IMF Staff Concludes Visit to the Central African Republic

IMF News, April 3, 2025

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Mission led by Mr. Albert Touna Mama visited Bangui between March 19 - 28, 2025 as part of the combined third and fourth reviews of the program supported by the Extended Credit Facility (ECF). Discussions will continue virtually over the coming weeks.
Statement issued April 3, 2025 by Mr. Touna Mama at the end of the discussions.
IMF delegation met with President Touadéra, Prime Minister Moloua, Finance Minister Ndoba, the Interministerial Committee in charge of Monitoring and Implementing Reforms in the Fuel Sector chaired by Justice Minister Djoubaye, Economy Minister Filakota, Mining Minister Beltoungou, National Director of BEAC Chaïbou, other senior officials, and representatives from development partners.

Real GDP growth for 2024 revised upward to 1.8%.
Projected real GDP growth of 2.9% in 2025.
Growth drivers identified:
- Rebound in fuel consumption.
- Resilience of telecommunications and forestry.
- Ongoing 4G rollout.
- Expected rebound in the mining sector following the lifting of the diamond embargo.
- Works under the Corridor-13 project.
Downside risks highlighted:
- The partial suspension of US aid.
- Potential election-related pressures.
- Persistent challenges in the energy sector.

Persistent strains on public finances due to structurally low domestic revenues and insufficient budget support from development partners.
Fiscal financing gap context:
- Budget support from development partners resumed since 2023 but remains well below pre-crisis levels: only 2% of GDP vs 5% pre-crisis.
Domestic revenue performance:
- Domestic revenues have grown in recent years but have failed to cover residual financing needs.
Socio-political factors exacerbating budgetary pressures:
- Pressing social and humanitarian needs.
- Election costs.
- Government ambition to boost state presence outside Bangui.
- Partial suspension of US aid may add further strain.
Policy challenge noted: revised 2025 budget discussions will require difficult trade-offs to balance public spending, refine financing strategies, and ensure sustainable public finances.
Call to the international community:
- Request for more highly concessional financing to help mitigate public debt vulnerabilities and reduce the crowding-out of social expenditures by debt service.

Fuel sector underperforms despite improved supply; high pump prices impact household consumption and economic activity.
Government fuel revenue trend:
- Dropped from FCFA 24 billion to FCFA17 billion between 2021 and 2024.
Price and margin issues:
- Pump prices remain about 40% higher relative to pre-crisis levels, even though global fuel prices have largely returned to their pre-crisis levels.
- Authorities committed to auditing the fuel price structure to address cost and margin opacity.
External assistance development:
- Government announced a 30,000-ton fuel grant from the Russian Federation described as a major opportunity to alleviate financial challenges and provide relief to households and businesses.

Progress reported in public finance reforms, particularly:
- Digitalization of the tax administration.
- Recent rollout of telepayment procedures to facilitate and secure taxpayer transactions with customs and the domestic tax administration.
- Encouraging results in limiting exceptional tax exemptions at customs.
- Effective application of import and domiciliation procedures.

Despite notable improvements in several areas, such as security, CAR continues to suffer from persistent strains on public finances stemming from low domestic revenues and reduced budget support since 2021.
The revised 2025 budget will need to make difficult trade-offs to ensure sustainable public finances.
Staff reiterates the call for increased international support, especially highly concessional financing, to stabilize public finances and protect social spending.
The fuel price structure audit is recommended to address opacity in costs and margins.
Continued implementation of digitalization and revenue administration reforms is commended and encouraged.

IMF Staff Concludes Visit to the Central African Republic — April 3, 2025