Central African Republic: Peace, decisive reforms remain key to CAR’s recovery - IMF

Bangui, Central African Republic (PANA) – Restoration of peace, redeployment of the state, and decisive implementation of reforms will be key to achieve sustained economic recovery and medium term growth in Central African Republic (CAR) above the projected 4 percent for this year, according to an International Monetary Fund (IMF) staff team that on Wednesday concluded its visit to the capital, Bangui.

“The success of the authorities’ economic programme hinges on, and contributes to peace and reconciliation,” remarked Samir Jahjah who led the team to conduct discussions on the third review of the programme supported by an Extended Credit Facility (ECF).

Despite a deteriorating security environment, the CAR’s macroeconomic performance remains good, according to the IMF team.

“Economic growth is expected to reach 4 percent in 2017, supported by the good performance of the forestry and mining sectors. However, renewed violence weighs on agricultural production. Inflation is projected at 3.8 percent by end-year, and to decline gradually over the medium term,” the team noted in a statement.

IMF staff and CAR authorities reached broad agreement on policies which could form the basis for completing the third review. Also, they encouraged the authorities to intensify revenue mobilization efforts, while reigning in parafiscal taxes which hamper private sector development.

“These efforts will help create fiscal space for additional pro-poor and investment spending which is critical to reduce poverty and create jobs and growth,” the IMF staff underlined..

Commending the authorities for progress achieved in implementing their economic reform agenda, the IMF team noted that all quantitative performance targets were met except for underperforming tax revenues.

“Good progress has been made in the implementation of reforms to enhance transparency, accountability and treasury management. As a result, wages and pensions have been paid regularly and spending on social sectors and infrastructure have increased,” said Mr. Jahjah.

“The team welcomed the government’s decision to accelerate the clearance of commercial and social arrears to support social cohesion and peace.

“An independent audit which will be finalized in October is crucial to guide the arrears clearance process. The large amount of social arrears to be cleared calls for the adoption of a time-bound plan and adequate procedures to ensure transparency and accountability,” he added.
-0- PANA AR 4Oct2017

04 october 2017 19:13:03

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