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Overview

Recent Developments & Prospects

Macroeconomic Policy

Fiscal Policy

Monetary Policy

Economic Cooperation, Regional Integration & Trade

Debt Policy

Economic & Political Governance

Private Sector

Financial Sector

Public Sector Management, Institutions & Reform

Natural Resource Management & Environment

Political Context

Social Context & Human Development

Building Human Resources

Poverty Reduction, Social Protection & Labour

Gender Equality

Thematic analysis: Structural transformation and natural resources

Author: Kalidou Diallo

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  • A rebel uprising led to the overthrow in March 2013 of Central African Republic’s president and conflict in which thousands have died.
  • Despite an international military operation, there is a huge humanitarian crisis, state institutions have collapsed and the economy has come to a standstill.
  • The transitional government has virtually no revenue sources and the country faces an uncertain future.

Armed groups overthrew President Francois Bozizé, who had been in power since 2003, on 24 March 2013, plunging Central African Republic into the most serious crisis in its history. The rebellion by the groups known as Seleka, meaning “alliance” in the Sango language, has been condemned by the international community and the conflict has caused a massive human tragedy. Under an accord brokered by the Economic Community of Central African States (ECCAS) a transitional executive has been in place since April 2013 aiming to bring the country through the crisis. Michel Djotodia, a leader of the rebellion who named himself president, at first declared a three-year transition period, but under the accord agreed to hold elections within 18 months. He named Nicolas Tiangaye, from the traditional opposition, as prime minister, but the two could not stabilise the country.

“Anti-Balaka” self-defence militias were set up to counter Seleka attacks and large-scale intercommunal violence erupted. From 1 August 2013 the African Union began deploying forces as part of the international support mission, MISCA (Mission internationale de soutien à la Centrafrique) that would eventually number 3 500 soldiers but to little effect. Operation Sangaris, a French military intervention comprised of 1 600 troops operating under a UN mandate, followed on 5 December 2013. Every state and public institution has been affected by the crisis and the State has effectively collapsed.

An escalation of the violence at the start of December 2013 worsened the humanitarian situation. The following month, the United Nations (UN) reported that the crisis had displaced more than 800 000 people, with more than 500 000 in the capital Bangui. More than half the population of 4.6 million people were in need of urgent assistance and 245 000 had fled to neighbouring countries. Public finances collapsed with the public management system and financial bodies in disarray. Public revenues fell by more than 50% and the authorities had to make use of systematic off-budget operations.

Despite the resignation of Djotodia and Tiangaye on 10 January 2014 and the installation of new transitional authorities, who have international support, the economic outlook for 2014 is bleak. Insecurity persists and the heavy economic and financial damage will be difficult to repair in the short term. The challenge for 2014 and 2015 will be to restore security, facilitate access to humanitarian assistance and organise elections. The crisis has jeopardised all prospect of economic development, economic structural transformation or sustainable development. Even before the crisis, however, Central African Republic had not succeeded in transforming its economy or promoting activities to get into regional or global value chains.

Table 1: Macroeconomic indicators

 20122013(e)2014(p)2015(p)
Real GDP growth4.1-34.21.55.7
Real GDP per capita growth2.1-36.2-0.53.7
CPI inflation5.96.55.82.9
Budget balance % GDP0-5.7-8.2-5.3
Current account balance % GDP-5.6-9.4-13.1-9.1

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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