{
  "title": "The Sahel, Central African Republic Face Complex Challenges to Sustainable Development",
  "publication": "IMF News, November 16, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development",
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  "summary": "Conflict and external shocks are amplifying obstacles to economic development.",
  "publishDate": "2023-11-16",
  "sections": [
    {
      "heading": "Key challenges and context",
      "content": "- Countries covered: Burkina Faso, Chad, Mali, Mauritania, Niger (the Sahel), and Central African Republic (CAR).\n- Primary drivers of fragility:\n  - Escalating insecurity and political instability, including military takeovers.\n  - Climate change: more frequent extreme weather events, including historic floods and drought.\n  - Overlapping external economic shocks.\n- Humanitarian impact:\n  - Conflict-related fatalities increased by over 40 percent in 2022.\n  - More than 3 million people fleeing violence in Burkina Faso, Mali, and Niger (UNHCR).\n- Agriculture and food security:\n  - Extreme weather events depress productivity in agriculture, resulting in the loss of income and assets, exacerbating food insecurity, and reinforcing fragility and conflict."
    },
    {
      "heading": "Fiscal and financing constraints",
      "content": "- Security spending:\n  - Reached 3.9 percent of GDP in 2022.\n  - Absorbed 25 percent of fiscal revenues before grants, on average.\n- Public debt and borrowing space:\n  - Public debt as a share of GDP has been increasing steadily since 2011 for Sahel countries.\n  - Projected to average close to 51 percent in 2023.\n  - With financial conditions likely to remain tight, there is limited scope for governments to borrow more.\n- IMF recommendation on financing sources:\n  - Focus on grants, highly concessional financing, domestic revenue mobilization, and private sector development efforts."
    },
    {
      "heading": "Economic outlook and investment needs",
      "content": "- Growth projection:\n  - Economic growth in the region is projected to stabilize at about 4.7 percent over the medium term.\n- Development gap:\n  - Stabilized growth is not sufficient to reverse increasing income divergence with advanced economies; divergence could worsen if terms of trade deteriorate relative to the baseline.\n- Investment requirement:\n  - IMF estimates additional investments of about US$28.3 billion over 2023-26 would be required to fully reignite the development catch-up process in the region."
    },
    {
      "heading": "Donor support and risks",
      "content": "- Donor trends:\n  - Donor support declined by close to 20 percent over the last decade to reach about 4 percent of GDP.\n  - Less than half a percent of GDP was provided in the form of budget support grants in 2022.\n- Constraints to concessional financing:\n  - Political instability and fragile transitions to civilian rule in Burkina Faso, Mali, and Niger make it more difficult to raise concessional financing.\n  - Transparency of public spending is an important issue in CAR.\n- Risks of reduced budget support:\n  - Prolonged reductions present significant risks to essential functions of the state and will worsen social and humanitarian conditions.\n- Policy implication:\n  - Additional donor support, preferably in the form of grants and budget support grants, is essential to address financing priorities flexibly and help lay the foundation for peace and sustainable development."
    },
    {
      "heading": "Policy recommendations for authorities",
      "content": "- Governance and transparency:\n  - Increase budget transparency and accountability.\n  - Enhance governance and anti-corruption frameworks.\n  - Strengthen security expenditure management and internal controls.\n- Domestic resource mobilization:\n  - Boost domestic revenue mobilization to finance spending needs sustainably.\n- Public services and inclusion:\n  - Improve provision of public services in fragile zones.\n  - Implement policies to unlock access to economic opportunities for young people.\n- Climate and resilience:\n  - Adopt policies to foster resilience and climate-smart investments, including in the agricultural sector."
    },
    {
      "heading": "IMF engagement and support",
      "content": "- IMF programs and tools:\n  - Five out of the six countries have an IMF-supported financing arrangement to strengthen macroeconomic frameworks and implement reforms.\n  - Mauritania has requested access to the Resilience and Sustainability Facility (RSF) and an IMF program to introduce macro-critical climate reforms is under preparation.\n  - The Fund provides extensive capacity development activities for all economies in the region.\n- Strategy for fragile and conflict-affected states:\n  - Deliver more robust support tailored to country characteristics through Country Engagement Strategies.\n  - Deploy more staff on the ground, scale-up capacity development, and strengthen partnerships with humanitarian, development, and peace actors.\n  - The Fund is committed to helping the economies in the Sahel resume their development path even in a context of significant stress.\n\nSource: IMF News — The Sahel, Central African Republic Face Complex Challenges to Sustainable Development (November 16, 2023).\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- REGIONAL ECONOMIC OUTLOOK\n- HOW TO AVOID A DEBT CRISIS IN SUB-SAHARAN AFRICA\n- IMF estimates\n- fragile and conflict affected states\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development"
    }
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    "[Markdown version](/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development/index.md)",
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    "Published: November 16, 2023",
    "Countries covered: Burkina Faso, Chad, Mali, Mauritania, Niger (the Sahel), and Central African Republic (CAR).",
    "Primary drivers of fragility:",
    "Humanitarian impact:",
    "Agriculture and food security:",
    "Security spending:",
    "Public debt and borrowing space:",
    "IMF recommendation on financing sources:",
    "Growth projection:",
    "Development gap:",
    "Investment requirement:",
    "Donor trends:",
    "Constraints to concessional financing:",
    "Risks of reduced budget support:",
    "Policy implication:",
    "Governance and transparency:",
    "Domestic resource mobilization:",
    "Public services and inclusion:",
    "Climate and resilience:",
    "IMF programs and tools:",
    "Strategy for fragile and conflict-affected states:",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[REGIONAL ECONOMIC OUTLOOK](https://www.imf.org/en/Publications/REO/SSA/Issues/2023/10/16/regional-economic-outlook-for-sub-saharan-africa-october-2023)",
    "[HOW TO AVOID A DEBT CRISIS IN SUB-SAHARAN AFRICA](https://www.imf.org/en/News/Articles/2023/09/26/cf-how-to-avoid-a-debt-crisis-in-sub-saharan-africa)",
    "[IMF estimates](https://www.imf.org/en/Publications/Policy-Papers/Issues/2022/12/07/Macroeconomic-Developments-and-Prospects-in-Low-Income-Countries-2022-526738)",
    "[fragile and conflict affected states](https://www.imf.org/en/Blogs/Articles/2022/12/21/countries-hurt-by-war-and-fragility-need-strong-global-partnerships-resources)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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