Washington, DC
: An International Monetary Fund (IMF) staff team led by Mr. Oral Williams
visited Bangui from July 7–15 2022, to discuss the second review of the
Central African Republic’s
Staff-Monitored Program
(SMP), which was
approved in December 2021
.
At the end of the mission, Mr. Williams issued the following statement:
“The economy, after showing signs of a promising recovery, is experiencing
a downturn in the face of rising food and fuel import prices, fuel
shortages, and higher shipping costs. “
“The main risks to the outlook include lower growth owing to fuel
shortages, higher inflation, and shortfalls in budget support. The draw
down on the IMF’s SDR allocation (CFAF 85 billion/6 percent of GDP) helped
cushion the adverse impact of recent shocks by ensuring the budget
implementation remained on track. Nevertheless, the authorities have had to
embark on further fiscal consolidation in response to the shortfalls in
budget support and rising food and fuel import prices. Given the difficult
context, sustained efforts are needed to ensure suppliers are paid on time
to sustain their activity and limit layoffs.
“IMF staff and the Central African Republic authorities discussed the
progress that has been made in the implementation of the SMP, which, at the
authorities’ request has now been extended by three months to end-September
2022. This extension will give the authorities more time to secure
financing assurances with other development partners and allow them to
pursue ongoing efforts to harmonize C.A.R.’s crypto assets law with
regional commitments at the CEMAC level.
“The execution of the 2022 budget appears to be broadly in line with the
SMP commitments, with key end-March budget targets being met. In light of
the multiple shocks the economy is experiencing, the mission and the
authorities explored ways to ensure the smooth implementation of the 2022
budget. This would form the basis for the submission of a revised budget to
parliament.
“The authorities have requested capacity development from the IMF to
mitigate the impact of higher international fuel prices and to design
effective social safety nets while at the same time safeguarding fiscal
revenues.
“Further progress was made on the reform front including the submission to
parliament of a new anti-corruption law and verifying the accuracy of
importers’ declarations at customs. Initial steps for conducting a Public
Expenditure and Financial Accountability Assessment (PEFA) have also
started and the monthly Treasuring Committee meetings with the
participation of technical and financial partners recently resumed. The
ongoing revisions to the mining code should aim at strengthening the
institutional framework essential for improving the business climate and
leveraging C.A.R.’s rich resource base.
“Looking ahead, concerted efforts to catalyze concessional financing from
development partners will be instrumental in cushioning the impact of
recent shocks, safeguard pro-poor spending, and preserving the provision of
public services.
"The team would like to express its deep appreciation to the authorities
for their excellent collaboration, openness, and hospitality during the
discussions."
The IMF staff team met with President Touadéra, Prime Minister Moloua
President of the National Assembly Sarandji, Finance Minister Ndoba, Mining
Minister Benam-Beltoungou, BEAC National Director Chaïbou, other senior
government officials, development partners, and representatives from the
private sector.
