IMF Reaches Staff-Level Agreement on the First Review of the Extended Credit Facility Arrangement with Central African Republic

IMF News, September 21, 2023

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Canonical URL: IMF Reaches Staff-Level Agreement on the First Review of the Extended Credit Facility Arrangement with Central African Republic

A team from the International Monetary Fund (IMF) led by Mr. Albert Touna Mama visited Bangui from August 29 to September 9, 2023 to conduct a mission in connection with the first review of the CAR’s program supported by the IMF’s Extended Credit Facility (ECF) arrangement approved in April 2023 (see Press Release No. 23/129).
Press Release No. 23/322 records the mission conclusion and staff statement.
The Central African Republic (CAR) authorities and IMF staff have reached agreement on the policies underpinning the first review of the program supported by the Extended Credit Policy (ECF) arrangement.

"The economic situation in Central African Republic (CAR) is stabilizing."
Growth projections:
- 2023 growth revised downward from 2.2 percent to 1 percent.
- Growth projected to accelerate to 1.5 percent in 2024.
- Growth projected to reach 2.5 percent in 2025.
Inflation has stayed at high levels, driven by fuel and food prices.
Specific sectors impacted: manufacturing industry, forestry, and transportation.
Humanitarian emergency concerns highlighted, particularly in the prefectures of Vakaga and Bamingui-Bangoran where the Sudanese crisis is causing severe supply difficulties.

The fuel market is beginning to stabilize after recurrent disruptions that exacerbated the country’s challenges.
Recent downturn in pump fuel prices has helped provide relief and encouraged formal sales at gas stations.
The outlook for budget financing has improved significantly, evidenced by the successful outcome of the recent domestic syndication operation.
Growth outlook and revenue mobilization plans depend crucially on the successful outcome of the campaign to import fuel via the Ubangi River, which experienced a major launch delay.
All necessary steps must be taken to remedy the fuel import delay to prevent further fuel shortages during the first half of 2024.

Program implementation has been broadly satisfactory.
All the reforms planned for end-October 2023 are being implemented.
The domestic revenue target for end-June 2023 under the program has been surpassed.
However:
- The limits for the primary deficit have been overshot, reflecting acute social pressures.
- The limits for net domestic financing have been overshot, illustrating uncertainties in the composition of budget financing.
The authorities have adopted corrective measures to mitigate any risk of future budget overruns.

The authorities intend to achieve significant improvements in revenue mobilization throughout FY 2024, increasing the government’s own revenues by approximately CFAF 20 billion.
Major reforms in progress include:
- Digitalization of tax and customs agencies.
- Reform of administrative fees and charges (menues-recettes).
The adoption of the new Organic Law on the Prevention and Punishment of Corruption is cited as an important step forward in improving public financial management.
Authorities are committed to implementing the new law’s provisions and strengthening institutions such as the Audit Office and the Financial Intelligence Unit equivalent (ANIF).
The IMF staff noted that implementation of tax measures introduced in the 2023 budget law should be improved, as should the monitoring of the various reforms currently being implemented.

The IMF delegation met with President Touadéra, Prime Minister Moloua, Finance and Budget Minister Ndoba, Minister of Energy Piri, Minister of Mines Beltoungou, BEAC National Director Chaïbou, other senior officials, as well as representatives of the private sector and the community of development partners.
The mission thanked the CAR authorities for their warm welcome and the atmosphere of candor and openness in discussions.

IMF Communications Department — Press Release No. 23/322, September 21, 2023