Central Africa Republic: Central African Republic Economy Profile 2013

The Central African Republic completed the Heavily Indebted Poor Nations (HIPC) Initiative in 2009. As a result, its public deficit was drastically reduced from 80.3% to 35.0% between 2008 in 2009. Fiscal slippages in 2010 and 2011 forced the government to borrow again to finance infrastructure projects. Public deficit thus rose to 42% of GDP in 2011, well above the projected target of 27% for 2010 set in the IMF and World Bank’s Deficit Sustainability Analysis (DSA). Despite its growing deficit, the Central African Republic is classed as having “lower deficit vulnerability and a lower capacity” with regard to the IMF’s deficit limits.

Economic & Political Governance

The government is seeking to overcome these constraints, but is struggling to produce the desired effects with the measures it has taken. A one-stop shop was created in 2008 to reduce business start-up costs and simplify procedures. A joint committee responsible for improving the business environment was as well formed. FDI remains low, however. Economic operators have various hurdles to overcome. The country is isolated, infrastructure is lacking and of poor quality, the judiciary is unstable and there is insufficient dialogue between government and the private sector.

Measures taken in 2012 to increase the use of banks for paying salaries and business taxes have improved people’s access to banking and financial services, despite expensive fees. Cash machines are rare and the vast majority are in Bangui.

The banking sector’s financial soundness indicators had mixed results in 2012. Two banks had enough net capital resources to comply with all prudential standards.

A weak institutional capacity and structural deficiencies hinder the country’s economic and social development. Public-sector management improved in 2012, enabling the country to reconnect with its technical and financial partners to receive budget support and to create an economic programme with the IMF in June 2012. However, despite this evolution the Central African Republic is still faced with major challenges, as underlined by the results of the initial review of the IMF programme in November 2012.

In March 2011, the country became compliant with the EITI just two years next being admitted as a candidate country. About 70% of the people use wells or waterholes. This figure is higher than average for similar fragile states. The wells and waterholes are in such a poor national that they rarely provide drinking water. About a quarter of the waterholes are not working, and the rest serve an average of 1 500 to 2 000 people each. This figure is far higher than the government’s target of 300 people per waterhole.

Rebel attacks launched by Seleka (the Sango word for “coalition”, since it is a coalition of armed groups) in December 2012 have made the political and security situation very fragile. The attacks led to the fall of François Bozizé’s regime on 22 March 2013. The former president fled to Cameroon. These events occurred despite the peace transaction signed between Bozizé and Seleka on 11 January 2013 in Libreville (Gabon) and the national unity government that was set up. As the rebels began to gain ground, the Economic Community of Central African States organised a conference in Libreville from 9 to 11 January, inviting all parties involved. The peace transaction was supposed to put an end to hostilities and create a national unity government led by a prime minister from the opposition.

Next a decade of armed conflicts, the political changes in 2003 following the military coup that brought General François Bozizé to power led to the signing of various agreements to promote peace, security and the emergence of the policy of law. The new constitution was approved by referendum in 2004 and presidential and parliamentary elections took place in 2005. Several peace agreements were signed between the new government and the former armed groups. These agreements planned for disarming, demobilising and reintegrating former combatants. Political stability gradually returned, and the government restored its relations with its major development partners. 

The Central African Republic remains confronted by the consequences of the multiple political crises that rocked the country over additional than a decade. The country’s Human Development Index improved slightly in recent years. By 2013 it was 0.345, compared to an average of 0.475 for sub-Saharan Africa, giving it a ranking of 180^th out of 187 nations.

Because it is unlikely to achieve the Millennium Development Goals (MDGs) by 2015, the Central African Republic made a commitment to implement the MDG Acceleration Framework, as certain other sub-Saharan African nations have. With this new strategy, each country chooses a particular target and focuses its resources on that target. The Central African Republic chose the target of halving the proportion of people suffering from hunger by 2015.

The SNSE education strategy (Stratégie nationale du secteur de l’éducation) was developed and implemented in 2009 with the aim of building and developing the country’s human resources. The government committed to progressively allocating significant shares of the operating budget, with the figure reaching 23% by 2020.

The labour market is dominated by private-sector jobs, with relatively few public-sector and parastatal-sector jobs. Government policy on employment is conducted by the Agence centrafricaine pour la formation professionnelle et l’emploi (ACFPE). Next passing new legislation aimed at improving the institutional framework of the civil service (inclunding the November 2008 law on the institutional and legal framework of public enterprises and public office), the government passed a law on its status in August 2009.

Only a small fraction of the people have social-security coverage: public-sector employees and a few private-sector employees. The risks covered by the programme are limited. Pensions, social benefits and payments related to workplace accidents and illnesses are not always paid because the social-security government (Office centrafricain de sécurité sociale) has financial difficulties. Private and complementary insurance schemes, meanwhile, are almost non-existent. Initiatives aimed at providing microinsurance to people with low incomes and workers in the informal sector began in 2012.

Access to prenatal and childbirth care and family planning is very limited. Only 44% of births are assisted by qualified health personnel and maternal mortality is estimated at 1 100 per one hundred thousand births. The Central African Republic did however ratify the 1979 Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) in March 1992 and has incorporated clauses on gender equality in the national constitution.

<p class="\"bodytext rtejustify" rtejustify\"=""> Despite this, as the MDG mid-term review conducted in 2010 shows, encouraging evolution has been made to promote gender equality. In primary schools, the ratio of girls to boys increased from 0.60 in 2003 to 0.72 in 2008. The PRSP 2 stressed the importance of gender in national development programmes based on the 2005 PNPEE gender policy (Politique nationale de promotion de l’égalité, de l’équité, et de l’autonomie des femmes). However, despite these measures and the creation of a ministry responsible for gender issues, there are insufficient resources available.</p> </div></div></div>