IMF Staff Concludes Visit to Central African Republic

IMF News, July 24, 2024

Source details

IMF team led by Mr. Albert Touna Mama visited Bangui from July 10 to 17, 2024.
Objective: take stock of recent macroeconomic developments, implementation of structural reforms, and discuss major budget allocations for the upcoming revised 2024 finance law.
Program context: work related to the CAR program supported by the Extended Credit Facility (ECF).

Domestic revenue mobilization continued to improve, "reaching a record level of CFAF 80 billion during the first half of this year."
Prospects for budget financing continue to improve, aided by ongoing discussions with technical and financial partners that could lead to new budget support programs.
Fiscal reform momentum noted, illustrated by strategic orientations from a recent seminar on digital reforms organized by the Ministry of Finance and Budget.

Short-term operational challenge: the country's fuel supply campaign via the Ubangi River is still struggling to get started.
- The mission warned that "a failure of this campaign, for the third consecutive year, would contribute to slowing down economic activity, hampering government revenues, and delaying macroeconomic stabilization by at least two semesters given CAR’s import structure."
Fiscal management challenge: control of budgetary risks, particularly weaknesses in budget planning and execution.
- These risks "have already led to significant overspending during the first half of this year."
The upcoming revised budget is presented as an opportunity to adapt to the economic situation and maintain a balanced budget.

Macroeconomic projections anchored on gradual acceleration of economic activity:
- 1.4% in 2024
- 2.9% in 2025
Continued realization of these projections depends crucially on:
- the country's fuel supply
- effective implementation of the reforms planned under the ECF program

Continue implementing public finance management and governance reforms under the ECF program as the best path to medium-term macroeconomic stabilization.
Prioritize actions to secure fuel supply via the Ubangi River to prevent a setback that could delay stabilization by at least two semesters.
Strengthen budget planning and execution to control budgetary risks and prevent further overspending.
Use the upcoming revised 2024 budget to take appropriate measures to adapt to the economic situation and maintain a balanced budget.
Continue engagement with technical and financial partners to secure budget financing, including potential new budget support programs.

IMF delegation met with President Touadéra, Prime Minister Moloua, First Vice-President of the National Assembly Ngamana, Minister of Finance and Budget Ndoba, BEAC National Director Chaïbou, other senior officials, and representatives of the development partner community.
The mission expressed thanks to the Central African authorities "for their warm welcome, openness and frankness in the discussions."

Source: Press Release No. 24/287, July 24, 2024, IMF.