{
  "title": "IMF Survey: Central African Republic's Reforms Enter Crucial Phase",
  "publication": "IMF News, January 21, 2010",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/socar012010a",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/socar012010a",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/socar012010a/index.md",
  "summary": "Against the odds, the Central African Republic is making remarkable progress toward peace, economic development, and structural reform. The country has achieved modest economic growth since open conflict ended in 2004, and income per capita has started to recover after years of decline.",
  "authors": [
    "Werner Keller IMF African Department January"
  ],
  "publishDate": "2010-01-21",
  "sections": [
    {
      "heading": "Economic health check",
      "content": "- The Central African Republic is one of Africa’s least known and most overlooked countries.\n- It is the only nonoil-producing country of the Central African Economic and Monetary Community (CEMAC), landlocked between troubled Sudan, Chad, and the Democratic Republic of Congo.\n- The population of less than 5 million—among the world’s poorest—occupies an area one and a quarter times that of France that is endowed with rich natural resources and fertile land.\n- Political instability since independence, deficient infrastructure, and underdeveloped human capital are negatively affecting economic performance.\n- The country has achieved modest economic growth since open conflict ended in 2004, and income per capita has started to recover after years of decline."
    },
    {
      "heading": "External shocks and macro performance",
      "content": "- A series of domestic and external shocks in 2008 and early 2009 included unstable power supply, surging prices for imports, and low demand and prices for export goods as a result of the global recession.\n- Despite these shocks, the government has made good progress with its fiscal program of mobilizing domestic revenues, controlling spending, and clearing arrears.\n- The Central African Republic received full debt relief from the IMF and World Bank in June 2009 by reaching the final, completion-point stage of the Heavily Indebted Poor Countries Initiative.\n- The country is well on the way to concluding its current Poverty Reduction and Growth Facility program in June 2010—the first time it would successfully conclude a three-year program with the IMF, after two successful Emergency Post-Conflict Assistance programs.\n- A modest recovery from last year’s shocks is under way, supported by prudent macroeconomic management policies and structural reforms."
    },
    {
      "heading": "Encouraging results: peace, stability, and public finance",
      "content": "- Establishing peace and security\n  - The “inclusive political dialogue” concluded in December 2008 led to some participation in government by the political opposition.\n  - The domestic peace process is implemented as part of the disarmament, demobilization, and reintegration program and should open the way for general elections in 2010.\n  - Some external financing from the United Nations and CEMAC has been secured; more financial and logistical help from other donors might be required.\n  - The government intends to follow up with comprehensive reform of the security sectors, for which financing still has to be identified.\n- Maintaining economic stability\n  - Real GDP growth is projected to increase from 2 percent in 2009 to 3½ percent in 2010.\n  - Inflation is expected to slow to 2¼ percent after peaking at close to 15 percent at end-2008.\n  - World demand for the country’s principal exports—wood products and diamonds—declined significantly and may take time to pick up.\n  - The current account balance is expected to improve in 2010 as aid flows rise.\n  - The tax-to-GDP ratio—still one of the lowest in the world—continues to head upward; insufficient resources, particularly grants, make it hard to implement a poverty reduction strategy.\n- Improving public financial management\n  - Fiscal performance was broadly kept on track under the current IMF loan program despite recent shocks.\n  - The government increased domestic revenue mobilization efforts, controlled spending, and cleared more domestic arrears than initially planned.\n  - Fiscal policies allowed for a moderate fiscal stimulus by maintaining spending in the face of lower-than-expected revenues while maintaining prudent fiscal policies given limited resource availability.\n  - Fiscal structural reforms have progressed and provide a better basis for further results."
    },
    {
      "heading": "Better access to credit — constraints and policy actions",
      "content": "- Financial intermediation is among the lowest in the world; lack of adequate financial institutions is a major constraint for private sector development.\n- Bank lending activities are constrained by legal and regulatory weaknesses and the short-term structure of deposits.\n- Bank credit is mainly channeled to short-term operations and is seldom offered to small and medium-size enterprises; bank loan portfolios are of poor quality.\n- Large public deficit financing operations have crowded out private sector borrowing.\n- Local banks’ contributions to growth could be boosted by action to:\n  - Improve the legal and court systems to guarantee property ownership and speed up resolution of business conflicts and enforcement of collateral\n  - Strengthen bank capital and provisioning for bad loans and continue reducing government demand for bank credit\n  - Foster payment of taxes and government outlays through the banking system\n  - Pay back loans to the government, as envisaged under the government’s IMF-supported program\n  - Adopt a national strategy for microfinance development and establish licensing of certified public accountants"
    },
    {
      "heading": "Donor relations, infrastructure, and investment climate",
      "content": "- Bilateral and multilateral donors excluding the IMF provide only about 4½ percent of GDP—substantially less than for other post-conflict and low-income countries.\n- More efforts by the government are needed to improve communication and cooperation to foster relations of mutual confidence and support.\n- Donors are increasingly interested in contributing more actively to political and economic consolidation, particularly to the strengthening of public management capacity; major multi-year programs of coordinated technical assistance are being explored.\n- Local unrest, decaying infrastructure, deficient economic integration, a weak legal system, and governance problems hamper social development and private investment and could be serious long-term obstacles to growth.\n- To address these constraints and unlock economic potential, the government must rely on external partners and pursue consistent and transparent sectoral policies over the long term.\n- Increasing public investment, strengthening project and policy implementation capacity, and investing in human capital need further attention."
    },
    {
      "heading": "New IMF-backed loan program and fiscal specifics",
      "content": "- The authorities are committed to sustaining reform momentum; the IMF stands ready to provide more economic policy advice and technical assistance.\n- The authorities have expressed interest in a successor arrangement to the current loan program.\n- The 2010 fiscal program is designed to support domestic demand and consolidate recovery gains.\n  - Domestic revenue is expected to rise to 10.6 percent of GDP, implying an additional collection effort of about 0.3 percentage points of GDP.\n  - Expenditure is projected to increase moderately, mainly as a result of spending on the peace process and capital expenditure.\n  - This will increase the primary domestic deficit to 1.2 percent of GDP, up from 0.4 percent in 2009.\n- Structural fiscal reforms remain targeted to supporting the macrofiscal framework through:\n  - Better public financial management\n  - Reduced customs exemptions\n  - Streamlined procedures to refund value-added tax\n  - Strengthened tax audits\n- Over the medium term, policy reform should focus on measures to accelerate economic growth and strengthen competitiveness while keeping debt sustainable:\n  - Targeted alleviation of infrastructure bottlenecks and security concerns\n  - More private investment and easier private sector access to credit\n  - Greater efforts to mobilize domestic revenues, prudent debt management, and increased donor support on concessional terms to meet social development and security needs\n\nIMF Survey: Central African Republic's Reforms Enter Crucial Phase — By Werner Keller, IMF African Department, January 21, 2010\n\n---\n\n Content in this bundle\n\n- Cr1021pdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Country Focus\n- Press release\n- Central African Republic and IMF\n- Africa’s recovery signs\n- Africa’s new growth engines\n- Africa regional outlook\n- (CEMAC)\n- Heavily Indebted Poor Countries Initiative\n- Emergency Post-Conflict Assistance\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar012010a"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2015/09/28/04/53/socar012010a/index.md)",
    "[Structured JSON version](/en/news/articles/2015/09/28/04/53/socar012010a/index.json)",
    "[Bundle manifest](/en/news/articles/2015/09/28/04/53/socar012010a/bundle-manifest.json)",
    "Authors: Werner Keller IMF African Department January",
    "Published: January 21, 2010",
    "The Central African Republic is one of Africa’s least known and most overlooked countries.",
    "It is the only nonoil-producing country of the Central African Economic and Monetary Community (CEMAC), landlocked between troubled Sudan, Chad, and the Democratic Republic of Congo.",
    "The population of less than 5 million—among the world’s poorest—occupies an area one and a quarter times that of France that is endowed with rich natural resources and fertile land.",
    "Political instability since independence, deficient infrastructure, and underdeveloped human capital are negatively affecting economic performance.",
    "The country has achieved modest economic growth since open conflict ended in 2004, and income per capita has started to recover after years of decline.",
    "A series of domestic and external shocks in 2008 and early 2009 included unstable power supply, surging prices for imports, and low demand and prices for export goods as a result of the global recession.",
    "Despite these shocks, the government has made good progress with its fiscal program of mobilizing domestic revenues, controlling spending, and clearing arrears.",
    "The Central African Republic received full debt relief from the IMF and World Bank in June 2009 by reaching the final, completion-point stage of the Heavily Indebted Poor Countries Initiative.",
    "The country is well on the way to concluding its current Poverty Reduction and Growth Facility program in June 2010—the first time it would successfully conclude a three-year program with the IMF, after two successful Emergency Post-Conflict Assistance programs.",
    "A modest recovery from last year’s shocks is under way, supported by prudent macroeconomic management policies and structural reforms.",
    "Establishing peace and security",
    "Maintaining economic stability",
    "Improving public financial management",
    "Financial intermediation is among the lowest in the world; lack of adequate financial institutions is a major constraint for private sector development.",
    "Bank lending activities are constrained by legal and regulatory weaknesses and the short-term structure of deposits.",
    "Bank credit is mainly channeled to short-term operations and is seldom offered to small and medium-size enterprises; bank loan portfolios are of poor quality.",
    "Large public deficit financing operations have crowded out private sector borrowing.",
    "Local banks’ contributions to growth could be boosted by action to:",
    "Bilateral and multilateral donors excluding the IMF provide only about 4½ percent of GDP—substantially less than for other post-conflict and low-income countries.",
    "More efforts by the government are needed to improve communication and cooperation to foster relations of mutual confidence and support.",
    "Donors are increasingly interested in contributing more actively to political and economic consolidation, particularly to the strengthening of public management capacity; major multi-year programs of coordinated technical assistance are being explored.",
    "Local unrest, decaying infrastructure, deficient economic integration, a weak legal system, and governance problems hamper social development and private investment and could be serious long-term obstacles to growth.",
    "To address these constraints and unlock economic potential, the government must rely on external partners and pursue consistent and transparent sectoral policies over the long term.",
    "Increasing public investment, strengthening project and policy implementation capacity, and investing in human capital need further attention.",
    "The authorities are committed to sustaining reform momentum; the IMF stands ready to provide more economic policy advice and technical assistance.",
    "The authorities have expressed interest in a successor arrangement to the current loan program.",
    "The 2010 fiscal program is designed to support domestic demand and consolidate recovery gains.",
    "Structural fiscal reforms remain targeted to supporting the macrofiscal framework through:",
    "Over the medium term, policy reform should focus on measures to accelerate economic growth and strengthen competitiveness while keeping debt sustainable:",
    "[Cr1021pdf (PDF)](/-/media/websites/imf/imported/external/pubs/ft/scr/2010/_cr1021pdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Country Focus](https://www.imf.org/en/news/country-focus)",
    "[Press release](https://www.imf.org/external/np/sec/pn/2010/pn1001.htm)",
    "[Central African Republic and IMF](https://www.imf.org/external/country/caf/index.htm)",
    "[Africa’s recovery signs](https://www.imf.org/external/pubs/ft/survey/so/2010/CAR010710A.htm)",
    "[Africa’s new growth engines](https://www.imf.org/external/pubs/ft/survey/so/2009/CAR112309A.htm)",
    "[Africa regional outlook](https://www.imf.org/external/pubs/ft/reo/2009/AFR/eng/sreo1009.htm)",
    "[(CEMAC)](https://www.imf.org/external/pubs/ft/fandd/2006/12/country.htm)",
    "[Heavily Indebted Poor Countries Initiative](https://www.imf.org/external/np/exr/facts/hipc.htm)",
    "[Emergency Post-Conflict Assistance](https://www.imf.org/external/np/exr/facts/conflict.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "related": [
    {
      "title": "Cr1021pdf",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported/external/pubs/ft/scr/2010/_cr1021pdf.pdf",
      "binary": {
        "path": "/-/media/websites/imf/imported/external/pubs/ft/scr/2010/_cr1021pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/news/articles/2015/09/28/04/53/socar012010a/index.md",
    "json": "/en/news/articles/2015/09/28/04/53/socar012010a/index.json",
    "bundleManifest": "/en/news/articles/2015/09/28/04/53/socar012010a/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-27T06:48:32.601Z"
}