Central African Republic: First and Second Reviews Under the Extended Credit Facility Arrangement and Request for Waivers of Nonobservance of Performance Criteria—Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for the Central African Republic
Author: International Monetary Fund. African Dept.
Publication Date:
01 Feb 2021
eISBN:
9781513568157
ISBN:
9781513568157
Language:
English
Keywords:
ISCR; CR; asset declaration law; staff appraisal; staff statement; assessment of policy issue; CAR authorities; government arrears; digitalization strategy; asset declaration regime; government legitimacy; financial support; COVID-19; Arrears
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First and Second Reviews Under the Extended Credit Facility Arrangement and Request for Waivers of Nonobservance of Performance Criteria-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for the Central African Republic

Abstract

First and Second Reviews Under the Extended Credit Facility Arrangement and Request for Waivers of Nonobservance of Performance Criteria-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for the Central African Republic

Context

1. The pandemic appears somewhat contained. The number of positive cases and related deaths has been very limited over the last few months (Text figure 1), even though most containment measures have been progressively loosened—with schools, bars, and the international airport reopening—and social distancing recommendations are very loosely followed outside official buildings. Deaths are likely underreported as most confirmed cases are not hospitalized or otherwise monitored. While recognizing that this apparent low incidence and morbidity reflect in part the very low level of testing, which is now limited to “suspect” cases, the authorities and donors consider that it may also result from a number of C.A.R.-specific factors, such as its very low median age (19.7 years) and life expectancy (52.8 years, the lowest in the world), as well as the prevalence of other diseases. The high rate of people with antibodies (more than 25 percent of people treated for unrelated conditions) in the context of low morbidity suggests that the health impact of the pandemic may not turn out to be as severe as initially feared.

Text Figure 1.
Text Figure 1.
Text Figure 1.

Central African Republic: COVID-19 Cases and Health System

Citation: IMF Staff Country Reports 2021, 028; 10.5089/9781513568157.002.A002

Sources: Johns Hopkins CSSE and IMF staff calculationsSources: World Bank WDI, UN Population Prospects and IMF staff calculations

2. The security and humanitarian situations remain precarious. In the first half of the year, clashes occurred among armed groups in the north, and between the peacekeeping and government forces and the 3R armed group in the northwest. While violent incidents involving armed groups have since resumed the downward trend observed since the February 2019 peace agreement, the increase in criminal incidents has become a concern. Disarmament of ex-combatants has been slowly progressing in the west but armed groups still operate in most of the country outside Bangui. Also, earlier in the year, the formation of mixed brigades was undermined by some ex-combatants returning to their factions after receiving arms and financial support. The numbers of refugees and of internally displaced persons continued to increase (Figure 1). The number of persons in need of humanitarian aid was estimated at 2.9 million, or about 60 percent of total population, at end-July.

Figure 1.
Figure 1.

Central African Republic: Recent Developments

Citation: IMF Staff Country Reports 2021, 028; 10.5089/9781513568157.002.A002

Source: C.A.R. Authorities and IMF Staff estimates

3. Despite some delays in voter registration, the first round of the presidential and general elections is still scheduled for December 27. The registration deadline was postponed by one month owing to logistical constraints and to allow the government to find an agreement with the 3R group on registration in the northwest, as participation in this opposition stronghold is considered key to the elections’ legitimacy. Enough funds have been committed to cover the presidential and legislative elections (with more funding only necessary for the local elections scheduled later next year). The Constitutional court’s decision on December 3 to invalidate the candidacy of former President Bozize, one of the main opposition candidates for the presidency, might heighten tensions in the run-up to the presidential election.

Recent Developments

4. The pandemic had a substantial impact on economic activity, with some sectors more affected than others. In the first half of 2020, activity in trade, transport, tourism, hospitality, and mining was hit hard by the containment measures and low external demand. Other sectors, such as food crops, forestry, and telecommunications proved more resilient. With the economy starting to recover as containment measures are progressively relaxed, economic activity is now projected to stagnate in 2020. Trade disruptions (owing to the testing of drivers at the border) contributed to inflationary pressures during the second quarter. As these pressures have since receded, inflation is expected to remain below 3 percent this year. Reflecting subdued external and domestic demand, exports and imports declined during the first half of the year. Wood exports held up better than expected but suffered from a sharp drop in prices, whereas formal diamond exports came to a near stop.

5. Fiscal developments during the first three quarters of 2020 were broadly in line with what was envisaged under the RCF disbursement. In the first half of 2020, lower customs and income taxes reflected: the impact of containment measures on economic activity, imports, and tax administration (less controls); measures to alleviate the economic impact of the pandemic (such as the temporary suspension of the 2020 tax measures); and continued difficulties in mobilizing revenues from the public agencies. Domestic revenue have since started to recover. Current and capital spending were slightly lower than the levels envisaged in April (but above the ECF projections), with lower transfers and purchases of goods and services only partly offset by the regularization of some unregistered 2019 expenditures.

6. The supplementary 2020 budget law, approved by Parliament on July 9, was also broadly consistent with what was envisaged under the RCF. The additional emergency financing provided by the IMF and the World Bank was essentially used to finance Covid-related spending and compensate for the shortfall in domestic revenue. Covid-related spending focused on the implementation of the response plan from the Ministry of Health, transfers to vulnerable households and businesses and building infrastructure (Text Table 1) and amounted to CFAF 15.8 billion (1.2 percent of GDP).1 The authorities were, however, not able to save on non Covid-related expenditures, as envisaged at the time of the RCF, with Parliament increasing them by about CFAF 3 billion (0.2 percent of GDP).

Text Table 1.

Supplementary Budget for 2020: COVID-related expenditures

article image
Source: C.A.R. Authorities and IMF Staff calculations

7. The banking sector remains profitable and well capitalized, despite a decline in liquidity indicators and a slight rebound in non-performing loans. The capital adequacy ratio amounted to 28 percent in May 2020, compared to 30 percent in December 2019. While still comfortably above the 100-percent regulatory minimum, the liquidity ratio declined to 132 percent in May from 165 percent in last December. Credit to the private sector decreased by 4.8 percent y-o-y in June, reflecting the banks’ caution in a highly uncertain environment. Non-performing loans slightly increased, from 12.6 percent of total loans in December 2019 to 13.7 percent to May 2020, and could further increase in the second half of 2020 as the economic consequences of the pandemic unfold.

Monitoring of COVID19-Related Expenditures

With the support of the World Bank, a July 2020 ministerial decree established a committee tasked with the supervision of COVID19-related expenditures. This committee is composed of the Minister of Finance, who heads the committee, and representatives of key spending agencies (e.g., Ministry of Health, Ministry of Economy and Planning) and agencies in charge of expenditure supervision (e.g., Budget Directorate, Procurement Directorate, High Authority for Good Governance), as well as observers representing development partners (World Bank, African Development Bank, IMF, European Union, BEAC) and the civil society. The committee monitors not only COVID19-related expenditures executed by the government, but also those executed by donors. It does so on a monthly basis, based on disbursement plans and execution, to cross- check when funds are disbursed and if they are in line with plans. Additionally, the committee will supervise the application of expenditure execution procedures (commitment, procurement, payment). Finally, when relevant the committee will also make recommendations to improve the efficiency and transparency of Covid-related expenditures.

Covid-related expenditures will be audited. The Procurement Directorate will publish all tenders, the criteria for selection, as well as the selected enterprises. For spending executed by the government, execution will be based on normal procedures (as opposed to streamlined ones). These measures will enable independent audits, which are, according to the decree, to be done 60 days after the end of the fiscal year 2020. The outcome of the audit will be published on the website of the Ministry of Finance 15 days after its finalization.

8. Despite some delays caused by the pandemic’s impact on implementation capacity and on technical assistance (TA) delivery, the authorities have made significant progress in implementing structural reforms, including with regard to digitalization:2

  • They established an inter-ministerial committee to monitor Covid-related expenditures (Box 1 and MEFP ¶8). The committee has started publishing data on the actual spending and the related public contracts (MEFP ¶24).

  • They strengthened further public financial management. The daily reconciliation of their tax revenue estimates by the tax and customs directorates and the Treasury directorate has helped reduce substantially apparent discrepancies. In October, the authorities adopted the secondary legislation for the new legal framework for public institutions and enterprises (missed end-March structural benchmark (SB)), which had been drafted in collaboration with World Bank and Fund staff. To ensure public agencies’ revenue are duly transferred to the Treasury single account (TSA), the ministry of finance instructed public accountants assigned to each agency to control taxpayer compliance and enforce collection as needed. The electronic payment of civil servants’ salaries has been rolled out in a total of 10 localities and is now being developed in Bangui for defense and security forces (MEFP ¶9). The rolling-out of the new integrated financial management information system SIM-BA has, however, been delayed to 2022 by Covid-related constraints on TA delivery (MEFP ¶10).

  • They pursued their efforts to enhance tax and customs administration, including through digitalizing procedures. The authorities are in the process of making up for the delays— caused by the postponement of related TA—in the rolling-out of e-filling and e-payment of taxes. As a result, its deployment to large companies is expected to be completed on time (end-December SB). Work is also ongoing to interconnect Douala’s and the border’s customs posts with the central services and to transition to ASYCUDA world. The capture of the tax returns for 2018 and 2019 in the SYSTEMIF IT system (missed end-June SB) was finalized in November. Finally, the authorities recruited in June a new service provider to assist the authorities in certifying and securing timber export revenues (missed end-January SB).

  • They published the Fund governance diagnostic report and submitted to Parliament in early October a draft law to strengthen the asset declaration regime (MEFP ¶11). The submission of the draft law did not meet the SB test date of end-September and the draft itself was not fully in line with the applicable international good practices and the corresponding recommendations provided by the Fund as part of its TA engagement. With continued Fund TA, the authorities plan to amend the draft prior to its formal consideration by Parliament to bring it in line with the applicable international good practices.

  • They made progress on various reforms to improve the business climate. A new labor code, which caps indemnities in the event of unfair dismissal, has been submitted to Parliament. The code also contains important provisions for greater social justice, for example, by establishing penalties for sexual harassment in the workplace. With support from the World Bank, the government is in the process of hiring a technical expert to incorporate the recommendations of the African Development Bank (AfDB) on a draft mining code. The aim is to bring the mining code in line with international standards and to provide a sound and transparent framework for the utilization of mineral resources in the C.A.R. The government has also prepared an e- commerce guide, which is now available on the Ministry of Finance website.

Program Performance

The pandemic and early shortfalls in policy implementation have substantially affected program performance, with most quantitative performance criteria and structural benchmarks missed. Program implementation has, however, improved over the last few months.

9. While implementation of quantitative conditionality fell short of program expectations, recent developments have been broadly in line with what was envisaged under the April 2020 RCF. Quantitative performance has been below expectations on account of low domestic revenue, high government spending, and delayed domestic arrears repayments. While all end-December PCs and the end-June fiscal PCs criteria on domestic revenue, the domestic primary fiscal balance and the reduction on domestic payment arrears were missed, the end-June indicative targets on social spending and on the recourse to exceptional spending procedures were met, as well as the continuous performance criterion on the contracting or guaranteeing of new external non concessional debt. The continuous performance criterion on the non-accumulation of external arrears was temporarily breached as the authorities made only in September a payment of about $200,000 due to IFAD in April, owing to an insufficient coordination between the Treasury directorate and debt unit. The end-June performance reflected primarily the impact of the pandemic on customs and tax revenue and additional spending to contain it. Recent fiscal performance has, however, been broadly in line with the RCF projections, with domestic revenues well on their way to meet the proposed end-2020 revenue PC and the increase in spending focused on fighting the pandemic (MEFP ¶6).

10. There has been solid progress in implementing SBs. One was met, three were implemented with a delay, and there has been strong progress on the last one. The submission to Parliament of a draft supplementary budget providing for the elimination of the seven remaining public agencies without economic justification was the only SB met on time (end-June). However, Parliament rejected this elimination, considering that an assessment of its socio-economic impact should be conducted beforehand. Following the hiring in January of Webb Fontaine to help customs with the valuation of imports, the authorities hired another service provider in May to help them certify and secure timber export revenues (missed end-January SB). The secondary legislation to support the implementation of the new legal framework for public and para-public institutions and enterprises were adopted in early October (missed end-March SB). The 2018 and 2019 corporate tax returns have been entered into the SYSTEMIF IT system (missed end-June SB and prior action). Finally, the authorities submitted to Parliament a draft law to strengthen the asset declaration regime but that draft will have to be amended prior to its formal consideration by Parliament to be fully in line with the applicable international good practices (missed end-September SB, prior action).

Outlook and Risks

11. The short-term outlook has worsened further. Growth is now projected at zero in 2020, compared with 5 percent at the time of the ECF request and 1 percent when the RCF was requested, reflecting the longer-than-expected impact of the pandemic, both globally and in C.A.R. Growth is also expected to recover more gradually than previously expected, being limited to 3½ percent in 2021. Assuming a steady implementation of the peace agreement and of the reforms envisaged under the program, growth would increase further over the medium term to reach 5 percent. Inflation would remain under 3 percent. The external current account deficit would narrow to about 5½ percent of GDP in the medium term largely due to lower imports and higher exports.

12. Risks to this outlook are sizeable and skewed to the downside. The outlook for the end of 2020 and early 2021 is particularly uncertain, owing not only to the possible worsening of the pandemic but also to a still volatile security environment, with tensions that could intensify in the run-up to the elections. Most prominent among them is the possibility that the economic and social impact of the pandemic proves larger and more protracted than currently assumed and/or leads to increased violence in the country. Upside risks include a milder pandemic impact (e.g., if a vaccine becomes rapidly and widely available) and faster implementation of structural reforms and the peace agreement after the elections.

13. An alternative scenario illustrates the potential impact of these risks (Annex II). This scenario assumes a more severe and protracted pandemic and increased insecurity, which could deepen the crisis, delay the recovery, and affect adversely investors’ sentiment. Pressure on fiscal and external accounts would mount, requiring a combination of additional grant financing and cuts in non-priority spending.

Text Table 2.

Medium-term Outlook, 2018–25

article image

Excludes grants, interest payments, and externally-financed capital expenditures.

Sources: C.A.R. Authorities and IMF Staff estimates and projections

14. The authorities shared staff’s views on the outlook and risks and reasserted their commitments to maintain prudent macroeconomic policies and speed up structural reforms to achieve program’s objectives. Though the pandemic has had an impact on the implementation of such policies and reforms, the authorities agreed that their implementation is key to strengthening further macroeconomic stability, building the resilience, bolstering inclusive growth, containing inflation, and reducing further external and fiscal imbalances. They saw more upside risks to the short-term outlook, considering that C.A.R.’s economic structure, with a relatively large agricultural sector and limited tourism sector might blunt further the pandemic’s economic impact.

Policy Issues and Discussions

The government’s policies will focus on fighting the pandemic and supporting a swift recovery in the context of the ECF’s initial objectives of maintaining macroeconomic stability, improving governance, and addressing C.A.R.’s protracted balance of payments needs. In the short term, much attention will be devoted to ensuring that donor financing is efficiently spent to fight the pandemic. As the situation improves, the focus will return to sustainably creating space for—through revenue mobilization, spending prioritization, and PFM reforms— C.A.R.’s considerable security, social, and infrastructure spending needs. These priorities, along with governance and business environment reforms, would support inclusive growth and poverty reduction. Fiscal policy will remain guided by the objective of gradually reducing public debt, while ensuring the sustainable financing of C.A.R.’s most pressing spending needs.3

A. Fiscal Policy

15. Following RCF approval, fiscal policy has focused on the efficient and transparent implementation of the response to the pandemic and on containing other expenditures. The authorities reiterated their commitment to use the emergency financing provided by donors to finance the necessary Covid-related spending and to offset domestic revenue loss. Accordingly, the additional allocations provided in the supplementary budget aim at strengthening the health sector and at alleviating the impact of the pandemic on the most vulnerable households and enterprises. To ensure their efficiency, the committee tasked with the supervision of COVID19- related expenditures will continue to monitor them closely and will publish monthly data on their execution and on the results of the related tenders. With a view to contain other, non Covid-related expenditures, the authorities identified CFAF 7 billion in savings in non-priority expenditures.4

16. The authorities submitted to Parliament a draft 2021 budget law consistent with the medium-term fiscal objectives set under the ECF and based on realistic revenue assumptions (prior action). Revenues are expected to rebound partially, on account of the economic recovery, the normalization and strengthening of tax administration, and the full-year impact of the 2020 fiscal measures (which had been temporarily suspended). To ensure debt sustainability, domestic primary spending would be limited to about 11 percent of GDP, similar to what was envisaged pre- pandemic for 2020. The authorities agreed with staff that, in view of the pandemic appearing contained and the fact that most of supplementary budget’s Covid-related allocation had still to be executed, there was a limited need for additional such spending at this stage. Overall, the domestic primary deficit would decline to 4 percent of GDP, from 6¼ percent of GDP in 2020 and compared with a medium-term objective of 2½ percent of GDP.

17. While at a high risk of debt distress, C.A.R.’s debt level is assessed to remain sustainable. Despite the slight downward revision of growth projections, the conclusions of the debt sustainability analysis (DSA) are essentially unchanged from those of the April 2020 DSA. Over the medium term, the liquidity indicators are projected to exceed their thresholds owing mainly to the increase in repayments due to the Fund, which have been accentuated by the RCF disbursement. In this context, the authorities agreed on the need to continue to pursue a prudent approach to contracting new external debt, prioritizing grant financing with some limited room for concessional loans.

B. Structural Fiscal Issues

The authorities reiterated their commitment to strengthen public institutions. They intend to pursue reforms aimed at improving PFM, strengthening tax and customs administration, digitalizing procedures, promoting fiscal transparency, enhancing the oversight of public agencies and enterprises, and improving debt management.

18. Consistent with their commitment under the RCF, the authorities will ensure the transparency and efficiency of Covid-related spending. The committee in charge of their monitoring will continue to publish monthly data on these expenditures as well as on the results of the related tenders. The Court of Auditors will conduct an audit of these expenditures, which will be published by end-April 2021 (proposed new SB, MEFP ¶24).

19. The authorities will continue PFM reforms, including to strengthen the budget process, consolidate the TSA, and reduce arrears. Given the delays in rolling out the new integrated financial management system SIM-BA, the authorities requested World Bank TA to assist them in prolonging the use of the existing system GESCO. The authorities are now intending to repay all their domestic arrears by end-2021.5 They will also streamline the administrative process pertaining to retirement of civil servants to avoid the accumulation of pension arrears in the future. The electronic payment of salaries will be extended to all defense and security forces and then to the national education and health sector personnel. The authorities are committed to improve the coordination between the debt unit and the Treasury directorate in order to avoid the accumulation of external arrears. Indeed, no less than one month before each due date for the external debt, the debt service will send an official reminder note to the Treasury directorate in order to make the related payment (MEFP ¶25).

20. Other measures will aim at enhancing spending efficiency and transparency. The elimination of public agencies without economic justification will be enacted by end-April (proposed new SB), which will help free up resources for priority expenditures. With a view to increasing its efficiency, the authorities have asked the World Bank to conduct a review of the government’s social spending. The authorities will mandate the on-line publication of the full text of all procurement contracts (whether or not related to the COVID-19 pandemic) of more than CFAF 5 million within 30 days of their award, along with the names of the beneficial owners of the awarded legal entities (proposed new end-September 2021 SB, MEFP ¶24).

21. The authorities will also pursue their efforts to strengthen domestic revenue mobilization through digitalization and improved coordination between customs and tax administration:

  • To significantly increase the hitherto very limited number of corporate taxpayers, the tax directorate will identify by end-year 300 largest importers and 200 largest beneficiaries of public tenders. It will then audit those of these enterprises that do not have a valid fiscal identification number, whose turnover does not appear consistent with the information derived from the public tenders/imports, or/and are not current with their tax obligations. The results of these audits will be published by end-June 2021 (proposed new SB, MEFP ¶27).

  • The e-filling and e-payment of tax obligations will be extended to small- and medium-size enterprises (MEFP ¶27).

  • The authorities will conduct monthly meetings between the service provider and the customs department to reconcile import valuations and take corrective measures when significant discrepancies are identified. They will also finalize in early 2021 the interconnection between the customs posts of Douala, Berberati, and other border cities with the central services in Bangui. Pending the securing of imports between Douala and the border, this will notably allow for the reconciliation of data on goods recorded by these two locations (MEFP ¶27). The authorities are also committed to verify of the use of imported goods exempt from custom duties.

22. Public sector oversight will be strengthened further. The legal framework for public entities and enterprises will be finalized through the adoption of the texts specific to certain categories of public entities and training and will start to be implemented. The authorities will notably work toward the publication by September 2022 of the financial statements of some of the largest public enterprises.

C. Other Structural Reforms

23. The authorities remain committed to enhancing the business environment, with the support from development partners. Once the AfDB and World Bank comments accommodated, the draft mining code will be submitted to the government, and then to Parliament in the first half of 2021. The authorities have also requested World Bank assistance to help them assess whether the recent increase in parafiscal taxes on telecommunications companies is adequate and not a potential impediment to the development of the sector and to the government’s digitalization strategy. The authorities will review the direct taxes and fees levied directly by line ministries, eliminate those without justification, and transfer the others to the TSA (MEFP ¶29).

24. The authorities will pursue their efforts to strengthen governance. At their request, and in close coordination with the World Bank and UNODC, staff helped the authorities draft an anticorruption action plan. This action plan will be informed by the recommendations of the governance diagnostic mission conducted by the Fund last year, and calls for strengthening the powers of the good governance institution (HABG) (MEFP ¶28). They will also draft a new anti-corruption law, which will be submitted to Parliament (proposed new SB). The new anti-corruption law will lay the legal foundations to bring the anti-corruption legal framework of C.A.R. in line with international good practices (MEFP ¶28). Once the asset declaration law is adopted, the authorities will also issue the relevant implementing decree(s) in consultation with Fund staff.

25. The authorities intend to intensify financial sector reforms. Although the banking sector’s financial soundness indicators (FSI) are relatively strong, financial inclusion is very weak (with most of the population lacking access to the financial system), and banks emphasize several obstacles (mostly legal) in their quest for expansion. The Economic and Financial National Committee (ETNC), replacing the National Credit Council (NCC), still aims at implementing the recommendations from the 2017 COBAC mission and from the joint 2018 conference between the financial sector and the judiciary system to enhance the trust between the financial sector and the authorities. The authorities have also reiterated their commitment to enhance financial inclusion and tax collection through the development of mobile and online banking and the establishment of a co-financing mechanism of commercial loans to SMEs.

Capacity Building

26. The Fund continues to support the implementation of the Capacity Development (CD) Strategy for C.A.R. given the importance of the integration of CD with program modalities. Staff discussed these priorities with the authorities to make sure that their prioritization and sequencing are closely aligned with the program objectives. While no new CD priority needs for the short term have emerged in the context of the pandemic, the authorities expressed their interest in customized TA on Financial Programming and Policies, to be delivered virtually in March 2021.

27. With the pandemic substantially hindering field delivery, TA missions have been conducted virtually for the most urgent CD projects. Fund TA has been restricted since the onset of the crisis and physical TA missions remain suspended, which has made more difficult the implementation of structural reforms to which the authorities committed under the current ECF- supported program. Some Fund TA is, however, being delivered online, notably on revenue administration, Treasury processes, macro-economic statistics, and asset declaration. Limited internet access complicates this virtual delivery.

Program Issues

28. The authorities are requesting waivers of non-observance of missed end-December and end-June PCs and of the continuous PC on the non-accumulation of arrears, based on their corrective actions (Letter of intent). These actions include: (i) the measures taken to improve the transfer of the public agencies’ revenue to the TSA (¶8) and commitments to implement other revenue mobilization measures (¶23); (ii) the connection of the Treasury directorate to the BEAC’s Sygma-Systac system (MEFP,¶13), which allows it to follow more closely liquidity; (iii) the envisaged savings to ensure that Covid-related expenditures are financed in a sustainable way (¶17); (iv) the clearance of the external arrears to FIDA (¶9) and the enhanced coordination between the debt unit and the Treasury directorate to avoid the recurrence of external arrears (¶20); and (v) the submission to Parliament of a 2021 budget law in line with the ECF objectives (¶18).

29. In view of the large uncertainty surrounding the macroeconomic outlook, it is proposed that the number of QPCs be brought back to three (domestic government financing, domestic revenue, and primary fiscal balance). It is also proposed that the current QPC on the repayment of domestic arrears be replaced by an indicative target to allow the authorities more flexibility in addressing potential liquidity issues in an uncertain environment.

30. The following prior actions have been established for this review: (i) submission to Parliament of a 2021 draft budget law in line with program commitments; (ii) capture all the 2018 and 2019 corporate tax returns into the SYSTEMIF IT system (missed end-September SB); and (iii) submission to Parliament of a draft law aligning the asset declaration regime with the applicable international good practices. (missed end-September SB).

31. The program for the next 12 months is fully financed. In addition to the projected Fund disbursements under the ECF, which are expected to follow the original schedule (Table 10), and support under the CCRT, the authorities have already received firm commitments regarding budget support and project grants from key multilateral and bilateral developments partners (World Bank, European Union, France, and AfDB; Table 5). The authorities are also participating in the G-20 Debt Service Suspension Initiative (DSSI) and have indicated their intention to request the extension through the first half of 2021. Financing prospects are also good for the remainder of the program period. The original schedule of ECF program disbursements remains valid (Table 10).

Table 1.

Central African Republic: Selected Economic and Financial Indicators, 2018–25

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Sources: C.A.R. authorities and IMF staff estimates and projections.

Expenditure is on a cash basis.

Excludes grants, interest payments, and externally-financed capital expenditures.

The changes in domestic debt estimates reflect a correction of the estimates reported in the RCF’ staff report tables, which had not been updated. This did not affect the debt sustainability analysis.

Comprises government debt to BEAC, commercial banks, and government arrears.

Table 2a.

Central African Republic: Central Government Financial Operations, 2018–25

(Billions of CFAF)

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Sources: C.A.R. authorities and IMF staff estimates and projections.

Expenditure is on a cash basis.

Excludes grants, interest payments, and externally-financed capital expenditure.

Budget support loans to be identified from 2023 to 2024.

This grant covers the first 12 months (2 tranches of 6 months) of the CCRT, i.e. 2020Q2–2020Q3 and 2020Q4–2021Q1.

Comprises government debt to BEAC, commercial banks, and government arrears.

Table 2b.

Central African Republic: Central Government Operations, 2018–25

(Percent of GDP)

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Sources: C.A.R. authorities and IMF staff estimates and projections.

Expenditure is on a cash basis.

Excludes grants, interest payments, and externally-financed capital expenditure.

Budget support loans to be identified from 2023 to 2024

This grant covers the first 12 months (2 tranches of 6 months) of the CCRT, i.e. 2020Q2–2020Q3 and 2020Q4–2021Q1.

Comprises government debt to BEAC, commercial banks, and government arrears.

Table 3.

Central African Republic: Monetary Survey, 2018–25

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Sources: C.A.R. authorities and IMF staff estimates and projections.