IMF Staff Team Completes Review Visit to the Central African Republic

Stocks and Financial Services Press Releases Thursday October 5, 2017 08:27
IMF--5 Oct--International Monetary Fund

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

  • IMF staff team and authorities reached broad agreement on policies which could form the basis for completing the third review.
  • Restoration of peace, redeployment of the state, and implementation of reforms will be key to ensure sustainable economic recovery.
  • The team encouraged the authorities to intensify revenue mobilization efforts, while reigning in parafiscal taxes which hamper private sector development.

An International Monetary Fund (IMF) team led by Samir Jahjah visited Bangui from September 22 to October 3 to conduct discussions on the third review of the program supported by an Extended Credit Facility (ECF). Mr. Roger Nord, Deputy Director of the IMF's African Department, joined the team from September 22 to 26. Discussions will continue during the upcoming Annual Meetings of the IMF and the World Bank (WB) from October 13–15.

At the conclusion of the visit Mr. Jahjah issued the following statement:

"The Central African Republic's (C.A.R.) macroeconomic performance remains good despite a deteriorating security environment. Economic growth is expected to reach 4 percent in 2017, supported by the good performance of the forestry and mining sectors. However, renewed violence weighs on agricultural production. Inflation is projected at 3.8 percent by end-year, and to decline gradually over the medium term.

"Restoration of peace, the redeployment of the state, and decisive implementation of reforms will be key to achieve sustained economic recovery and medium term growth above the projected 4 percent. The success of the authorities' economic program hinges on, and contributes to peace and reconciliation.

"The team commended the authorities for progress achieved in implementing their economic reform agenda. All quantitative performance targets were met except for underperforming tax revenues. Good progress has been made in the implementation of reforms to enhance transparency, accountability and treasury management. As a result, wages and pensions have been paid regularly and spending on social sectors and infrastructure have increased.

"The team encouraged the authorities to intensify revenue mobilization efforts, especially at customs, while reigning in parafiscal taxes which hamper private sector development. These efforts will help create fiscal space for additional pro-poor and investment spending which is critical to reduce poverty and create jobs and growth.

"The team welcomed the government's decision to accelerate the clearance of commercial and social arrears to support social cohesion and peace. An independent audit which will be finalized in October is crucial to guide the arrears clearance process. The large amount of social arrears to be cleared calls for the adoption of a time-bound plan and adequate procedures to ensure transparency and accountability.

"The team met with President Touadera, Prime Minister Sarandji, Minister of Economy, Plan and Cooperation, Mr. Moloua, Minister of Finance, Mr. Dondra, Minister of National Defense, Mr. Koyara, National Director of Banque des États d'Afrique Central (BEAC), Mr. Chaibou, and senior officials from Minusca, and development partners. The team thanks the authorities for their hospitality, collaboration, and constructive discussions.

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