Central African Republic
- Capital: Bangui
- Region: Central Africa
- Official languages: French and Sango
- Independence Day: August 13, 1960
- Area: 623,000 sq km
- Population (2018): 4.7 million
- REC membership: CEN-SAD, ECCAS
- WTO membership: May 31, 1995
- GDP (2018): US$ 2.22 billion
- GNI per capita (2018): US$ 490
- Currency: Central african CFA franc
The Central African Republic’s economy is improving, despite a difficult security and humanitarian environment. Real GDP growth increased from 3.8% in 2018 to 4.5% in 2019, spurred by the steady recovery of agricultural and mining activities. However, inflation rose to 3.5% in 2019 (up from 1.6% in 2018) due to food supply problems and the security situation in some farming areas.
The fiscal balance was in surplus in 2019 (2.4% of GDP compared with 0.4% in 2018), thanks to better control of public expenditure and a gradual increase in revenue as a result of the implementation of fiscal measures. Following the IMF reform program, which was implemented in a satisfactory manner, another three-year program (2020-22) is being negotiated to strengthen and consolidate the country’s macroeconomic framework.
Despite an external position in structural deficit, the current account deficit fell from 8.3% of GDP in 2018 to 5.2% in 2019, due to the resumption of domestic production and improvement of current transfers. The country shows an elevated risk of over-indebtedness, but the public debt ratio dropped from 48.5% of GDP in 2018 to 42.2% in 2019, reflecting the government’s prudent borrowing policy. About 58% of job seekers are between 20 and 29 years old. Social inequalities are very high, especially in rural areas affected by conflict. Women represent 53.7% of the labor force, their illiteracy rate is higher than men’s, and 80% of women ages 15-49 have not had access to education.
The economic prospects are promising. Real GDP growth is predicted to reach 4.8% in 2020 due to an improved security situation that should come in the wake of the peace and reconciliation agreement signed by the government and the rebel groups on 6 February 2019 in Bangui.
To reinvigorate agricultural and livestock farming, a project is under way to develop value chains and increase production in manioc, corn, rice, and livestock. To improve its integration in Central Africa and its subregional exports, the Central African Republic ratified the African Continental Free Trade Agreement. Implementing various structural projects as part of the national development plan should help meet the country’s many development challenges. The Bangui airport modernization project should encourage trade.
The Central African Republic, a transition country with a very long period of institutional and political instability, now faces an infrastructure deficit, youth unemployment, high social inequalities, and weak human capacities. The Human Development Index ranked it 188 of 189 countries (52 in Africa) in 2018.
Impeding the country’s desire and ability to address these challenges are a lack of funding, sociopolitical instability, and administrative weaknesses. The implementation of the peace agreement is lagging, and security tensions and the political polarization may undermine the sociopolitical environment in 2020-21. The ability to attract private investments continues to depend on a steady supply of electricity, greater economic and political stability, improved access to longterm financing for the private sector, and a healthier business environment.
Last updated: April 2020