Press Release No. 11/278

Press Release No. 11/278
July 13, 2011

A mission of the International Monetary Fund (IMF), led by Norbert Toé, visited the Central African Republic during June 30-July 13, 2011 to review recent economic developments and conduct discussions on a medium-term program that could be supported by an arrangement under the Extended Credit Facility (ECF).

The mission met with the Prime Minister, Faustin Archange Touadéra; the first deputy President of the National Assembly, Laurent Ngon-Baba; Minister of State for Finance and Budget, Sylvain Ndoutingaï; Minister of State for Planning and Economy, Sylvain Maliko; National Director of the Bank of Central African States (BEAC), Camille Kéléfio; other senior government and BEAC officials, as well as representatives of civil society organizations, the private sector and the donor community.

At the conclusion of the visit, Mr. Toé issued the following statement:

“Economic activity in 2010 recovered from the 2009 slowdown, thanks in part to a rebound of agricultural production. Real gross domestic product (GDP) growth is estimated at 3.3 percent, compared to 1.7 percent in 2009. Average inflation fell to 1.5 percent in 2010, from 3.5 percent in 2009, reflecting increased domestic food production. Despite a recovery of forestry and diamond exports, the external current account position weakened, reflecting a deterioration in the terms of trade due to high world oil prices. Owing to a weakening in the control of budget execution due to the prolonged general elections process, significant fiscal slippages led to the accumulation of domestic and external payments arrears.”

“The authorities recognized the seriousness of the budgetary slippages, and committed to taking immediate corrective measures. These include an operational liquidity management committee; the strict adherence to the established expenditure process, including the effective use of the computerized information system (Gesco); full documentation of all off-budgetary expenditures; and strengthening the monitoring of macroeconomic developments and structural reforms. The authorities also intend to hold a national forum on the state of public finances, which will recommend additional measures to bring budget execution back on track, in line with the medium-term reform program of public finances approved by the government in July 2010 and supported by key donors.”

“Depending on progress in the implementation of the corrective measures, an IMF team could visit Bangui to continue discussions on a new ECF-supported program. Such a visit would be combined with the 2010 Article IV consultation in late 2011.”