Central African Republic: Selected Issues and Statistical Appendix
Author: International Monetary Fund
Publication Date:
23 Jun 2004
eISBN:
9781451806618
ISBN:
9781451806618
Language:
English
Keywords:
ISCR; CR; CEMAC; government; diamond export; country; recording tax; tax preference; flat business tax; personal property; tertiary sector; Agricultural commodities; Consumption taxes; Income; Credit
Download PDF (2 MB)

This Selected Issues paper and Statistical Appendix analyzes economic developments over the past decade in the Central African Republic (CAR). It examines the regional integration efforts of the CAR in the context of the Central African Economic and Monetary Community (CEMAC). The paper presents an overview of the CEMAC customs union reform, and investigates the status of the implementation of the CEMAC trade reform in the CAR. The paper also evaluates the impact of the regional trade reform on the CAR’s trade performance, based on trade developments in the CAR during 1994–2002.

Abstract

This Selected Issues paper and Statistical Appendix analyzes economic developments over the past decade in the Central African Republic (CAR). It examines the regional integration efforts of the CAR in the context of the Central African Economic and Monetary Community (CEMAC). The paper presents an overview of the CEMAC customs union reform, and investigates the status of the implementation of the CEMAC trade reform in the CAR. The paper also evaluates the impact of the regional trade reform on the CAR’s trade performance, based on trade developments in the CAR during 1994–2002.

V. Recent Social Developments and Poverty Reduction Focus71

116. As noted above, the C.A.R., with a GNP per capita of US$346 (constant 1995 U.S. dollars) in 2000,72 is among the ten least-developed countries in the world. Increasing poverty and disintegration of social structures have contributed to an increase in the incidence of communicable diseases, including malaria, diarrhea, and HIV/AIDS. The number of people infected with HIV has been increasing steadily since the identification of the first cases of AIDS in the mid-1980’s. The recent political and military events had a grim impact on social conditions, which, on the basis of anecdotal information, worsened further during the October 2002-March 2003 period. The civil conflict dramatically worsened the already insufficient provision of public health, education, and HIV/AIDS treatment and prevention. Recent estimates indicate that the rate of HIV/AIDS prevalence among adults has increased to more than about 15 percent, placing the Central African Republic as the tenth-most HIV-infected country in sub-Saharan Africa. HIV/AIDS and its related opportunistic infections have become a serious threat to the economic and social development of the country.

117. In recent years, the government of the C.A.R. has expressed a commitment to poverty alleviation. In 1998–99, it developed, with assistance from the United Nations Development Program (UNDP), a National Poverty Plan (NPRP), which was discussed at a national seminar in August 1999. In preparing the plan, the government consulted important stakeholders, including village leaders, women’s and youth associations, religious organizations, trade unions, and nongovernmental organizations (NGOs).

118. Building on the NPRP, an interim Poverty Reduction Strategy Paper (PRSP) was prepared by a technical committee in collaboration with representatives from employers’ associations, trade unions, and local NGOs. The C.A.R.’s interim PRSP was finalized and presented to the Board of the IMF in January 2001. The interim PRSP identified the key weaknesses of the NPRP, and established a work program for fully addressing these weaknesses in the preparation of the full PRSP. These weaknesses included an inadequate database on poverty, lack of prioritization of economic and social policies, limited consultations with the population, and lack of an integration of the poverty reduction strategy with a medium-term macroeconomic framework. The interim PRSP emphasized the importance of rapid and broad-based economic growth, accompanied by a stable macroeconomic framework as a prerequisite for poverty reduction. However, the interim PRSP did not set poverty reduction goals along the lines of the background of the Millennium Development Goals (MDG), and did not discuss a macroeconomic framework beyond 2001.

119. The interim PRSP was candid in identifying poor governance and inadequate security as major constraints to the fight against poverty. The strategy presented in the interim PRSP focused on poverty reduction via broad-based and equitable growth, based on private sector development. To this end, it stressed the importance of having a stable macroeconomic environment, to be achieved through enhanced revenue collection, the improvement of public expenditure management, and the fight against corruption. It also stressed the improvement of access to basic education and health services, as well as curbing the prevalence of HIV/AIDS and malaria, and it underscored the need to extend basic social and productive infrastructures to rural and poor urban areas. Improving security, promoting good governance, decentralizing government, strengthening institutions, and mobilizing the collaboration of local communities were presented as necessary conditions for the effective implementation of a poverty reduction strategy.

120. The Joint Staff Assessment (JSA) of the interim PRSP, prepared by the staffs of the World Bank and the Fund, praised the government’s efforts to prepare an adequate interim PRSP despite limited technical capacity, financial resources, and poverty data. Nonetheless, the JSA stressed that the PRSP would need to address weaknesses observed in the preparation of the interim PRSP. In particular, the work leading to the preparation of the PRSP would need to improve the statistical database; strengthen the participatory process; better prioritize the objectives for poverty reduction; clearly define quantitative targets for poverty reduction in the context of a detailed costing and financing exercise; and design an effective system for monitoring progress in reducing poverty, including the tracking of poverty outlays.

121. Since the presentation of the C.A.R.’s interim PRSP, the government continued the preparation of the full PRSP, but progress has been notably slow owing to the political and military events, the lack of financial resources, and inadequate analytical and management capacities. However, recently, some steps forward have been realized, and the C.A.R. authorities anticipate the completion of the full PRSP in December 2004. In this context, household surveys in rural and urban areas have been undertaken to assess the poverty conditions in the C.A.R Furthermore, progress in the definition of strategic objectives and a monitoring mechanism has been achieved through the elaboration of action plans for the sectors and the organization of a national workshop to validate the poverty data. However, much work remains for the completion of the full PRSP, including the analysis of the household surveys, the preparation of the notes on the determinants of poverty and economic growth, the preparation of the note on the participatory process, the costing of the programs and strategies for poverty reduction, and aligning the poverty strategy and programs with the macroeconomic framework, including public expenditure programs.

Central African Republic: Basic Data

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Sources: C.A.R. authorities; and staff Fund estimates.

Source: World Bank, World Development Indicators, 2003.

2000 data.

Table 1.

Central African Republic: Gross Domestic Product at Current Prices, 1997–2003

(In billions of CFA francs)

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Sources: C.A.R. authorities; and Fund staff estimates.
Table 2.

Central African Republic: Gross Domestic Product at Previous Year’s Prices, 1997–2003 1/

(In billions of CFA francs)

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Sources: C.A.R. authorities; and Fund staff estimates.

Since the base year (1985) is outdated and being updated, the C.A.R. authorities compute real GDP growth by comparing output at previous year prices (Table 1) with previous year’s output at current prices.

Table 3.

Central African Republic: Gross Domestic Product, Real Growth Rates, 1997–2003 1/

(Annual percentage changes)

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Sources: C.A.R. authorities; BEAC; and Fund staff estimates.

Since the base year (1985) is outdated and being updated, the C.A.R. authorities compute real GDP growth by comparing output at previous year prices (Table 1) with previous year’s output at current prices.

Table 4.

Central African Republic: Supply and Use of Resources at Current Prices, 1997–2003

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Sources: C.A.R. authorities; BEAC; and Fund staff estimates.

Consumption figures reflect authorities’ definition of public consumption, which includes public sector wages.

Table 5.

Central African Republic: Agricultural Production 1997/98–2003/04

(In thousands of tons)

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Source: C.A.R. authorities.

Cotton crop year ends October 31.

One kilogram of merchant coffee is equivalent to 2 kilograms of coffee cerise.

Table 6.

Central African Republic: Cotton Price Structure, 1997/98–2002/03 1/

(In CFA francs per kilogram)

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Source: National cotton company (SOCOCA).

Crop year ends October 31.

Transport and transaction costs.

Including domestic sales.

Average export price less total costs.

Table 7.

Central African Republic: Production and Exports of Forestry Products, 1997–2003

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Source: Central African Republic, Ministry of Water and Forests.
Table 8.

Central African Republic: Manufacturing Output, 1997–2003

(In units indicated)

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Source: C.A.R. authorities.

In thousands of hectoliters.

In thousands of tons.

In millions of packets.

In thousands of cubic meters.

Table 9.

Central African Republic: Production and Export of Diamonds and Gold, 1997–2003

(Diamonds in thousands of carats; gold in kilograms)

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Source: C.A.R. authorities.
Table 10.

Central African Republic: Consumption of Oil Products, 1997–2003

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Source: C.A.R. authorities.
Table 11.

Central African Republic: Price Structure of Petroleum Products, 1997–2003

(In CFA francs per liter)

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Table 11.

Central African Republic: Price Structure of Petroleum Products, 1997–2003

(In CFA francs per liter)

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Source: National oil import company (PETROCA).