Press Release No. 19/403

IMF Staff Completes Mission to the Central African Republic

November 8, 2019

• The IMF welcomes the progress made in implementing the Political Agreement for Peace and Reconciliation (APPR).
• Recent economic developments have been broadly favorable, with an accelerating economic growth, a contained inflation, and a reduction in the current account. However, tax revenues are below expectations.
• The Central African authorities and the IMF team discussed a program of economic policies and structural reforms for the next three years, which could be supported by a new agreement under the Extended Credit Facility. These discussions will continue in the coming weeks.

An International Monetary Fund (IMF) team, led by Mr. Édouard Martin, visited Bangui from October 28 through November 8, 2019 to discuss the program of economic policies and reforms that the government intends to implement over the next three years, and which could be supported by the IMF through a new arrangement under the Extended Credit Facility (ECF) .

At the end of the visit, Mr. Martin issued the following statement:

“The IMF welcomes the progress made in implementing the Political Agreement for Peace and Reconciliation (APPR) signed on February 6, which has contributed to a steady reduction in violence in the country. Although this progress remains fragile, it shows the potential of the agreement in improving the security in C.A.R. and thereby create the conditions for sustained growth and sustainable poverty reduction.

“Recent economic developments have been generally favorable. Economic growth, driven by mining, forestry, and construction, is expected to reach 4½ percent this year and 5 percent next year. Inflation remains contained, being forecast at around 3½ percent in 2019 and less than 3 percent in 2020. The current account deficit is expected to shrink to 5.5% of GDP in 2019, mainly due to the exceptional level of budget support granted by the economic and financial partners. The banking sector remains largely capitalized and liquid. However, tax revenues were below expectations. This is all the more concerning as revenue mobilization is critical to the sustained financing of the country’s most pressing spending needs.

“The favorable economic outlook is subject to substantial risks: downward, owing to the volatile security situation and the risks of a slowdown in the global economy; and upward, in connection with the implementation of the peace agreement.

“The mission's discussions focused on the program of economic policies and structural reforms that the government intends to implement over the next three years in the context of the Recovery and Peacebuilding Plan (RCPCA) and which could be supported by the IMF through a new arrangement under the Extended Credit Facility. Building on the progress made over the past three years, this program will aim to further reduce fiscal and external imbalances while promoting strong and sustainable growth and poverty reduction. It will be based on a sound fiscal policy aimed at ensuring sustainable financing of humanitarian, social, security, and infrastructure spending needs through further domestic revenue mobilization efforts and rationalization of non-priority spending. It will also be based on an ambitious and realist program of structural reforms aiming at: further strengthening the institutions and governance in the country, which is essential for strengthening social cohesion; and removing bottlenecks and regulatory barriers to private investment. These discussions have been productive and will continue in the coming days, with a view to submitting a new arrangement to our Board of Directors by the end of the year.

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

The IMF team met with President Touadéra, President of the National Assembly Ngon-Baba, Prime Minister Ngrébada, Minister of Finance Dondra, Minister of Economy Moloua, Minister of Mines Mbolifatrane, Minister of Water and Forest Amit, National Director of the BEAC Chaibou, and other senior government officials and parliamentarians. The team also met with representatives of the private sector, civil society, and donor community.