IMF hails progress made in CAR through political agreement for peace
Bangui, Central African Republic (PANA) – The International Monetary Fund (IMF) has welcomed the progress made in implementing the Political Agreement for Peace and Reconciliation (APPR) signed on February 6, which has contributed to a steady reduction in violence in the Central African Republic (CAR).
“Although this progress remains fragile, it shows the potential of the agreement in improving the security in C.A.R. and thereby create the conditions for sustained growth and sustainable poverty reduction,” said Mr. Édouard Martin, who led an IMF staff team on visit to Bangui (from October 28 to November 8, 2019 to discuss the programme of economic policies and reforms that the government of Central African Republic intends to implement over the next three years,
In a statement he issued on Saturday, Mr. Martin said that recent economic developments in the country have been generally favourable. Economic growth, driven by mining, forestry, and construction, is expected to reach 4½ percent this year and 5 percent next year.
He said that inflation remains contained, being forecast at around 3½ percent in 2019 and less than 3 percent in 2020. The current account deficit is expected to shrink to 5.5% of GDP in 2019, mainly due to the exceptional level of budget support granted by the economic and financial partners.
In addition, the CAR’s banking sector remains largely capitalized and liquid. However, tax revenues were below expectations. “This is all the more concerning as revenue mobilization is critical to the sustained financing of the country’s most pressing spending needs,” Mr. Martin pointed out.
Discussions of the authorities of CAR and the IMF mission focused on the programme of economic policies and structural reforms that the government intends to implement over the next three years in the context of the Recovery and Peacebuilding Plan (RCPCA) and which could be supported by the IMF through a new arrangement under the Extended Credit Facility.
“Building on the progress made over the past three years, this programme will aim to further reduce fiscal and external imbalances while promoting strong and sustainable growth and poverty reduction.
“It will be based on a sound fiscal policy aimed at ensuring sustainable financing of humanitarian, social, security, and infrastructure spending needs through further domestic revenue mobilization efforts and rationalization of non-priority spending. It will also be based on an ambitious and realist programme of structural reforms aiming at: further strengthening the institutions and governance in the country, which is essential for strengthening social cohesion; and removing bottlenecks and regulatory barriers to private investment.
“These discussions have been productive and will continue in the coming days, with a view to submitting a new arrangement to our Board of Directors by the end of the year,” said the IMF Mission leader.
According to Mr. Martin, CAR’s “favourable economic outlook is subject to substantial risks: downward, owing to the volatile security situation and the risks of a slowdown in the global economy; and upward, in connection with the implementation of the peace agreement.”
-0- PANA AR 9Nov2019
