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IMF Country Report No. 20/137

CENTRAL AFRICAN REPUBLIC

REQUEST FOR DISBURSEMENT UNDER THE RAPIC CREDIT FACILITY—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR THE CENTRAL AFRICAN REPUBLIC

April 2020

In the context of the Request for Disbursement under the Rapid Credit Facility, the following documents have been released and are included in this package:

• A Press Release including a statement by the Chair of the Executive Board.

•The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on April 20, 2020, following discussions that ended on April 8, 2020 with the officials of the Central African Republic on economic developments and policies underpinning the IMF disbursement under the Rapid Credit Facility. Based on information available at the time of these discussions, the staff report was completed on April 14, 2020.

•A Debt Sustainability Analysis prepared by the staff of the IMF and the International Development Association (IDA).

•A Statement by the Executive Director for the Central African Republic.

The document listed below has been or will be separately released.

  • Letter of Intent sent to the IMF by the authorities of the Central African Republic*

  • *Also included in the Staff Report

The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.

Copies of this report are available to the public from

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© 2020 International Monetary Fund

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CENTRAL AFRICAN REPUBLIC

REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY

April 13, 2020

Executive Summary

Context. While the number of detected cases has so far been limited, the COVID-19 pandemic, if not contained, could have a considerable economic and social impact in C.A.R. and could exacerbate tensions in an already volatile environment. The security situation remains precarious, with sporadic outbreaks of violence in the regions, while political tensions could flare up in the run-up to the December presidential and legislative elections. In this context, the authorities have adopted a comprehensive response plan aimed at containing the spread of the virus and at increasing state capacity to assist infected people.

Request for Fund support. To help address urgent balance of payments needs arising from the economic impact and mitigation efforts of the COVID-19 pandemic, the authorities are requesting a disbursement of SDR 27.85 million, equivalent to 25 percent of quota, under the Rapid Credit Facility (RCF), with the full amount to become available upon Board approval. Staff supports the request. The authorities are also seeking additional grant financing from multilateral and bilateral donors to cover the remaining financing needs. They have also requested Fund assistance from the Catastrophe Containment and Relief Trust.

Policy response. The authorities intend to allow the fiscal deficit to increase to accommodate most of the fiscal impact of the pandemic, which will comprise a significant shortfall in revenue and additional outlays as part of the response plan. While they intend to streamline non-priority expenditures, this accommodative stance will allow them to continue meeting pressing social, infrastructure, and security spending needs. The authorities have also reiterated their intention to pursue the policies and structural reforms to which they committed under the ECF arrangement approved last December.

Approved By

Analisa Fedelino (AFR) and Seán Nolan (SPR)

An IMF team consisting of Messrs. Martin (head), Diaby, Million, Ouedraogo and Ms. Esham (all AFR), and Messrs. Basdevant (FAD), and Davies (resident representative) held discussions with the Central African authorities by videoconference on April 8, 2020. Ms. Attey’s help with the production of the staff report is gratefully acknowledged.

Contents

  • CONTEXT

  • RECENT DEVELOPMENTS

  • IMPACT OF THE PANDEMIC, OUTLOOK, AND RISKS

  • POLICY ISSUES AND DISCUSSIONS: RESPONDING TO THE PANDEMIC

  • ACCESS, EXTERNAL ARREARS, AND CAPACITY TO REPAY

  • STAFF APPRAISAL

  • BOX

  • 1. Response Plan to the COVID-19 Pandemic

  • TABLES

  • 1. Selected Economic and Financial Indicators, 2018–25

  • 2a. Central Government Financial Operations (billions of CFAF), 2018–25

  • 2b. Central Government Financial Operations (percent of GDP), 2018–25

  • 3. Monetary Survey, 2018–25

  • 4a. Balance of Payments (billions of CFAF), 2018–25

  • 4b. Balance of Payments (percent of GDP), 2018–25

  • 5. External Financing Requirements, 2020–25

  • 6. Indicators of Capacity to Repay the IMF, 2020–30

  • 7. Financial Soundness Indicators, 2012–19

  • APPENDIX

  • I. Letter of Intent

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CENTRAL AFRICAN REPUBLIC

REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY—DEBT SUSTAINABILITY ANALYSIS

April 13, 2020

Approved By

Annalisa Fedelino (AFR); Seán Nolan (SPR); and Marcello Estevão (IDA)

Prepared by the staffs of the International Monetary Fund (IMF) and the International Development Association (IDA)1