Abstract
A confluence of pre-existing structural factors and recent macroeconomic shocks are contributing to the aggravation of food insecurity in the Central African Republic. The government has a limited capacity to respond through social protection programs, due to fiscal and institutional fragility. Under the circumstances, the near-term response to reduce the adverse impacts includes increased humanitarian aid and resumption of donor support in the form of grants. In the medium to long term, policies to address the structural drivers of food insecurity should be part of government’s development agenda, acting on all four dimensions of food security—availability, access to, utilization and stability of food.
Addressing Food Insecurity in the Central African Republic-Challenges, Drivers, and Policy Options1
A. Executive Summary
A confluence of pre-existing structural factors and recent macroeconomic shocks are contributing to the aggravation of food insecurity in the Central African Republic. The government has a limited capacity to respond through social protection programs, due to fiscal and institutional fragility. Under the circumstances, the near-term response to reduce the adverse impacts includes increased humanitarian aid and resumption of donor support in the form of grants. In the medium to long term, policies to address the structural drivers of food insecurity should be part of government’s development agenda, acting on all four dimensions of food security—availability, access to, utilization and stability of food.
B. Background
1. The Central African Republic (CAR) has one of the highest prevalence of food insecurity in the world. The prevalence of severe food insecurity reached 61.8 percent of the population on average in 2019-21 (Figure 1). According to estimates from the Integrated Food Security Phase Classification by the Food and Agriculture Organization of the United Nations (FAO), 2.2 million people, or 44 percent of the population, experienced elevated levels of acute food insecurity between April and August 2022. The majority of the affected live in rural areas and mainly rely on agriculture for their livelihoods. Amid conflict, undernourishment rates surged since 2013 and remain among the worse in Sub-Saharan Africa (SSA) and in the world (Figure 2)2,3. Furthermore, the UNICEF estimates that 40 percent of children under five are already suffering from chronic malnutrition, a rate above the emergency threshold of 30 percent. With such high rate of malnutrition, the country is likely to continue to rank near the bottom on Human Development indicators, especially education and health.
Central African Republic: Prevalence of Severe Food Insecurity
(Percent of population)
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Source: Food and Agriculture Organization of the United Nations (FAO)Central African Republic: Prevalence of Undernourishment
(Percent of population)
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Source: FAO2. Elevated food insecurity in the CAR is a drag to the country’s long-term economic potential. Food insecurity and malnutrition carry a high cost in terms of foregone economic opportunities, which can extend into future generations (FAO and OECD 2014). With almost half of the population lacking access to adequate food, there is a risk that children school dropout will increase among coping households in the affected areas. This would lead to permanent negative effects on the productivity of the future cohort of workers. Food insecurity in the CAR also risks exacerbating the existing conflict and political instability, trapping the country permanently into poverty (Figure 3). As recently discussed in IMF (2022a), the CAR is among 48 countries that are most affected by the ongoing food crisis both from a balance-of-payments and humanitarian needs perspectives. Accordingly, food insecurity is likely to impede real GDP growth rates sufficient to reduce poverty.
Central African Republic: Food Insecurity, Malnutrition, and Poverty as Interrelated Phenomena
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Source: FAO Food Security Programme, 20083. CAR’s food insecurity cannot be dissociated from its classification as a fragile and conflict-affected state (FCS). As part of the Congo Basin—the second largest rainforest in the world in size after Amazon rainforest—and among the highest arable land per capita in Africa, CAR’s level of food insecurity stands as anomaly. However, political instability and violent conflicts between different armed groups all around the country have contributed heavily to this outcome.
C. The Rising Challenge of Food Insecurity
4. The ripple effect from Russia’s war in Ukraine is the latest of successive crisis in recent years, that have triggered new waves of food shortages in the CAR. Food supply in 2021 was hit by the COVID-19 pandemic and related supply chain disruptions, and renewed violence and insecurity amid election disputes. The situation worsened in 2022 when CAR faced a negative terms of trade-shock on account of rising food and fuel prices triggered by the war in Ukraine. The higher fuel price negatively impacted humanitarian agencies’ transportation costs and relief efforts, limiting the resources available for food assistance. The number of people experiencing elevated levels of acute food insecurity is expected to rise to 2.7 million between September 2022 and March 2023, and may reach 3 million between April and August 2023 if no additional assistance is provided.
5. The Government’s limited capacity to respond to rising food insecurity underscores the need for building a social protection system. CAR’s stressed public finances, very low tax revenue, deteriorated institutional capacity after the war, and the temporary nature of humanitarian aid perpetuate food insecurity. The country has no system of social protection in place. Existing transfers and subsidies account for about 2.4 percent of GDP in the draft 2023 budget, which includes pensions (0.5 percent of GDP), and transfers (1.5 percent of GDP) and other spending (0.4 percent of GDP) that are not necessarily targeted to social protection. In response to limited space for social protection, the government has attempted to insulate the public from rising food and fuel prices through discretionary policies such as fuel subsidies financed by foregone VAT and import tariff revenue, further magnifying fiscal fragility. Building a social protection system through the budget would provide the basis for a more efficient response.
6. Absent a social protection system, near-term food assistance in the CAR relies heavily on humanitarian aid, while longer-term programs depend on off-budget donor funding. From the pandemic to date, food security spending from partners increased both in nominal terms and as a share of total humanitarian assistance, with an uptick in 2022 as the war in Ukraine drove food prices up. Food security accounts for the largest share (40.5 percent) of total humanitarian assistance in the CAR estimated at US$ 403.7 million in 2022 (Figure 4).
Central African Republic: Humanitarian Food Security Assistance from International Aid Partners
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Existing assistance is geared towards short-term relief and long-term resilience projects.
The World Food Program (WFP) is a major player with regards to short-term aid, mainly through its unconditional food assistance program, which includes food distribution and cash-based transfers. The program accounts for almost two-thirds of all WFP’s aid operations, estimated at around US$90 million on average in 2019-2021 (Figure 5).
Figure 5. Central African Republic: WFP Humanitarian Operations
(US$ million, 2019-2020)
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Source: WFPAnother program is the World Bank’s PACAD approved in 2021. With a US$16 million envelope, PACAD has provided targeted mobile money transfers to internally displaced households and those impacted by the pandemic and floods.
Other programs focus on improving food security in the longer term, including two World Bank programs: Agricultural Recovery project (US$25 million for 2019-24), and the Urgent Response to the Food Crisis project (US$50 million for 2021-24) implemented in coordination with the WFP and the Food and Agriculture Organization of the United Nations (FAO). Among other objectives, these programs seek to strengthen rural infrastructure development and agricultural markets, and strengthen access to inputs (fertilizer, seeds) and equipment for smallholders, respectively. Other partners such as the European Union also support food security indirectly through off-budget rural and agricultural development projects.
7. While humanitarian organizations have provided crucial food aid assistance, their recently rising funding gap calls for further financing from the international community. For example, the deteriorating situation since early 2022 has led to an increasing financing gap that will require a scaling up of funding. For instance, WFP’s six-month net funding requirement—a measure of the funding gap to conduct food assistance operations—has again surged after the food price crisis triggered by the war in Ukraine in early 2022 (Figure 6). In 2022 only, WFP’s estimated needs amounted to US$ 217.3 million, while only 54 percent of that amount was available from donor contributions. Addressing the funding shortfall will require a scaling up in donor contributions, in the form of grants and humanitarian assistance.
Central African Republic: WFP’s Six-Month Net Funding Requirement
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Source: WFP and IMF Staff CalculationsD. Drivers of Food Insecurity
Macroeconomic Drivers
8. Recent macroeconomic shocks are exacerbating pre-existing structural drivers of food insecurity. The country’s cereal import dependency is over 20 percent, while wheat dependency is about 12 percent (Figure 7). While these food dependency ratios are low relative to SSA average, the CAR’s fragility worsens the overall impact. For example, with the sharp increase in commodity prices, the UNOCHA estimated that its programs in CAR “expect a 30 percent increase in the price of rice, a 67 percent increase for the price of wheat flour and a staggering 70 percent increase in the price of vegetable oil”. The story is not much different for fuel. As global fuel prices increased, a parallel market surged where fuel is sold at a premium price, impacting humanitarian agencies’ transportation costs and relief efforts.
Sub-Saharan Africa: Cereal and Wheat Import Dependency
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Structural Drivers
9. Food insecurity in the CAR also reflects structural factors that hinder all four dimensions of food security—availability, access, utilization, and stability. As defined by FAO (2008), availability refers to availability of sufficient quantities of food of appropriate quality, supplied through domestic production or imports. Access refers to access by individuals to adequate resources for acquiring appropriate food for a nutritious diet. Utilization refers to utilization of food through adequate diet, clean water, sanitation, and health care to reach a status of nutritious well-being. Stability refers to the ability to access adequate food at all times.
Availability
10. Availability of food in the CAR is critically constrained by political and structural factors that deter productivity growth in agriculture. The amount of food supply available from domestic production is low, translating into lower kilocalories per capita per day relative to the average of both Africa and the world. Behind this divide is the low agricultural productivity, which has stagnated for many years. Although the share of agriculture in GDP has declined significantly since 2013, such decline is rather a result of the deteriorating security situation, especially in rural areas impacted by violence from armed groups, rather than increasing productivity (World Bank 2022). Moreover, productivity growth remains highly constrained by limited access to seeds and fertilizers, together with incipient extension services. For example, the usage of fertilizer in agriculture is only a small fraction of the levels seen in other developing countries (Figure 8), resulting in very low yields of basic crops such as maize and rice. As a result, agricultural yields over time have remained low and unstable. The incipient domestic production of food makes CAR highly dependent on imports which in turn makes food security highly prone to international prices and the exchange rate.
Central African Republic and Selected Regions: Food Supply and Nutrient use in Agriculture
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Access
11. Access to food is also inadequate for a large share of the population due to widespread poverty and unaffordable costs. The cost of accessing a healthy diet (by FAO standards) is almost three times higher than the average expenditure on food. As a result, almost the whole population cannot afford a healthy diet (Figure 9). Furthermore, underdeveloped road and transport infrastructure amid conflict environment also constrains physical access to food as linkages between rural agricultural markets and food commercialization networks fail to emerge.
Central African Republic and Sub-Saharan African Countries: Affordability of Food
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Utilization
12. Utilization of food—storage and processing—is unsafe due to precarious access to safe drinking water for a significant part of the population. Access to safe water—a key ingredient for processing and cooking—is limited to 6 percent of the population. The interaction of unsafe water and the almost absence of basic sanitation services (available to only 14 percent of the population), reduces the prospects for safe utilization of food (Figure 10). Even where safe water and sanitation is available, low educational attainment reduces the ability to access and digest nutritional information.
Central African Republic and Selected Regions: Use of Safe Water and Sanitation Services
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Source: FAOStability
13. Stability of food is challenged by permanent conflict and environmental issues, perpetuating the trap of limited availability, inadequate access to, and unsafe utilization. As documented in World Bank (2022), CAR’s agriculture sector has been particularly vulnerable to the various episodes of conflict, violence, and coups since independence in 1960. As a result, there has been significant variability in food production and per capita food supply over time, an indication that individuals do not have access to adequate food at all times. Because of population displacement (currently estimated at around 25 percent of the population, Figure 11), households have been unable to engage in agricultural and livestock activities, resulting in a depletion of food stocks, rising prices, the adoption of negative coping mechanisms by nearly half of the population and increased dependency on food aid. Livelihoods are further destroyed by climate shocks, including torrential rains and extreme flooding, that are seasonally prevalent in different parts of the country. The ND-GAIN Index ranks CAR 180 out of 181, indicating the high level of vulnerability to climate change shocks. Climate change is expected to further intensify food insecurity (IMF 2022b).
Sub-Saharan Africa: Displaced People (2022)
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
E. Policy Options
14. Achieving a food secure CAR calls for near-term emergency interventions, while addressing the structural drivers of food insecurity through medium-to-long-term policies. Macroeconomic shocks could dissipate as the surge in global food prices eases, oil prices decline, and the war in Ukraine is resolved. However, structural drivers of food insecurity cannot be effectively addressed in the near term given their myriad dimensions discussed earlier. The political situation in the country remains fragile, with limited elite consensus towards a durable solution. Climate and environmental factors are projected to worsen, considering CAR’s susceptibility to flood and drought, further worsening displacement and food insecurity. Thus, policies to address the structural drivers will likely yield results only in the medium to long term.
Near-Term Measures
15. Immediate measures should focus on alleviating food pressures and mitigating the humanitarian crisis with help from aid partners. In the absence of strong social security programs from the government, and given the limited fiscal space, the authorities should continue to appeal for external humanitarian support. Humanitarian aid partners already have a very strong field presence in the CAR, and can deploy quickly to expand their food, humanitarian assistance and protection programs. Many of their programs assist to mitigate fragility because of their cross linkage to distribution of agricultural and livestock inputs, access to safe water and adequate sanitation, health, and nutrition systems reforms.
16. Donor budget support could help protect vulnerable groups not supported by humanitarian assistance, such as pensioners and students, while safeguarding transparency. Pension and scholarship transfers currently account for 0.8 percent and 0.1 percent of GDP, respectively, with the former being the single most important budget line within transfers and subsidies. Both groups were highly negatively impacted by higher fuel- and food-driven inflation (Box 1). While pension and scholarship spending increased by about 3 percent in nominal terms in 2022, annual inflation was much higher at around 11 percent, depressing their purchasing power. Additional donor budget support would help free resources to support pensioners and vulnerable students, as well as to ensure timely wage payments to civil servants coping with higher food prices. To address potential transparency issues over the use of funds, the authorities could leverage the recent experience of the Ministry of Finance’s Fiduciary Management Committee in producing quarterly monitoring reports and ex-post audits.
Social Protection amid the Global Food Price Crisis in the Central African Republic
The CAR is being severely impacted by the global food and fuel price crisis. Despite the lack of a social protection system in the country, the budget has allocations for some social spending, including old age pensions and scholarship assistance to university students. There is room to support the government through direct budget support to help mobilize resources to these spending items.
Old-age pensioners are among the most vulnerable. There are currently a total of 15,000 pensioners for a total pension spending of around CFAF 12 billion per year (0.8 percent of GDP in 2022). This is equivalent to only CFAF 6,666 (around US$10) per month per pensioner in a country where, according to FAO data, the cost of a healthy diet is among the most unaffordable in the world. With recent cash flow pressures due to rising fuel and food prices, to be able to meet its obligations with pensioners, the government has cut spending in other budget lines, including through accumulation of arrears in scholarship spending (more on this below). However, while such reallocation helped maintain the nominal monthly value of pension benefit for pensioners, it does not address the significant loss in purchasing power. With rising food prices, y/y inflation is estimated to have reached 11 percent in 2022, depressing the pension value in real terms.
Central African Republic: Pension and Scholarship Spending
Citation: IMF Staff Country Reports 2023, 156; 10.5089/9798400239946.002.A002
Source: Central African Republic AuthoritiesScholarship arrears have impacted vulnerable students. Total scholarship assistance accounts for 0.1 percent of GDP in 2022. Scholarship support is provided to 4,350 university students, of which 3,300 studying in the country and the remaining abroad. The monthly stipend for domestic students is CFAF 30,000 for nine months (around US$48). Beneficiaries are selected and retained based on social need (firsttime application) and academic merit, respectively. Scholarship payments in the academic year 2021/22 reached CFAF 2.35 billion, of which CFAF 1.45 billion to students abroad and the remaining to those in the country. The total amount envisaged in the 2023 budget is CFAF 2 billion. Recently, not only the real value of scholarships was depressed by higher inflation but, due to cash flow problems related to declining tax revenue, the government also accumulated arrears on stipend payments to domestic students in the academic year 2021/22. Some payments that were due to students abroad in the academic year 2020/21 were not paid, either putting the total amount of arrears at CFAF 370 million by December 2022.
Protecting old-age pension and student scholarship can help mitigate the impact of rising fuel and food prices. Pensioners are among the most vulnerable groups in the CAR given the extremely low value of the monthly payment entitled to them and the lack of alternative occupation at old age in a country where 80 percent of employment is in subsistence agriculture that requires active physical labor. Although the old-age dependency ratio is low (5 percent in 2021) due to a young population, the poverty rate among the old is likely to be high given that over 70 percent of the population lives below the international poverty line. On the other hand, university students have been negatively impacted by stipend arrears since 2020. These risks increasing the school dropout rate, resulting in foregone human capital in a country where the percentage of the population with university degree is low. It would also result in wasted budgetary resources allocated to stipends in the past.
Medium-to-Long-term Policies
17. Improvement in political stability would come from eliminating conflict and its root causes. Such improvements would come from progress on the peace agreements and consensus building on governance and other issues underlying the conflicts. A successful political solution would create the environment for effective implementation of economic policies and strengthen the stability dimension of food security. The reintegration of ex-combatants into the social life and labor market is also key to preserve stability. This will require investments in human capital development, including vocational and other skills.
18. Efforts should be made to increase agricultural productivity through higher usage of modern inputs, rural infrastructure development and secure access to land. Rebuilding the agriculture sector is vital to food security, including in the post-conflict reconstruction period. According to FAO’s estimate, every US$1 invested in crop production can yield approximately US$12 in food (FAO 2022). Stopping conflict alone can already remarkably boost agricultural productivity by unleashing the labor potential. Nevertheless, even within the current context, the government and humanitarian organizations can support productivity growth by supplying inputs such as higher yielding seeds, improved fertilizers, and extension services, including in conflict-affected areas to the extent that some stability is present. Furthermore, considering that the agriculture sector still employs more than 80 percent of the labor force, a recent diagnostic by the World Bank concludes that policymakers should prioritize agricultural infrastructure development, targeting rural and marginalized communities. A careful agricultural land reform that helps individuals secure land titles, particularly in rural areas, can also avoid fueling future conflicts.
19. Effective social protection programs run by the government can be introduced to improve affordability of and access to food, backed by higher domestic revenue mobilization. Considering that access to adequate food is unaffordable to almost the whole population in the CAR, targeted cash transfer-based social protection programs hold the potential to help attenuate food insecurity. However, establishing a meaningful social protection program in the context of CAR will require a concurrent increase in tax revenue which currently stands at only 8 percent of GDP, among the lowest in the World. In the meantime, with technical assistance from the Fund, the World Bank and other partners, the authorities could explore reforms to increase tax revenue in the medium to long term, while laying the foundations for a solid social protection system in the future. Such foundations include continuing the work in progress to establish a global social protection policy, the single registry of vulnerable people, among other actions.
20. The authorities can also help improve food resilience by tapping into global climate funds to strengthen the adaptation of the agriculture sector to climate change. As CAR’s agricultural output is highly impacted by climate change- and environment-related shocks, the authorities could benefit from applying to global climate projects aimed at increasing agriculture adaptation to climate shocks. This could be achieved by partnering with global climate funds such as the Adaptation Fund, the Global Environment Facility, and the Green Climate Fund, from which grants and concessional loans are potentially available to CAR and other countries vulnerable to climate change. Access to these funds (with available financing of US$3.7 billion in 2021 only) could help increase space for food security-related spending. Historically, like several other low-income countries, the CAR has had a very limited access to climate funds. During the period 2008-2021, the country secured from climate funds disbursements of only US$8.1 million, out of approved funds amounting to US$27.8 million. Gaining a greater access to climate funds requires pre-conditions that include, among others, political stability, transparency of public financial management, and capacity to prepare climate adaptation projects. The latter can be addressed by applying to climate funds in partnership with accredited institutions such as the World Bank or the UN.
21. Digital technology can be increasingly employed to reduce the cost of humanitarian operations, while extending their reach. There is room to expand cash transfers towards mobile money-based ones. While mobile money technology is available from local telecom operators, its use in cash transfer programs is still incipient in the CAR and currently only applied within the World Bank’s PACAD program. However, the low level of CAR’s digital connectedness limits the extent to which cash transfers can be digitalized in the current juncture. According to ITU data, in 2020 only 38 percent of CAR’s population had a mobile phone subscription (compared to an average of 83 percent and 106 percent in Sub-Saharan Africa and the World, respectively). Looking ahead, it will be critical to address this problem which is in part made worse by recurring conflict preventing the needed digital infrastructure upgrade in rural areas. The ability to deploy mobile money-based transfers would help reach more beneficiaries with lower operational costs.
F. Conclusions
22. The current food insecurity shock in the CAR results from a confluence of pre-existing structural factors and recent macroeconomic shocks that emerged after the war in Ukraine at a time when the recovery from the pandemic was still fragile. The government has a limited capacity to respond through social protection programs, due to fiscal and institutional fragility. Under the circumstances, in the near term, the authorities have the following options to reduce the adverse impacts of food insecurity (i) continue to appeal for increased humanitarian aid; and (ii) work to resume donor budget support by addressing transparency and governance issues. In the medium to long term, policies to address the structural drivers of food insecurity should act on all four dimensions of food security—availability, access to, utilization and stability of food. In this regard, key measures include resolving the long-standing conflict, investing in the agriculture sector for higher productivity, deploying a robust social protection system backed with higher domestic revenue mobilization, and expanding access to safe drinking water and sanitation services.
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Prevalence of undernourishment (PoU) is FAO’s traditional indicator used to monitor hunger at the global and regional level and is based on country data on food availability, food consumption and energy needs. It estimates the adequacy of a population’s dietary energy intake.
According to FAO guidelines, a person is considered to be in severe food insecurity when he or she has run out of food and has gone an entire day without eating at times during the year.
