Central African Republic
Recent Developments & Prospects
Economic Cooperation, Regional Integration & Trade
Economic & Political Governance
Public Sector Management, Institutions & Reform
Natural Resource Management & Environment
Thematic analysis: Structural transformation and natural resources
Author: Kalidou Diallo
- The timid economic recovery in 2014 should continue in 2015 and 2016 thanks to an improvement in security and the holding of presidential and parliamentary elections in 2015.
- The mobilisation of the international community that followed the election of Catherine Samba-Panza as interim head of state in January 2014 resulted in the deployment of United Nations security forces and the resumption of external financial support.
- Despite relative improvement in Bangui and elsewhere, social and humanitarian conditions remain affected by persistent insecurity and the large numbers of displaced people.
After the fall in production recorded in 2013, economic activity in the Central African Republic (CAR) picked up slightly in 2014. The agricultural sector, which is the chief contributor to gross domestic product (GDP), nonetheless continues to lose ground, in particular because of the lingering insecurity and the slow return of displaced persons. The progressive return to a degree of security of the main road corridor from Bangui to Douala, which carries most of the country’s external trade, has facilitated commercial and transport activities. Economic growth should strengthen in 2015 and 2016 because of the improved security situation and the holding of presidential and legislative elections.
The installation of new transitional authorities – particularly the election of Catherine Samba-Panza as head of state – the appointment of a new prime minister and the formation of a government characterised 2014 from January onwards. These developments were favourably received and strengthened the mobilisation of the international community to stabilise the country and lend backing to the continuing transition process. Notwithstanding these positive developments, the degree of insecurity remains worrying, while social and humanitarian conditions are still difficult. The latest estimates by the United Nations suggest that more than 28% of the population are affected by food insecurity and 33% require humanitarian assistance.
Although a government commanding wider support was formed in August 2014, with a prime minister from the Muslim community, a large number of communal and political tensions persist. A new electoral calendar for presidential and legislative elections was, accordingly, drawn up for June and July 2015. The resumption of external financial support, especially in the form of budgetary aid, enabled the transition authorities to ensure payment of wages and salaries. After a period marked by systematic recourse to exceptional measures in the execution of public spending and by disorder in the financial administration, a progressive normalisation of the management of public finances is underway.
The CAR is landlocked and has one of Africa’s least dense populations. These difficult factors apart, the country also has to face up to a lack of infrastructure that creates spatial and geographical exclusion among the population and worsens poverty in the countryside. In an attempt to remedy this state of affairs the country has adopted a “growth pole” (Pôle de développement, or PDD) strategy which takes into account the demographic, economic and security characteristics of the country’s different regions.
Table 1: Macroeconomic indicators
|Real GDP growth||-36||1||5.4||4|
|Real GDP per capita growth||-38||-1||3.4||2.1|
|Budget balance % GDP||-6.3||-3.2||-3.8||-3.7|
|Current account balance % GDP||-3||-5.2||-8.2||-6.4|
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.