IMF Staff Completes Mission to the Central African Republic

IMF News, November 26, 2021

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Mission led by Mr. Édouard Martin conducted from November 15 to 26, 2021.
Purpose: discuss a staff-monitored program (SMP) with the authorities; discussions to continue with the aim of reaching a staff-level agreement that could be submitted for approval to IMF Management by the end of the year.
SMP duration: 7-month SMP.
SMP objectives:
- Help authorities address economic challenges caused by the security crisis and the Covid-19 pandemic.
- Allow authorities to benefit from budget support by other development partners.
- Satisfactory implementation would allow resumption of discussions under the Extended Credit Facility (ECF) supported program in the second half of 2022.

Security and trade:
- Improvement in the security situation over the past few months.
- Reopening of the trade corridor between Bangui and Cameroon has allowed economic activity to pick up more quickly than expected in the spring.
Growth forecasts:
- 2021 growth forecast revised upwards from -1 to 1 percent.
- Growth expected to reach 4 percent in 2022.
Inflation:
- Inflationary pressures from supply bottlenecks caused by the corridor closure have eased.
- Inflation expected to gradually moderate to 3½ percent year-on-year by the end of the year.
- Inflation expected to be less than 3 percent next year.
External accounts:
- 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:
- Recent months appear to be in line with the objectives of the supplementary budget law.
- Domestic revenue expected to be slightly higher than expected on account of a faster economic recovery.
- Spending appears to be well under control.
Use of IMF-related resources:
- 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.
2022 budget priorities:
- Ensure sustainable financing of priority spending, including health and security.
- Achieve this through increased mobilization of revenue and grants, non-priority spending rationalization, and prioritization of concessional external financing.

Structural reform program aims:
- Improve public financial management.
- Increase domestic revenue mobilization.
- Strengthen governance.
Specific planned measures:
- Submit a draft anti-corruption law to the National Assembly.
- Continue efforts to fully deploy the system for electronic tax declarations by large companies.
- Consolidate the single treasury account.
- Digitalize customs procedures and controls.

Vaccination objective:
- With the support of development partners, the government intends to accelerate the vaccination campaign, with the objective of vaccinating close to 3 million people by the end of 2022.

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.
Statement attribution:
- End-of-Mission press release reflecting preliminary findings; views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

IMF press release: IMF Staff Completes Mission to the Central African Republic, November 26, 2021.