IMF Executive Board Approves a US$191.4 million Extended Credit Facility Arrangement with the Central African Republic
IMF News, April 28, 2023
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- Published: April 28, 2023
Program approval and financing
- The Executive Board approved a 38-month Extended Credit Facility (ECF) arrangement of SDR 141.68 million (about US$191.4 million).
- The decision enables an immediate disbursement equivalent to SDR 11.3 million (about US$15.2 million).
- The ECF-supported program is part of coordinated efforts by international financial institutions (IFIs) to support the people of CAR and avert a humanitarian crisis.
- The program contains important governance safeguards for the use of Fund resources.
Macroeconomic context and humanitarian situation
- A decade after the 2013 civil war, CAR faces "crisis upon crisis" with exceptional hardship and acute food insecurity.
- The country remains one of the poorest in the world, with almost 80 percent of people living in poverty.
- According to the United Nations Office for the Coordination of Humanitarian Assistance (OCHA), 3.4 million people – 56 percent of the population – will need humanitarian assistance and protection in 2023, an increase of 10 percent compared to 2022.
- Mr. Kenji Okamura noted up to 3 million inhabitants affected by deteriorating food insecurity.
Key policy commitments under the program
- Safeguarding priority spending.
- Improving domestic revenue mobilization.
- Strengthening customs and tax administration.
- Streamlining tax exemptions.
- Reinforcing fiscal governance and transparency.
- Reforming the fuel market and fuel price structure.
- De-risking crypto-related projects.
- Continued cooperation with regional institutions on the Sango project and other crypto-related projects to ensure consistency with the CEMAC legal framework.
- Continued financial and technical support from development partners deemed critical; given CAR’s high risk of debt distress and limited revenue base, continued efforts to mobilize grants are emphasized.
- Close cooperation with international partners on humanitarian assistance is essential.
Authorities’ recent policy responses and program rationale
- Authorities responded to risks to macroeconomic stability and to the financing shortfall from the 2021 suspension of donor-related budget support by:
- Adjusting spending.
- Streamlining fuel subsidies.
- Postponing the clearance of domestic arrears.
- The government requested Fund financial assistance to address balance of payments needs.
- The ECF arrangement is intended to free up fiscal space, catalyze donor support for essential public services, and provide a framework for implementing domestic reforms to reduce humanitarian risks and strengthen sustainability of public finances.
- The program will help sustain priority spending on basic public services, including health and education.
Selected economic and financial indicators, 2020–2027 (annual percentage change; unless otherwise indicated)
- GDP at constant prices: 2020: 1.0; 2021: 0.5; 2022: 2.2; 2023: 3.0; 2024: 3.8; 2025: 3.7; 2026: 3.7
- GDP per capita at constant prices: 2020: -0.8; 2021: -1.0; 2022: -1.5; 2023: 0.2; 2024: 1.9; 2025: 1.6; 2026: 1.5
- GDP at current prices: 2020: 2.8; 2021: 4.3; 2022: 6.9; 2023: 9.1; 2024: 7.2; 2025: 6.4; 2026: 6.3; 2027: 6.2
- GDP deflator: 2020: 3.3; 2021: 6.7; 2022: 4.1; 2023: 2.5; 2024: 2.4
- CPI (annual average): 2020: 0.9; 2021: 5.8; 2022: 2.7
- CPI (end-of-period): 2020: 1.8; 2021: 7.9; 2022: 4.4; 2023: 2.9
- Broad money: 2020: 11.5; 2021: 14.6; 2022: 3.6; 2023: 4.0; 2024: 5.6; 2025: 3.2
- Credit to the economy: 2020: 8.5; 2021: -2.2; 2022: 0.6; 2023: 8.0; 2024: 11.9; 2025: 9.6; 2026: 9.5
- Export volume of goods: 2020: 9.4; 2021: -5.3; 2022: 2.6; 2023: 9.0; 2024: 5.2; 2025: 5.4; 2026: 8.9
- Import volume of goods: 2020: 7.3; 2021: -11.5; 2022: -5.6; 2023: 10.1; 2024: 4.8; 2025: 9.2
- Terms of trade: 2020: -16.2; 2021: -9.4; 2022: 12.4; 2023: 10.3; 2024: 7.8; 2025: 10.2
- Gross national savings (percent of GDP): 2020: 10.7; 2021: 4.6; 2022: 8.2; 2023: 10.6; 2024: 12.5; 2025: 13.9
- Gross domestic savings (percent of GDP): 2020: -0.5; 2021: -2.5; 2022: -5.4; 2023: -2.1; 2024: 1.3; 2025: 2.1; 2026: 3.5
- Consumption (percent of GDP): 2020: 100.5; 2021: 102.5; 2022: 105.4; 2023: 102.1; 2024: 100.8; 2025: 98.7; 2026: 97.9; 2027: 96.5
- Gross investment (percent of GDP): 2020: 18.9; 2021: 15.7; 2022: 14.9; 2023: 15.3; 2024: 16.0; 2025: 17.5; 2026: 17.8; 2027: 18.5
- External current account balance with grants (percent of GDP): 2020: -8.2; 2021: -11.1; 2022: -13.0; 2023: -8.7; 2024: -7.9; 2025: -6.9
- External current account balance without grants (percent of GDP): 2020: -14.9; 2021: -15.0; 2022: -12.3; 2023: -11.4; 2024: -10.8; 2025: -10.3; 2026: -9.6
- Overall balance of payments: 2020: -0.9; 2021: -8.0; 2022: -2.9; 2023: -2.3
- Central government finance — Total revenue (including grants, percent of GDP): 2020: 21.8; 2021: 13.7; 2022: 12.3; 2023: 13.8; 2024: 14.5; 2025: 16.3; 2026: 17.7; 2027: 17.6
- Of which: domestic revenue (percent of GDP): 2020: 8.8; 2021: 9.9
- Overall balance excluding grants (percent of GDP): 2020: -16.0; 2021: -10.9; 2022: -9.9; 2023: -8.9; 2024: -8.1; 2025: -7.1
- Overall balance including grants (percent of GDP): 2020: -6.0; 2021: -3.0; 2022: -2.4; 2023: -1.7; 2024: 0.1
- Domestic primary balance (percent of GDP): 2020: -6.6; 2021: -5.1; 2022: -3.6; 2023: -2.6; 2024: -1.6; 2025: -1.4
- Public sector debt (percent of GDP): 2020: 43.4; 2021: 47.6; 2022: 51.9; 2023: 50.5; 2024: 49.6; 2025: 48.5; 2026: 45.8; 2027: 43.3
- Of which: domestic debt (percent of GDP): 2020: 13.2; 2021: 18.4; 2022: 18.8; 2023: 18.6; 2024: 17.0; 2025: 15.6
- Of which: external debt (percent of GDP): 2020: 34.0; 2021: 34.4; 2022: 34.2; 2023: 32.0; 2024: 30.8; 2025: 29.9; 2026: 28.9; 2027: 27.7
- Memorandum items:
- GDP per capita (US dollars): 2020: 495; 2021: 525; 2022: 490; 2023: 534; 2024: 557; 2025: 578; 2026: 599; 2027: 619
- Nominal GDP (CFAF billions): 2020: 1,373; 2021: 1,432; 2022: 1,532; 2023: 1,671; 2024: 1,791; 2025: 1,906; 2026: 2,025; 2027: 2,151
Policy implications and outlook
- The IMF highlights the need for deep fiscal reforms, prioritizing strengthened customs and tax administration and streamlined tax exemptions to increase domestic revenue mobilization and expand the envelope for social spending.
- The program’s success depends on continued donor financing, technical support, and mobilization of grants given CAR’s high risk of debt distress and limited revenue base.
- Implementation of reforms agreed among CEMAC regional institutions, including measures aimed at supporting an increase in regional net foreign assets, is stated as critical to the program’s success.
IMF Communications Department press release, April 27, 2023 — Press Release No. 23/129.