IMF Staff Completes 2022 Article IV Mission to the Central African Republic

IMF News, January 26, 2023

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Canonical URL: IMF Staff Completes 2022 Article IV Mission to the Central African Republic

Press Release No. 23/20; January 26, 2023.
IMF team led by Albert Touna Mama visited Bangui during December 5-16, 2022; discussions continued virtually until January 20, 2023.
End-of-mission statement conveyed preliminary findings; staff report to be prepared for the IMF’s Executive Board subject to management approval.

Economic recovery that began after the COVID-19 crisis was severely disrupted by fuel shortages and soaring food prices following the war in Ukraine.
Record double-digit inflation—the highest in the Central African Economic and Monetary Community (CEMAC)—was recorded in 2022, further aggravating food insecurity.
Forecasts for growth prospects were revised downward and near-stagnation is now expected in 2022, driven by:
- Generalized increase in production and import costs due to the country’s landlocked situation.
- Decline in domestic demand caused by the slowdown in public spending.
Budget execution in 2022 was severely disrupted by the economic downturn and the collapse of public revenues, particularly those related to the taxation of fuel.
Authorities’ prudent implementation of current expenditures and under-execution of the investment budget helped partially offset underperformance of public revenues and contain the increase in the public deficit.

The food crisis that was already affecting the country worsened after the war in Ukraine and requires immediate humanitarian and budgetary assistance.
The proportion of people suffering from acute food insecurity—already one of the highest in the world in 2022—is expected to increase from 44 to 49 percent in 2023 according to the World Food Programme (WFP).

Economic growth in 2023 will depend on financing conditions and the continuation of reforms, including fuel market reforms aimed at improving supply to the Central African market.
Downside risks to the economic outlook remain high, including:
- A possible deterioration in the terms of trade.
- A worsening of the security situation.
The government is encouraged to intensify dialogue with the international community to secure concessional financing in 2023 and beyond, meet external financing needs and ensure public debt sustainability.

The 2023 Budget Law aims at stabilizing public finances while continuing efforts to mobilize domestic revenues through new measures.
The increase in fuel prices at the pump should enable the government to regain tax revenues to support priority public spending and re-establish a regular, high-quality fuel supply on the Central African market.
The IMF stands ready to support authorities in reforming the fuel price structure to improve its flexibility and better protect the most vulnerable population groups affected by the spike in fuel prices.
The mission encourages the authorities to continue efforts to strengthen the management and transparency of public finance and improve governance.
The mission also encourages the authorities to bring the law governing cryptocurrencies in the CAR in line with existing laws and regulations under the Central African Monetary Union (CAMU) and the CEMAC.

The mission met with:
- Prime Minister Mr. Félix Moloua
- President of the National Assembly Mr. Simplice Sarandji
- Minister for Finance and Budget Mr. Hervé Ndoba
- Minister for Humanitarian Action and National Reconciliation Ms. Virginie Baikoua
- Minister for Energy Mr. Arthur Piri
- National Director of the Bank of Central African States (BEAC) Mr. Ali Chaïbou
- Other government officials, senior officials of the administration and the BEAC, representatives of the private sector and the development partner community.
IMF Communications Department media relations: PRESS OFFICER: Eva Graf; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson

IMF Staff statement following the 2022 Article IV mission to the Central African Republic (January 26, 2023).