Press Release No. 18/410

IMF Staff Completes Discussions for the Fifth Review under the Extended Credit Facility (ECF) to Central African Republic and the 2018 Article IV Mission

November 6, 2018

• Economic recovery continues with growth projected to reach 4.3 percent in 2018.
• Domestic revenue mobilization and good governance remain priorities.
• Consolidating peace and security, extending state institutions across the country, and accelerating reforms are preconditions for stronger growth and reducing poverty.

A team from the International Monetary Fund (IMF), led by Mr. Joel Toujas-Bernaté, visited Bangui from October 26 through November 6, 2018 to conduct discussions for the fifth review of the program supported by the Extended Credit Facility (ECF) and the IMF’s Article IV consultation.

At the end of the visit, Mr. Toujas-Bernaté issued the following statement:

“The IMF team conducted discussions for the fifth review of the three-year program under the ECF and the Article IV consultations. The team reached staff-level agreement with the authorities on economic and financial policies that could support approval of the fifth review. The Executive Board could consider the review in December 2018. Its completion would enable a disbursement of SDR 22.84 million (about US$31.7 million).

“The economic recovery continues with growth projected to reach 4.3 percent in 2018 and 5 percent in the medium term. The projections are predicated on the peace and reconciliation efforts under the African Union Initiative, the gradual extension of security forces and public services in provinces, and steadfast implementation of reforms. Strong and sustained growth is necessary to create jobs and reduce poverty. However, risks are on the downside in a context of persistent insecurity.

“The economic program generally remains on track. Quantitative monitoring indicators for end-June 2018 were met. Structural reforms are ongoing, although with some delays.

“Program discussions centered on the 2019 budget, the fiscal impact of higher oil prices, and the government’s strategy to continue to improve public financial management and strengthen governance. The team welcomed progress on the integration of parafiscal taxes to the treasury single account and emphasized the need to eliminate those that are not economically justified. The mission agreed with the authorities on fiscal targets for 2019 consistent with macroeconomic stability and welcomed the envisaged increase of social spending.

“To bolster growth prospects, resilience, and poverty reduction over the medium term, the team recommended reforms to strengthen fiscal revenue mobilization, enhance good governance, improve the business climate, and promote gender equality to strengthen resilience and social cohesion. The mission underscored the untapped fiscal revenue potential and the importance of the fight against fraud.

“To strengthen accountability, reforms could focus on improving the asset declaration regime, fully implementing of the United Nations Convention against Corruption, and enhancing transparency in the management of natural resources. Judicial reforms to secure property rights and developing infrastructure are imperative to boosting private investment.

“The team met with President Touadéra, Prime Minister Sarandji, Minister of Finance Dondra, Minister of Economy Moloua, National Director of the BEAC Mr. Chaibou, and other senior government officials. The mission also exchanged with other members of government during a seminar and met with Parliamentarians, representatives of the business, diplomatic and donor communities, as well as representatives from trade unions and civil society.

“The team thanks the authorities for their hospitality, cooperation, and constructive discussions.”