CAR: Peace dialogue with armed groups likely to boost CAR's economic growth

Bangui, Central African Republic (PANA) -  Economic growth of Central African Republic (CAR) in 2017 is projected at 4.7 percent, assuming the ongoing dialogue with armed groups helps to reduce violence and destruction of property, and public and private investment rebound, according to a staff team of the International Monetary Fund (IMF) that visited the country's capital, Bangui, from 26 May to 1 June.

“Deterioration in the security environment disrupted trade, agriculture and mining in the last quarter of 2016, pushing growth for 2016 down to 4.5 percent, slightly lower than initially programmed, and inflation is estimated at 4.6 percent," observed Samir Jahjah, who led the IMF team to finalize discussions with CAR authorities on the second review of the country's programme supported by an arrangement under the Extended Credit Facility (ECF).

"The country's economic programme is broadly on track. All quantitative performance criteria were met. The implementation of the programme’s structural benchmarks is broadly on track," said Mr. Jahjah, affirming that the IMF team has reached a staff-level agreement with the authorities on economic and financial policies that could support approval of the second review under the ECF.

In his statement at the conclusion of the visit, he said that consideration of the report on the second review by the IMF Executive Board is tentatively scheduled for July 2017. On 20 July 2016, the Board approved CAR's arrangement for a US$116 million credit facility.

"Looking forward, the government remains committed to taking any measures necessary to achieve its key objectives in the Fund supported programme, including stepping up social spending, scaling up public investment, and increasing domestic revenue," Mr. Jahjah said.

In the IMF team's opinion, CAR's private sector development would hinge on the government’s actions to streamline excessive para-fiscal taxes, create a level playing field by eliminating ad hoc exemptions, and clear outstanding government arrears to small and medium-sized enterprises.

Also, the team observed that average inflation in the country  is projected to decline to 3.8 percent in 2017, supported by increased food supply.

“The IMF team urged the authorities to maintain and step up the reform momentum in improving domestic revenue mobilization and expenditure management, and limit borrowing - including of highly concessional loans - to safeguard debt sustainability.

"Specifically, the team discussed with the authorities measures to rationalize the tax system; streamline extra budgetary levies; strengthen revenue administration; address customs revenue shortfalls; enhance reporting on budget execution; and accelerate clearance of domestic arrears, especially of social debt," Mr. Jahjah said in a statement made available to PANA on Friday.
-0- PANA AR/MA 2June2017

02 june 2017 08:25:16

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