IMF Staff Team Concludes Visit to the Central African Republic
At the end of the visit, Mr. Jahjah, IMF Mission Chief for Central African Republic (CAR), issued the following statement:
“Since the beginning of the year, the economy has been on a strong recovery path. Economic activity is picking up, including in the coffee, cotton and forestry sectors. Trade and transport also show better performance than projected. However, economic growth remains constrained by low public investment spending, weak infrastructure and continued weaknesses in the banking sector. Food prices have declined in the first six months of the year before picking-up during the summer on the back of returning refugees and heavy rains that negatively affected the manioc crop. Fiscal revenue and public expenditure are broadly in line with projections, while arrears clearance has been higher than projected.
“As a result, economic growth is projected at 5.2 percent and inflation at 4 percent, with downside risks if recent inflationary pressures observed in Bangui persists through the year. The overall fiscal balance is expected to be in line with the program objective of a primary deficit of 3.3 percent of GDP in 2016.
“The implementation of the government structural reform agenda appears broadly on track and, barring unforeseen events, the government is on track to meet its revenue target for 2016. The revised budget for 2016 that was submitted to parliament includes additional measures to improve domestic revenue mobilization, including a new price structure for oil products. Current expenditure is contained but government is planning new demobilization-related spending that has received financial support from members of the Central African Economic and Monetary Community. The government is on track to receive the projected budget support through the end of the year – which will allow the build-up of a fiscal buffer and help prevent domestic payments arrears accumulation, including to pensions.
“Going forward, the economy is expected to further improve in 2017, supported by the peace and reconciliation efforts underway, continued implementation of appropriate macroeconomic and structural policies, an investment plan with a clear set of priorities, and possible significant assistance from development partners who are expected to meet in Brussels on November 17, 2016. The mission welcome the efforts by the government toward a total lifting of the export suspension of diamond in the context of the Kimberley Process.
“The IMF staff team met with President Faustin Archange Touadera, Prime Minister Simplice Mathien Sarandji, Minister of Economy and Plan and International Cooperation Felix Moloua, Minister of State for Security Sacko, Minister of Finance and Budget Henri-Marie Dondra, Vice-President of the National Assembly Aurelien Simplice Zingas, President of the Finance and Budget Committee Martin Ziguele, and National Director of the Banque des Etats d’Afrique Centrale Ali Chaibou. The team also met with other senior government officials, representatives of the private sector, representatives of the retirees, and development partners.
“The mission thanks the CAR authorities for the fruitful discussions and their warm hospitality.”
1 The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems. The arrangement for Central African Republic in an amount equivalent to SDR 83.55 million (about US\\$115.8 million or 75 percent of quota) was approved on July 21, 2016 (see Press Release No.16/352 ).