IMF Staff Team Concludes Visit to the Central African Republic
IMF News, September 13, 2016
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- Published: September 13, 2016
Visit details
- IMF staff team visited Bangui from September 6-13, 2016.
- Mission led by Samir Jahjah, IMF Mission Chief for Central African Republic (CAR).
- Purpose: assess economic and financial developments through end-August, review early progress under the program supported by the Extended Credit Facility (ECF), and discuss progress in preparing for the Brussels Donors Conference in November 2016.
Economic assessment and projections
- Since the beginning of the year, the economy has been on a strong recovery path.
- Economic activity is picking up in the coffee, cotton and forestry sectors.
- Trade and transport show better performance than projected.
- Constraints to growth:
- Low public investment spending.
- Weak infrastructure.
- Continued weaknesses in the banking sector.
- Food prices trajectory:
- Declined in the first six months of the year.
- Picked-up during the summer due to returning refugees and heavy rains that negatively affected the manioc crop.
- Projections:
- Economic growth is projected at 5.2 percent.
- Inflation is projected at 4 percent.
- Downside risks if recent inflationary pressures observed in Bangui persist through the year.
Fiscal position, program performance, and reforms
- Fiscal revenue and public expenditure are broadly in line with projections.
- Arrears clearance has been higher than projected.
- Overall fiscal balance:
- Expected to be in line with the program objective of a primary deficit of 3.3 percent of GDP in 2016.
- Revised budget for 2016:
- Submitted to parliament.
- Includes additional measures to improve domestic revenue mobilization, including a new price structure for oil products.
- Current expenditure is contained.
- Planned spending:
- New demobilization-related spending that has received financial support from members of the Central African Economic and Monetary Community.
- Budget support:
- Government is on track to receive the projected budget support through the end of the year, which will allow the build-up of a fiscal buffer and help prevent domestic payments arrears accumulation, including to pensions.
- Structural reform agenda:
- Implementation appears broadly on track.
- Barring unforeseen events, the government is on track to meet its revenue target for 2016.
- Policy guidance / expectations for 2017:
- Economy expected to further improve in 2017, supported by:
- Peace and reconciliation efforts underway.
- Continued implementation of appropriate macroeconomic and structural policies.
- An investment plan with a clear set of priorities.
- Possible significant assistance from development partners who are expected to meet in Brussels on November 17, 2016.
- Other welcome development:
- Efforts by the government toward a total lifting of the export suspension of diamond in the context of the Kimberley Process.
Meetings and stakeholder engagement
- The IMF staff team met with:
- President Faustin Archange Touadera.
- Prime Minister Simplice Mathien Sarandji.
- Minister of Economy and Plan and International Cooperation Felix Moloua.
- Minister of State for Security Sacko.
- Minister of Finance and Budget Henri-Marie Dondra.
- Vice-President of the National Assembly Aurelien Simplice Zingas.
- President of the Finance and Budget Committee Martin Ziguele.
- National Director of the Banque des Etats d’Afrique Centrale Ali Chaibou.
- Other senior government officials, representatives of the private sector, representatives of the retirees, and development partners.
- The mission thanked the CAR authorities for the fruitful discussions and their warm hospitality.
ECF arrangement note
- The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems.
- The arrangement for Central African Republic is in an amount equivalent to SDR 83.55 million (about US$115.8 million or 75 percent of quota) and was approved on July 21, 2016 (see Press Release No.16/352).
IMF Press Release No. 16/404 — September 13, 2016