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The Central African authorities and IMF staff discussed economic
policies and structural reforms that could form the basis of a
staff-monitored program. These discussions will continue in the
coming days.
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The staff-monitored program will aim at helping the authorities
address the economic challenges caused by the security crisis and
the Covid-19 pandemic and allow them to benefit from budget support
by other development partners. It calls for the implementation of
structural reforms to improve governance and public financial
management and strengthen domestic revenue mobilization.
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The improvement in the security situation over the past few months
and the reopening of the trade corridor between Bangui and Cameroon
have allowed economic activity to pick up more quickly than
expected in the spring, while inflationary pressures have started
to abate.
Washington, DC:
An International Monetary Fund (IMF) team led by Mr. Édouard Martin
conducted a mission with the Central African Republic from November 15 to
26, 2021, to discuss a staff-monitored program with the authorities.
At the conclusion of the mission, Mr. Martin issued the following
statement:
"The Central African authorities and the staff of the International
Monetary Fund (IMF) discussed economic policies and structural reforms that
could form the basis of a staff-monitored program (SMP). These discussions
will continue in the coming days so as to reach a staff-level agreement
that could be submitted for approval to IMF Management by the end of the
year. The 7-month SMP will aim at helping the authorities address the
economic challenges caused by the security crisis and the Covid-19
pandemic. Its satisfactory implementation would allow for the resumption of
discussions under the Extended Credit Facility (ECF) supported program in
the second half of 2022.
" The improvement in the security situation over the past few months and
the reopening of the trade corridor between Bangui and Cameroon have
allowed economic activity to pick up more quickly than expected in the
spring. The growth forecast for 2021 has therefore been revised upwards
from -1 to 1 percent. The continued economic recovery next year is expected
to allow growth to reach 4 percent. As inflationary pressures stemming from
supply bottlenecks caused by the closure of the trade corridor at the start
of the year have eased in recent months, inflation is expected to gradually
moderate to 3½ percent year-on-year by the end of the year and less than 3
percent next year. Owing to the 5 percent drop in GDP in official transfers
resulting from the postponement of the disbursement of budget support by
technical and financial partners expected this year, the current account
deficit would increase to 10½ percent of GDP in 2021, against 8½ percent of
GDP in 2020.
“ Budgetary developments in recent months appear to be in line with the
objectives of the supplementary budget law. Domestic revenue is expected to
be slightly higher than expected—on account of a faster economic
recovery—while spending appears to be well under control. The on-lending by
the BEAC of part of the Special Drawing Rights (SDR) allocation provided by
the IMF should make it possible to accelerate the repayment of domestic
arrears and to start repaying the bridge loans contracted with commercial
banks during the last months.
" The 2022 budget law will seek to ensure the sustainable financing of
priority spending — including in sectors such as health and security —
through increased mobilization of revenue and grants, non-priority spending
rationalization, and prioritization of concessional external financing. In
order to contain the pandemic, and with the support of development
partners, the government also intends to accelerate the vaccination
campaign, with the objective of vaccinating close to 3 million people by
the end of 2022.
" The IMF team also discussed with the Central African authorities a
structural reform program for the coming months, aimed at improving public
financial management, increasing domestic revenue mobilization and
strengthening governance. The authorities intend in particular to submit a
draft anti-corruption law to the National Assembly and to continue their
efforts to fully deploy the system for electronic tax declarations by large
companies, consolidate the single treasury account, and digitalize customs
procedures and controls.
"The team would like to express its deep appreciation to the authorities
for their excellent collaboration and the open atmosphere that prevailed
during the discussions. "
The IMF team met with President Touadéra, President of the National
Assembly Sarandji, Finance Minister Dondra, Health Minister Somse, Mines
Minister Benam-Beltoungou, BEAC National Director Chaïbou, other senior
government officials, and representatives of technical and financial
partners.
