{
  "title": "Frequently Asked Questions on Central African Republic",
  "sourceUrl": "https://www.imf.org/en/countries/caf/central-african-republic-qandas",
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  "summary": "Questions and answers on Central African Republic's IMF program",
  "sections": [
    {
      "heading": "IMF-supported program objectives and reform areas",
      "content": "- The IMF-supported program aims to:\n  - enhance domestic revenue mobilization (DRM), including through the fuel market reforms,\n  - improve public financial management (PFM),\n  - overhaul public debt management, and\n  - adopt governance reforms.\n- DRM measures include:\n  - digitalizing customs and tax offices,\n  - reducing customs and VAT exemptions,\n  - collecting tax arrears, and\n  - centralizing revenue in the Treasury Single Account.\n- PFM efforts focus on:\n  - budget planning,\n  - spending controls—particularly on extraordinary procedures, and\n  - cash management.\n- Governance reforms target:\n  - anti-corruption legislation,\n  - enhancing the court of audit, and\n  - strengthening the financial intelligence unit.\n- Bolstering the fiscal position and implementing the upcoming medium-term debt strategy are identified as key to safeguarding debt sustainability."
    },
    {
      "heading": "Fuel market crisis, rationale for reforms, and program linkages",
      "content": "- Availability of fairly priced fuel is characterized as essential for:\n  - businesses and households,\n  - government revenue,\n  - economic activity and the cost of living,\n  - domestic revenue mobilization, public finances, and public debt sustainability.\n- The government requested Fund financing in the context of a major crisis in the fuel market: prolonged fuel shortages that brought economic activity to a standstill and caused a collapse of tax revenue.\n- The reform of the fuel market was an important part of program discussions initiated in November 2022 and concluded with approval of the ECF-arrangement in April 2023.\n- The program sets quarterly targets for domestic revenue collection that depend in part on improved tax collection from the fuel sector."
    },
    {
      "heading": "Action Plan for fuel-sector reform: objectives and key elements",
      "content": "- The February 2023 IMF technical assistance mission developed an Action Plan with three objectives:\n  - i) enhancing fuel price structure transparency,\n  - ii) improving predictability of fuel revenues by capping imports margins (like the distributors’ margins), and\n  - iii) centralizing fuel import processes for efficiency and economies of scale.\n- Key elements of the Action Plan included:\n  - indexation of the price structure around an international reference price (instead of importers’ declarations), and\n  - adopting a public and transparent auction system for fuel imports.\n- Follow-up technical assistance reviewed the new market structure, resulting in an updated Action Plan and the President’s signature of decree N°24.157 on June 17, 2024, which mandates:\n  - the online publication of price structures in a more transparent and predictable manner with the breakdown of every line.\n- Downloadable price structures: June 2024, July 2024, August 2024, November 2024.\n- The government has committed to address ongoing implementation challenges."
    },
    {
      "heading": "IMF stance on pump prices and monopoly importer",
      "content": "- No, the IMF is not pushing CAR to increase pump prices.\n- The IMF notes CAR’s situation differs from neighboring oil-exporting countries and that pump prices in CAR are already higher than in those countries and “among the highest in the world.”\n- The Fund’s recommendations for CAR would likely be to reduce prices at the pump as soon as:\n  - the margins made on imports are lowered to reasonable levels, and\n  - fiscal revenues have significantly increased.\n- The decision to have a monopoly fuel importer is a sovereign choice by the government.\n- What is important, per the program, is that every actor abide by the new price structure required by Presidential decree 24.157 and comply with sector laws and regulations (examples listed: having an import license and a local registration, being a taxpayer, 80 percent imported through the river, etc.).\n- Ongoing discussions on SOCASP’s ownership are not part of the policy recommendations under the program."
    },
    {
      "heading": "Anticipated benefits from fuel-market reforms",
      "content": "- Expected outcomes for businesses, households, and government revenues:\n  - more stable fuel supply,\n  - a more transparent fuel market,\n  - reduced reliance on informal imports,\n  - increased fiscal revenues,\n  - curbed energy price increases,\n  - reduced costs for businesses and households supporting robust economic growth,\n  - increased fiscal space to address essential social spending needs,\n  - better combat against fraud in the fuel sector, and\n  - increased investments in critical infrastructures.\n- Enhanced governance in the fuel sector is expected to contribute to a more predictable business environment, supporting broader economic stability and growth."
    },
    {
      "heading": "Current status, impacts, and key statistics",
      "content": "- Improvements since the 2022 crisis:\n  - fuel supply has improved markedly, especially in 2024, eliminating most shortages.\n- Ongoing problems:\n  - fuel prices at the pump remain high—“ranking among the highest in globally”,\n  - informal fuel imports continue to thrive,\n  - volatility of fuel revenue causes acute liquidity pressures and makes it challenging to finance the budget.\n- Fiscal revenue contribution from the fuel sector:\n  - collapsed from around 20-25 percent in 2020-21 to an estimated 9 percent in 2024.\n- Drivers of revenue volatility include insufficient backup stocks due to repeated failures of the river campaign, including in 2024.\n- Historically, 80 percent of fuel imports have come through the Ubangi River; reliance on the road corridor (Limbe-Bangui) is described as inefficient and accelerates deterioration of main road infrastructure.\n- Assessment: some improvements observed, but performance remains “very far from the historical performances observed before 2022.”"
    },
    {
      "heading": "Four main reasons for the collapse of fiscal revenues from the fuel sector",
      "content": "- First: imported volumes for local consumption (excl. security) have significantly decreased, partly because of successive failures of river campaigns.\n- Second: high pump prices have created an incentive for smuggling cheap fuel from neighboring countries to supply the informal market, eroding the tax base.\n- Third: reliance on importers’ price declarations for fuel imports instead of a predefined rule indexing import prices to an international reference price (Platts) has opened the door for major markups, raising import costs and causing the “soutien / reversement Etat” to become negative (i.e., a subsidy to consumers that the government pays to the importer). This practice has had markedly harmful effects on fuel revenues since the 2022 crisis.\n- Fourth: major changes in the market structure—including the entry and exit of some actors—have resulted in large tax arrears for the government."
    }
  ],
  "bullets": [
    "The IMF-supported program aims to:",
    "DRM measures include:",
    "PFM efforts focus on:",
    "Governance reforms target:",
    "Bolstering the fiscal position and implementing the upcoming medium-term debt strategy are identified as key to safeguarding debt sustainability.",
    "Availability of fairly priced fuel is characterized as essential for:",
    "The government requested Fund financing in the context of a major crisis in the fuel market: prolonged fuel shortages that brought economic activity to a standstill and caused a collapse of tax revenue.",
    "The reform of the fuel market was an important part of program discussions initiated in November 2022 and concluded with approval of the ECF-arrangement in April 2023.",
    "The program sets quarterly targets for domestic revenue collection that depend in part on improved tax collection from the fuel sector.",
    "The February 2023 IMF technical assistance mission developed an Action Plan with three objectives:",
    "Key elements of the Action Plan included:",
    "Follow-up technical assistance reviewed the new market structure, resulting in an updated Action Plan and the President’s signature of decree N°24.157 on June 17, 2024, which mandates:",
    "Downloadable price structures: June 2024, July 2024, August 2024, November 2024.",
    "The government has committed to address ongoing implementation challenges.",
    "No, the IMF is not pushing CAR to increase pump prices.",
    "The IMF notes CAR’s situation differs from neighboring oil-exporting countries and that pump prices in CAR are already higher than in those countries and “among the highest in the world.”",
    "The Fund’s recommendations for CAR would likely be to reduce prices at the pump as soon as:",
    "The decision to have a monopoly fuel importer is a sovereign choice by the government.",
    "What is important, per the program, is that every actor abide by the new price structure required by Presidential decree 24.157 and comply with sector laws and regulations (examples listed: having an import license and a local registration, being a taxpayer, 80 percent imported through the river, etc.).",
    "Ongoing discussions on SOCASP’s ownership are not part of the policy recommendations under the program.",
    "Expected outcomes for businesses, households, and government revenues:",
    "Enhanced governance in the fuel sector is expected to contribute to a more predictable business environment, supporting broader economic stability and growth.",
    "Improvements since the 2022 crisis:",
    "Ongoing problems:",
    "Fiscal revenue contribution from the fuel sector:",
    "Drivers of revenue volatility include insufficient backup stocks due to repeated failures of the river campaign, including in 2024.",
    "Historically, 80 percent of fuel imports have come through the Ubangi River; reliance on the road corridor (Limbe-Bangui) is described as inefficient and accelerates deterioration of main road infrastructure.",
    "Assessment: some improvements observed, but performance remains “very far from the historical performances observed before 2022.”",
    "First: imported volumes for local consumption (excl. security) have significantly decreased, partly because of successive failures of river campaigns.",
    "Second: high pump prices have created an incentive for smuggling cheap fuel from neighboring countries to supply the informal market, eroding the tax base.",
    "Third: reliance on importers’ price declarations for fuel imports instead of a predefined rule indexing import prices to an international reference price (Platts) has opened the door for major markups, raising import costs and causing the “soutien / reversement Etat” to become negative (i.e., a subsidy to consumers that the government pays to the importer). This practice has had markedly harmful effects on fuel revenues since the 2022 crisis.",
    "Fourth: major changes in the market structure—including the entry and exit of some actors—have resulted in large tax arrears for the government."
  ],
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  "generatedAtUtc": "2026-09-30T19:06:01.506Z"
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