directors
- Do Directors agree with staffs’ assessment regarding:
  - (i) satisfactory implementation of the PRS; and
  - (ii) recommended actions critical to strengthening PRS implementation?

*Joint Staff Advisory Note on the APR for the PRS of the Central African Republic (September 2007–December 2008).*

### 1.      This Joint Staff Advisory Note (JSAN) reviews the first annual progress report

### _cr09241 - 1.      This Joint Staff Advisory Note (JSAN) reviews the first annual progress report

### Summary of the APR and JSAN purpose
- The JSAN reviews the first annual progress report (APR) on implementation of the Poverty Reduction Strategy (PRS) of the Central African Republic (C.A.R.), presented to the Boards of the IMF on April 29, 2008, and IDA on May 27, 2008.
- The APR covers the period September 2007–December 2008 and incorporates inputs from representatives of civil society and the donor community.
- The APR was shared in draft with stakeholders in December 2008 and formally shared with staffs in March 2009. Staffs note the APR would have been more useful if released before the beginning of the budget cycle.
- The PRS strategic pillars remain valid: (i) restore security, consolidate peace, and prevent conflict; (ii) promote good governance and the rule of law; (iii) rebuild and diversify the economy; and (iv) develop human capital.

### Financing and donor support
- Donor commitments and disbursements: As of November 15, 2008, US$755 million committed for PRS activities for 2008–10; US$408 million disbursed in 2008.
- Financing needs estimated at US$1.1 billion (pledging conference, Brussels, November 2007). The APR shows financing needs exceed donor commitments.

### H3: Macroeconomic performance
- 2008 economic shocks and outcomes:
  - Growth slowed to 2.4 percent in 2008 from 3.7 percent in 2007.
  - Inflation accelerated to almost 10 percent.
  - External current account balance deteriorated.
- Causes: domestic social tensions and power shortages; global food and fuel price hikes and financial shocks.
- Fiscal performance:
  - Domestic revenues increased, improving the revenue-to-GDP ratio.
  - Poverty-related spending was well-executed; significant domestic arrears were cleared.
  - Need to control use of commercial bank credit and improve timeliness of external debt service payments.
  - Debt relief under the enhanced HIPC Initiative (interim relief between decision point and completion point) has smoothed budget execution.
- Structural reforms and resilience:
  - Improvements in tax and customs administration, including measures after the Guichet Unique audit in Douala.
  - Use of an automatic adjustment mechanism for petroleum product prices; staff encourage quarterly application and avoidance of deviations.
  - Government now generates significant revenues from petroleum consumption to partially offset revenue losses from external shocks to primary production sectors.
- Staff recommendations:
  - Future APRs should include an up-to-date macroeconomic framework.
  - Maintain prudent fiscal stance to ensure debt sustainability and contain inflation.
  - Donor support critical to address social/economic bottlenecks and infrastructure.

### H3: Restore security, consolidate peace, and prevent conflict
- Political progress:
  - Inclusive Political Dialogue with major political actors in December 2008; creation of a coalition government including civil society, opposition, and rebel groups.
  - Libreville Agreement of June 2008 preceded these steps; Amnesty Law promulgated in October 2008 covering crimes since 2003 (except war crimes and crimes against humanity under ICC jurisdiction).
  - Elections potentially possible in 2010 with support from international community, including MINURCAT, EUFOR and MICOPAX and the UN Peace Building Office.
- Security sector reform (SSR) and DDR:
  - Implemented SSR recommendations include capacity building in Ministries of Defense, Interior, and Justice; rehabilitation of prisons and public offices; dismantling illegal traffic barriers.
  - Disarmament/demobilization results include integration of 4,590 ex-combatants and destruction of small arms.
  - DDR program: US$20 million identified though total costing not yet completed; UNDP leading discussions; recommendation to prioritize rapid DDR implementation.
  - Need to revise security sector governance documents to improve public financial management and minimize leakages.

### H3: Promote good governance and the rule of law
- Anti-corruption efforts:
  - Creation of an Anti-Corruption Committee (ACC) in March 2008 with government, anti-corruption bodies, audit/control agencies, civil society, and private business representation.
  - Anti-Corruption Strategy being finalized.
  - Enforcement of official dispositions requiring asset declarations by government members and high-ranking officials (constitutional and March 2008 decree requirements).
  - Uncovered corruption cases in the treasury and tax directorate involving more than 50 agents.
  - Transparency International Index improved from 162 of 180 countries in 2007 to 151 of 180 countries in 2008.
- Legal and institutional gaps and staff advice:
  - Authorities should conduct a gap analysis to align C.A.R. laws with the UN convention.
  - Asset declarations need to reflect international practice and be done annually; current frequency not addressed by the Constitution or other law.
  - A Law to protect whistleblowers needs adoption.
  - Finalize Anti-Corruption Strategy and implementation plan.
- Procurement and public financial management (PFM) progress:
  - Procurement Code promulgated in June 2008; National Action Plan validated in December 2008.
  - Fiscal management advances: new chart of government accounts adopted mid-January 2009; preparation of a medium-term expenditure framework (MTEF) for health, education, infrastructure, and agriculture for the 2010 budget; development of medium-term sectoral programs using PRSP monitoring indicators.
  - Share of key sectors in the budget (education, health, social welfare, infrastructures, and rural development) increased from 34 percent in 2007 to 38 percent in 2008; notable increases in infrastructure, health, and education; declines for rural development, fight against diseases and epidemics, and potable water in small towns and rural areas in 2008.
  - Accounting and reporting: publication of quarterly budget execution reports; adoption of new accounting classifications and computerized financial management system (GESCO).
  - Cash management supervised by liquidity committee (technical) and treasury committee headed by the President (strategic); restoration of autonomy to financial control directorate; closing of non-donor-mandated commercial bank accounts; significant effort toward consolidating a Treasury Single Account (TSA).
- Key PFM and procurement actions for the next 12 months (staffs’ recommendations):
  - Implement the actions identified in the procurement National Action Plan.
  - Build capacity in priority ministries (e.g., education, health, infrastructure) to prepare and execute the budget, and roll out a Medium Term Expenditure Framework.
  - Ensure coherence between budget and accounting nomenclatures and integrate all stages of expenditures from commitment to payment into the computerized financial management system.
  - Complete the 2008 government accounts and execution law for presentation to the Courts of Accounts and parliament in the second semester of 2009.
  - Implement a Treasury Single Account to improve transparency of government financial operations.
  - Prepare a Public Finance Management National Action Plan to ensure donors’ programs align with government priorities.
- Public debt management needs:
  - APR should include a full discussion of debt management issues.
  - Actions to highlight: installation of a computerized debt management system; establishment of a comprehensive debt database covering domestic and external debt; publication of a statistical debt bulletin.
  - National Committee for Public Debt (created by presidential decree) should play an active role in designing and implementing government debt strategy with technical support from the debt department.

### H3: Rebuild and diversify the economy
- Growth sectors and legal framework:
  - PRS growth focus: forestry, mining and mineral exploitation, agriculture and tourism.
  - Progress made in infrastructure and governance in natural resources.
- Mining sector developments and staff advice:
  - C.A.R. selected as an official EITI member.
  - Suspension of issuance of new mining licenses until adoption of revised mining code; adoption of standard investment agreement in April 2009.
  - Need to build capacity at the Ministry of Mines for law enforcement, administrative/geological/engineering services, and establish a robust geological database.
  - Encourage government action on tracking diamond exports to increase government revenues.
- Forestry sector developments and staff advice:
  - New forestry code adopted in October 2008; implementing texts in April 2009.
  - Sustain reform toward transparent management of forest taxes; ensure continued transfer of resources to communities for construction/rehabilitation of basic infrastructure.
  - Priorities: (i) advance the Africa Forest Law Enforcement and Governance (AFLEG) action plan to combat illegal logging, trade and wildlife poaching and ensure access to EU market; (ii) seek bids for remaining concessions under the new code.
- Utilities, electricity, water and sanitation:
  - Only a small portion of the population is served by national public utilities for water (SODECA) and electricity (ENERCA).
  - Electricity supply stabilized after 2008 shortages but remains insufficient; priority: rapid rehabilitation of power stations serving Bangui and implementation of loss-reduction programs, including pre-payment metering.
  - Need for significant additional investment to increase electricity coverage.
  - Recent water/sanitation efforts: infrastructure to give access to water supply to 170,000 people; construction of 1,670 latrines; distribution of 15,000 hygiene kits to households.
  - Financial and structural problems in public utilities persist: until arrears are paid to utilities, bill collection improved, and institutional setup addressed, service delivery cannot be sustained.
  - Inclusion of full provision of utility consumption in the 2009 budget is praiseworthy because government institutions are the largest clients of ENERCA and SODECA and this will gradually improve utilities’ financial position to support maintenance, repairs and investment.

### Concluding staff recommendations and suggested Board discussion points
- Update the macroeconomic framework in future APRs to reflect recent developments and revised growth prospects.
- Prioritize rapid implementation of DDR with full costing and donor coordination.
- Finalize and implement the Anti-Corruption Strategy and related legislation (annual asset declarations, whistleblower protection) and continue enforcement actions that uncovered corruption cases.
- Deepen procurement and PFM reforms through the National Action Plan, capacity building in priority ministries, integration of budget/accounting systems, completion of 2008 accounts and execution law, and implementation of a Treasury Single Account.
- Strengthen public debt management with a computerized system, comprehensive debt database, and active role for the National Committee for Public Debt.
- Sustain governance reforms in mining and forestry, build capacity in the Ministry of Mines, track diamond exports, advance AFLEG action plan, and seek bids for remaining forestry concessions.
- Address utility sector arrears and institutional weaknesses; prioritize rehabilitation and investment in electricity and water to support growth and health outcomes.
- Donor support remains critical to close financing gaps and address infrastructure and social sector bottlenecks.

*Joint Staff Advisory Note on the APR for the PRS of the Central African Republic (September 2007–December 2008).*

### 21.      The APR highlights the government’s commitment to the road program but

### 21.      The APR highlights the government’s commitment to the road program but

### Transport infrastructure and roads
- Government provides a stable source of funding for road maintenance.
- 2008 targets not achieved, but APR notes:
  - "1,500 km of roads were rehabilitated," reducing share of unrehabilitated roads from "42 percent" to "17 percent".
  - "206 km of rural roads were rehabilitated and 52 km constructed," increasing share of rural roads in good condition from "5 percent" to "12 percent"—above the 2008 target.
- APR does not discuss progress on urban road rehabilitation and urban drainage in Bangui.
- Key priority activities for the coming year include completing rehabilitation of corridors linking Bangui to the Port of Douala.
- Staffs encourage government to finalize measures to bring national regulation of the sector into compliance with regional and international regulations and the Transport Roundtable to mobilize financing for transport programs.

### Agriculture and income-generating activities
- Greater attention is needed to support income-generating activities, particularly in agriculture, given the high percentage of poor earning their livings from this sector.
- Achievements to date include:
  - Payment of arrears to cotton farmers.
  - Provision of agricultural inputs, extension services, and machinery to farming families in the “Development Poles” targeted areas.
  - Initiation of livestock restocking and pilot programs.
- APR does not discuss revamping the shrinking cotton and coffee sectors or diversifying farmers’ activities.
- Government has drafted a comprehensive medium-term priority action plan following the national workshop (Etats Generaux) of agriculture; implementation is expected to take effect with the launching of the “Development Pole” project and other donor-supported programs.

### Business environment and private sector
- Some progress made, but more is needed; C.A.R. ranked last in the latest Doing Business report.
- Authorities have:
  - Facilitated business creation with the one-stop window (Guichet Unique).
  - Shortened time to create a business from "4 months" to "15 days" and reduced number of procedures required.
  - Translated DTIS recommendations into policies and projects including reorganization of the customs department and ongoing revision of the commercial and national investment charts.
- Important recommendations not yet carried out, notably strategies to revamp agriculture including the coffee and cotton sectors.
- APR does not discuss support to investment climate reforms and the local small- and medium-sized enterprise sector through IFC-supported programs.
- Staffs encourage authorities to start implementing action plans finalized with partners, especially those for IFC-supported programs and those identified during the private sector sectoral round table in February 2009.

### Develop human capital — Education
- APR reports some progress on government human capacity program but did not fully utilize available data (recently updated statistical book for education).
- Recent achievements include:
  - Rehabilitation of a few schools.
  - Hiring of "750 new contractual teachers".
  - Distribution of "4,500 manuals".
- Combined with administrative and pedagogical measures (teacher training and special support programs), repetition rate reduced from "30 percent" to "26 percent" in some academic inspectorates in non-conflict areas (not mentioned in APR).
- C.A.R. will receive "US$37.8 million" from the FTI Catalytic funds to support the EFA plan, as approved by the EFA/FTI Committee in December 2008.
- FTI funds will support hiring new teachers, teacher training and education materials, increasing management capacity and internal efficiency, and building schools.

### Develop human capital — Health and HIV/AIDS
- Steady progress in preventive efforts to reduce child mortality and HIV/AIDS.
- DPT3 immunization rates were kept above "80 percent" until September 2008.
- Multisectoral approach yielded:
  - Stable HIV prevalence rates at neonatal surveillance sites during first year of PRS implementation; rates among young pregnant women (ages "25–29") still high (around "10 percent") at some sites.
  - Target for HIV-positive mothers receiving prophylactic treatment achieved.
  - Target for HIV-infected patients receiving ARV therapy exceeded.
- Malaria programs distributing treated mosquito nets to children under five and pregnant women are in place.
- Anti-tuberculosis drugs now available free, but APR does not discuss outcomes due to lack of data.
- Next priorities:
  - (i) Put into operation a monitoring and evaluation action plan for the health sector to inform activities and measure progress.
  - (ii) Prepare the MTEF for the health sector to sustain multisector national health programs including:
    - National Plan for the Development of Sanitation 2006–15,
    - National Strategic Plan to Reduce Malaria,
    - Comprehensive and Extended Multi-Annual Vaccination Program 2007–11,
    - Updated National Strategy against HIV/AIDS (2006–10).

### Monitoring, evaluation, and statistics
- Authorities have identified measurable result and outcome indicators for all PRSP sectors (Annexes 1 and 2).
- APR documents progress in simplifying institutional structure for monitoring and evaluation and participatory PRSP monitoring (thematic and regional workshops).
- Monitoring structures showed weaknesses during PRS monitoring:
  - Synthesized analysis by National Technical Committee (NTC) affected by lack of efficient coordination with National Sectoral Committees (NSC).
  - Missing data for 2008 in Annexes 1 and 2 of APR.
  - Key surveys (household, agricultural survey, employment, health and education) have not yet been completed; some core indicators remain to be finalized.
- Staffs urge:
  - Strengthening coordination between NTC and NSC.
  - Implementing recently adopted training programs for capacity building among PRS committees.
  - Strengthening the statistical institute to analyze and interpret data.
  - Timely analysis of the 2008 integrated household survey and completion of other key surveys to update the poverty profile, ensure adequate targeting, and inform future activities.

### Disaster risk management
- Recent increase in frequency and intensity of natural disasters due to climate change is a major challenge to sustainable development and economic growth in C.A.R.
- Staffs suggest government develop an effective and proactive disaster risk management (DRM) framework to reduce human and economic vulnerability and strengthen national disaster risk reduction strategies.

### Conclusion and recommended actions to strengthen PRS implementation
- Staffs consider the requirement of satisfactory implementation of the PRS for at least a year has been met.
- APR reflects accomplishments and shortcomings since September 2007 and identifies main obstacles and risks, including:
  - (i) Impact of changing international environment: oil shocks and food and financial crises.
  - (ii) Difficulty in mobilizing external resources to finance key activities, in particular the DDR programs.
  - (iii) Inadequate capacity to implement the PRS and to evaluate its impact.
- Recommended critical actions:
  - (i) Keep the macroeconomic and policy framework for the PRS up to date; current PRS framework might need revision in light of availability of financing.
  - (ii) Speed up implementation of the DDR and SSR programs.
  - (iii) Share the APR in a timely manner with all relevant stakeholders; a mid-year assessment before the beginning of a new budget cycle would strengthen links between PRSP programs, the MTEF and annual budgets.
  - (iv) Strengthen coordination among relevant entities to improve monitoring and reporting systems to inform policies and future actions.
  - (v) Finalize analysis of the household survey and complete other key surveys to evaluate PRS impact.

### Question for Directors
- Do Directors agree with staffs’ assessment regarding:
  - (i) satisfactory implementation of the PRS; and
  - (ii) recommended actions critical to strengthening PRS implementation?

*Source: APR assessment excerpt (paragraphs 21–31) from the provided IMF document.*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2009/_cr09241.pdf_