## The Sahel, Central African Republic Face Complex Challenges to Sustainable Development _IMF News, November 16, 2023_ ## Source details **Canonical URL:** [The Sahel, Central African Republic Face Complex Challenges to Sustainable Development](https://www.imf.org/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development) ## Other formats - [Markdown version](/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development/index.md) - [Structured JSON version](/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development/index.json) - [Bundle manifest](/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development/bundle-manifest.json) ## Bibliographic details - Published: November 16, 2023 --- ### Key challenges and context - Countries covered: Burkina Faso, Chad, Mali, Mauritania, Niger (the Sahel), and Central African Republic (CAR). - Primary drivers of fragility: - Escalating insecurity and political instability, including military takeovers. - Climate change: more frequent extreme weather events, including historic floods and drought. - Overlapping external economic shocks. - Humanitarian impact: - Conflict-related fatalities increased by over 40 percent in 2022. - More than 3 million people fleeing violence in Burkina Faso, Mali, and Niger (UNHCR). - Agriculture and food security: - Extreme weather events depress productivity in agriculture, resulting in the loss of income and assets, exacerbating food insecurity, and reinforcing fragility and conflict. ### Fiscal and financing constraints - Security spending: - Reached 3.9 percent of GDP in 2022. - Absorbed 25 percent of fiscal revenues before grants, on average. - Public debt and borrowing space: - Public debt as a share of GDP has been increasing steadily since 2011 for Sahel countries. - Projected to average close to 51 percent in 2023. - With financial conditions likely to remain tight, there is limited scope for governments to borrow more. - IMF recommendation on financing sources: - Focus on grants, highly concessional financing, domestic revenue mobilization, and private sector development efforts. ### Economic outlook and investment needs - Growth projection: - Economic growth in the region is projected to stabilize at about 4.7 percent over the medium term. - Development gap: - 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. - Investment requirement: - 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. ### Donor support and risks - Donor trends: - Donor support declined by close to 20 percent over the last decade to reach about 4 percent of GDP. - Less than half a percent of GDP was provided in the form of budget support grants in 2022. - Constraints to concessional financing: - Political instability and fragile transitions to civilian rule in Burkina Faso, Mali, and Niger make it more difficult to raise concessional financing. - Transparency of public spending is an important issue in CAR. - Risks of reduced budget support: - Prolonged reductions present significant risks to essential functions of the state and will worsen social and humanitarian conditions. - Policy implication: - 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. ### Policy recommendations for authorities - Governance and transparency: - Increase budget transparency and accountability. - Enhance governance and anti-corruption frameworks. - Strengthen security expenditure management and internal controls. - Domestic resource mobilization: - Boost domestic revenue mobilization to finance spending needs sustainably. - Public services and inclusion: - Improve provision of public services in fragile zones. - Implement policies to unlock access to economic opportunities for young people. - Climate and resilience: - Adopt policies to foster resilience and climate-smart investments, including in the agricultural sector. ### IMF engagement and support - IMF programs and tools: - Five out of the six countries have an IMF-supported financing arrangement to strengthen macroeconomic frameworks and implement reforms. - Mauritania has requested access to the Resilience and Sustainability Facility (RSF) and an IMF program to introduce macro-critical climate reforms is under preparation. - The Fund provides extensive capacity development activities for all economies in the region. - Strategy for fragile and conflict-affected states: - Deliver more robust support tailored to country characteristics through Country Engagement Strategies. - Deploy more staff on the ground, scale-up capacity development, and strengthen partnerships with humanitarian, development, and peace actors. - The Fund is committed to helping the economies in the Sahel resume their development path even in a context of significant stress. *Source: IMF News — The Sahel, Central African Republic Face Complex Challenges to Sustainable Development (November 16, 2023).* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2023/11/16/cf-the-sahel-car-face-complex-challenges-to-sustainable-development_