Skip to main content

Eritrea

Authors : Nyende Magidu, Frederick Mugisha

  • Real GDP growth slowed down to 3.8% in 2016 from 4.8% in 2015, reflecting challenges in the business and investment environment and capacity gaps in government institutions.
  • The government’s decision to access supplemental-support resources from the AfDB’s Transition Support Facility (TSF) to scale up investments in agriculture should strengthen resilience and improve livelihoods for the majority of the rural population.
  • Eritrea’s rich entrepreneurial tradition, despite constraints including the energysupply deficit, skills mismatch and poor telecommunication infrastructure, provides opportunities for private-sector growth and industrialisation.

Real gross domestic product (GDP) growth is projected to decline slightly from 4.8% in 2015 to 3.8% in 2016 reflecting weak capacity in government institutions and a weak export sector. Growth will reduce also in 2017 to 3.4%. Over the medium term, the government sees further prospects in improved trade with Middle-Eastern and Asian countries, additional mining activities, growth in food production and fisheries development. Eritrea remains a country of immense economic potential but economic and policy reforms are necessary for growth to rebound. The GDP is heavily based on services (59%), with a very small manufacturing sector (5.9%). Agriculture, hunting, forestry and fisheries constitute 17.2% of GDP.

The budget deficit declined slightly to 13.9% of GDP in 2015/16 from 14.2% in 2014/15. This trend will continue to 12.7% in 2016/17 because of access to more grants and concessional resources, increasing revenue from mining projects and control of unproductive expenditures. Inflation remained at 8.9% in 2016 mainly because of food-supply insufficiency and scarce foreign currency to finance imports of essential goods. Although no official statistics have been provided, food-crop production in 2016 would appear to be slightly above its 2015 level. Depressed commodity and oil prices in 2015 and 2016 should also contribute to keeping 2015/16 inflation at an annual average of 12%. In spite of adverse conditions, the authorities have endeavoured to protect the most vulnerable segments of the population and to implement their long-term development policies. They maintain an extensive social safety net, and are investing in three priority areas: i) food security and agricultural production; ii) infrastructure development; and iii) human-resources development.

The growth of exports in 2015/16 is expected to have been driven by the expansion of mineral production at the Asmara Mining project and gold extraction by the Zara Mining Share Company. The current account deficit is forecast to decline to 0.1% of GDP in 2016 from 2.2% of GDP in 2015 and will become a slight surplus in 2017 despite the slowdown in export growth, reduced remittances and a drop in revenue from the 2% tax, commonly referred to as “development and recovery tax”, levied on Eritreans in the diaspora. Supplemental-support resources under Pillar 1 of the AfDB’s Transitional Support Facility (TSF) will support increasing agricultural productivity and improving food security through implementation of the government’s minimum integrated agricultural programme designed to benefit the rural population and, especially, female-headed households. This programme will also generate socio-economic data on welfare levels of the population. The government has concluded a strategic partnership co-operation framework with the United Nations that will run from 2017 until 2021. The framework has four pillars: basic social services; resilience and disaster-risk management; public-sector capacity development; and food security and sustainable livelihoods. These interventions will strengthen resilience, improve the export base and strengthen food security.

In addition to its efforts to strengthen food security, the AfDB has provided resources to support the Ministry of Lands, Water and Environment through a ground-water assessment and mapping project. This project will lead to the design of others that will help mitigate the effects of climate change and promote resilience in the rural economy. The AfDB-funded Public Financial Management and Statistics Project is under implementation and will introduce efficiency and effectiveness into Treasury management and budgeting, while generating fiscal data vital for the overall planning and budgeting process. Technical support and training from the IMF is being co-ordinated with other stakeholders and delivered through a dedicated multi-year, fiscal and financial capacity-building programme. Support under this programme is expected to focus particularly on the macroeconomic framework, fiscal management, revenue administration, public financial management, monetary operations, risk-based banking supervision and macroeconomic statistics. The industrial sector in Eritrea is still small and entrepreneurship is stagnant because of lack of basic infrastructure and an unconducive business and investment environment. Going forward, the government should work to provide the necessary infrastructure and undertake major institutional reforms to attract foreign capital flows.

Eritrea

Equatorial Guinea

Authors : Dominique Puthod

  • Real GDP contracted by 8.2% in 2016 and is expected to shrink further by 5.9% in 2017. This recession is related to lower production in the oil and gas sectors.
  • Large hydrocarbon revenues made it possible in 2016 to continue major structural changes underway for over 20 years, both in infrastructure and human development.
  • One of the major challenges in stimulating entrepreneurship is the opening up of the market, in particular the improvement of the business climate and better regional integration.

In 2016, the economy of Equatorial Guinea was still dominated by the petroleum sector, which accounted for 85% of gross domestic product (GDP) and more than 94% of exports in 2015, according to the International Monetary Fund (IMF). Other relatively important sectors are construction (7% of GDP in 2015), agriculture, forestry and fisheries (2% of GDP), and trade (1.6%). Although these sectors are improving, relative to the petroleum sector, change has been very marginal since 2013. Economic diversification is slow to materialise but remains an important objective for economic growth and stability in the medium and long term. Over the past three years, the fall in oil prices has severely affected the development effort.

This fall in oil prices has immediate and lasting consequences for Equatorial Guinea’s budget, especially as it is accompanied by a decline in production, which only reached an estimated 155 000 barrels of oil equivalent per day in 2015, and amounted to a fall of 5% in volume per year over the last 10 years. This also affects the structure of the balance of payments, due to lower export earnings. The fall in government revenues has a direct impact on the rest of the economy, given the importance of public procurement in stimulating non-petroleum sectors. It should be noted that the capital expenditure reflected in the Finance Act 2015 (XAF 1 951 billion) corresponds to 85% of the forecast revenue. The 2016 Finance Act, against a background of recession, indicates that the authorities have chosen to maintain a high level of investment while maintaining a strategic balance.

The private sector in Equatorial Guinea is similar to that of many other developing countries, despite having its own local character. Large companies exploit raw materials and are almost exclusively foreign-owned, compared with small, local businesses that are disadvantaged by the poor business climate. Reforms have been started but progress is slow, and the establishment of a local class of entrepreneurs requires time and political commitment. This is the challenge to be faced in the coming decades. Equatorial Guinea has significant assets conducive to entrepreneurship and industrialisation. The country’s infrastructure is world-class, including roads, ports and energy. Another major advantage for the country’s development of entrepreneurship lies in the cultural diversity of its population and the return of a well-trained diaspora willing to invest in the country. This part of the population consists mainly of young people who speak several languages, valuable for the entrepreneurship and innovation needed to revive the economy.

Equatorial guinea

 

Egypt

Authors : Angus Downie

  • The economic outlook for 2017 remains cautiously optimistic largely based on the government’s ability to maintain the policy and structural reform agenda as well as successfully implement the sustainable development strategy.
  • Assuming economic policy and structural reform implementation, growth is expected to accelerate as confidence returns and investment increases, although some domestic issues and global economic headwinds will remain challenges.
  • Overall, Egypt can reverse the major and long-standing trend of low and non-inclusive growth along with weak employment prospects on the basis of the potential of the industrial and entrepreneurial sectors.

The formal “political roadmap” has been completed and attention is now focused on management of the reform programme and how this will support growth in 2017 and beyond. With foreign exchange now more readily available after the Central Bank of Egypt (CBE) liberalised the exchange rate in November 2016, the outlook for 2017 is more optimistic. Assuming reforms continue to be implemented, growth should pick up slightly because of positive developments in the gas, manufacturing and real estate sectors, alongside recovery in the tourism sector from recent security-related issues. However, managing to contain the large fiscal and current account deficits in an environment of high inflation will be a challenge in the remainder of 2017 and beyond.

Success in stabilising the economy and boosting growth will be demonstrated by lowering the fiscal deficit while: increasing pro-poor spending; managing price stability in a context of exchangerate flexibility; increasing employment; enhancing the business environment; strengthening security; and improving social justice. Fiscal consolidation efforts will be continued through the 2017/18 budget supported by expenditure enhancements contained in the Civil Service Law (approved in early October 2016), and revenue strengthening provided via the introduction of the VAT law in mid-2016. Other revenue- and expenditure-management tools will also be utilised, such as the August 2016 tax disputes resolution law, and there will be further efforts to reduce energy subsidies with savings directed towards social safety nets. A new investment law is under discussion in parliament, which should help strengthen the business environment, support the private sector and boost employment. With the exchange rate now liberalised, the CBE will be able to strike a better balance between curbing inflationary pressures and boosting growth without simultaneously having to focus on keeping the exchange rate steady.

The economy is relatively well diversified but despite large-scale industrialisation, investment has not delivered a vibrant economy with high employment. The reforms are designed to help improve productivity and efficiency in order to boost employment and move away from the “informality trap”. Yet increased industrialisation and entrepreneurship depends not only on a strong and supportive policy environment, but also on access to more natural resources, capital, improved technology and higher skilled labour.

egypt

Djibouti

Authors : Guy Blaise Nkamleu

  • Driven by large investment projects, growth remained buoyant at 6.3% in 2016 and is projected to rise to 6.7% in 2017 and 6.8% in 2018.
  • After widening for two consecutive years, the budget deficit improved in 2016, but debt remained critical, with an economy focused on services, transport in particular.
  • To reach its potential, the economy will require structural change to improve the low density of the country’s economic fabric and its low level of diversification.

The Republic of Djibouti has experienced continuous economic expansion that has kept growth above 5% for several years, thanks mainly to investment in railway, port (the multi-purpose Port of Doraleh and the Port of Tadjourah) and hydroelectric infrastructure. The government plans to continue its ambitious infrastructure programme on the back of foreign investments, particularly from China. Chinese firms are engaged in the launching of a large industrial and commercial customs-free zone, in exploiting natural resources (fish, salt and energy) and in developing tourism. These investments may change the structure of the economy, which so far has focused on transport and related services, taking advantage of the country’s geostrategic position by the Gulf of Aden at the intersection of key corridors for shipping goods and oil. The government wishes to bolster this comparative advantage over its neighbouring countries by turning the country into a regional platform and hub for logistic, trading and financial services.

Driven by these large investment projects, growth increased to an estimated 6.3% in 2016 from 6.5% in 2015, and is projected to move on to 6.7% in 2017 and 6.8% in 2018. Despite this upturn, extreme poverty and unemployment remain endemic. Around 23% of the 1 million people in Djibouti live in extreme poverty, and this poverty rate has not fallen since 2002, while more than 48% of the working-age population are unemployed. Moreover, debt is becoming increasingly critical. The many public investments in infrastructure are financed partly by large non-concessional loans. The debt level rose to an estimated 79.6% of gross domestic product (GDP) in 2016 and is projected to top 81.5% in 2017, putting the country at high risk of over-indebtedness.

In March 2014, to put structural change of the economy on track and foster entrepreneurship, the government adopted a long-term strategic framework, Vision Djibouti 2035. The first medium-term product of this framework was the Scape strategy (Stratégie de croissance accélérée et de promotion de l’emploi), a launched in 2015. In the long run, the strategic framework aims to move Djibouti to the status of an emerging country by 2035, and in the short run, the Scape strategy aims to accelerate growth and create jobs.

djibouti

 

Côte d’Ivoire

Authors : Pascal Yembiline, Idrissa Diagne, El Allassane Baguia

  • Economic growth remains strong but still relies on exporting raw materials, especially crops, which are subject to variations in global prices and climate risks.
  • Significant progress has been made in access to health care, education and social protection, but the past five years’ growth does not cover the strong social demand.
  • Major political reforms were undertaken in 2016 in a context still marked by a weak opposition and large protests.

In a context marked by a slowdown in agricultural output, the Ivoirian economy grew strongly for the fifth straight year at 8.4% in 2016 (African Development Bank estimate). Growth is projected to slow to 7.3% in 2017 as agricultural exports decline, even though domestic demand remains high, but the outlook remains good until 2020. The steady pace of growth in 2016 was supported by public and private investments, as well as by robust consumption. Although strong, economic growth still relies on exporting raw materials with little local processing of output. The economy thus remains vulnerable to external shocks, such as in 2016 when the global prices of the main export products (cocoa and oil) fell and agricultural output was affected by unfavourable climate conditions.

The government is implementing a new development plan (Plan national de développement 2016‑20 – PND), which emphasises diversifying production by capitalising on comparative advantages, especially the improved share of processed raw materials and the full value chains that have been developed in the agricultural sector. The cost of the PND is estimated at XOF 30 trillion (CFA Franc BCEAO), or USD 60 billion, 62% of which will be financed by private investments, mainly in the form of public-private partnerships, and 38% by national and international public resources. The 2016-20 PND has been strongly backed by Côte d’Ivoire’s development partners, which committed USD 15 billion in financial support at the May 2016 advisory group meeting in Paris.

An increase in expenditure in favour of the poor, though substantial, still does not meet the strong social demand for better living conditions for government officials. There have been continuous improvements to the business climate. The political context is marked by major reforms: a new constitution has been adopted, a vice-president has been appointed and a senate has been created. Elections have been held according to plan, with legislative elections, a new national assembly and a new government. The major challenges for the current five-year term will be: i) to pursue reconciliation efforts in the political community, where the opposition has been weakened by internal divisions; ii) to provide appropriate responses to strong and pressing social demands; iii) to step up efforts in the area of justice, which is still perceived as non-impartial by part of the population; and iv) to settle longstanding conflicts in the areas of nationality and land ownership. Reinforcing security also remains a challenge in a regional and national context marred by terrorist attacks due mainly to causes exogenous to the country.

Cote D'Ivoire

Congo

Authors : Nouridine Kane Dia, Francis Jony Andrianarison

  • The economy shrank by 2.4% in 2016 (after expanding by 2.6% the previous year), amid difficult conditions worldwide, in particular a sharp drop in oil prices, and is expected to grow by 0.5% in 2017.
  • The proportion of the population living in poverty fell from 50.2% to 37% between 2005 and 2011, but social indicators remain mixed, and some are incompatible with Congo’s status as a middle-income country (MIC).
  • Despite its major potential, industry has not developed to become the engine to drive the economy and structural transformation.

Lower world oil prices continued seriously to affect the economy in 2016, which shrank by 2.4% in 2016 (after growing by 2.6% in 2015). The fall in the oil price reduced oil sector activity and growth slowed in the non-oil sector, which was itself hit by a decline in public investment. The great dependence on oil underlines the efforts needed to diversify the economy and make it more resilient. Inflation was 4.3% in 2016 and is expected in 2017 and 2018 to remain slightly above the 3% convergence criterion set by the Central African Economic and Monetary Community (CEMAC) for 2017-18. The sharp fall in oil sector revenues produced an overall budget deficit of 15.9% of gross domestic product (GDP) in 2016, despite budget cutbacks, as well as a bigger current account deficit, which grew from 20% to 24.2% of GDP between 2015 and 2016.

The economy should expand by 0.5% in 2017 and then 3.3% in 2018, thanks to a greater output of oil as new wells come on stream, and to better agricultural and cement output. But oil price uncertainty, the government’s narrower margin of manoeuvre in supporting growth, as well as less macroeconomic stability, are major risks. Prospects will also depend on the ability to make orderly and sufficient adjustments to emerge from the crisis, along with speeding up structural reforms to diversify the economy.

Though progress has been made, social indicators are still lower than in other African countries of a similar income level. The United Nations Development Programme (UNDP) Human Development Index ranked Congo 136th out of 188 countries in 2016 with a score of 0.591, slightly better than in 2015. Poverty fell from 50.2% of the population in 2005 to 37% in 2011 but is still higher than the average in similar middle-income countries (MIC). With a Gini inequality coefficient of 0.465, it comes 90th out of 105 countries worldwide, so income inequality and distribution remain big challenges. Unemployment is a major challenge, with 30% of the workforce between 15 and 29 and 19% of women having no job.

Industrialisation has not yet made significant progress in spite of the efforts made over the past decade. The fall in the price of oil reduced its contribution to GDP but it remains the driver of the economy (40% of GDP), with the secondary sector accounting for only 7%. Industry is very undiversified and its exports are composed of only three kinds of products, which made up only 6.5% of total exports in 2016. To boost the growth of industry and entrepreneurship, the government has an ambitious diversification and industrialisation strategy, the 2012-16 national development programme (PND) and the national industrialisation policy paper. The PND includes measures that aim to create good conditions for entrepreneurs and private investment. But results are still poor, and the government must speed up the building of a diversified and more resilient economy.

Congo

Congo, Democratic Republic

Authors : Jean Marie Vianney Dabire, Ernest Bamou, Jean Amisi Mutumbi Kalongania

  • The growth rate of the Congolese economy fell from 6.9% in 2015 to 2.5% in 2016, but could rebound to 4.0% in 2017 and 5.2% in 2018, given the expected rise in prices of the country’s raw materials.
  • The DRC made some progress in terms of human development in 2016, but that progress remains fragile.
  • Significant efforts will be required to operationalise the country’s strategic frameworks for entrepreneurship and industrialisation.

The Congolese economy was harmed in 2016 by the decline in world prices of its main exports and by a volatile political and security climate. Growth, propelled by the manufacturing industries, trade, agriculture and transport and telecommunications, fell from 6.9% in 2015 to 2.5% in 2016. The economic slowdown and the drop in exports reduced the country’s fiscal leeway in a context of rigidity of expenditure. Foreign exchange reserves fell, leading to a one-year depreciation of the Congolese franc (CDF) by 26% and a worrying rise in inflation, which reached 11.24% at the end of 2016. If the recent upswing in the price of copper continues, economic growth could reach 4.0% in 2017 and 5.2% in 2018. To consolidate these figures, a stable political and security climate is essential, along with a firm commitment from the authorities to implement measures adopted in January 2016 for economic stabilisation and stimulus, in particular those aimed at increasing domestic revenue and economic diversification.

The Democratic Republic of Congo (DRC) did make some progress in the field of human development in 2016 despite the fragile politico-security context. The government adopted new sectoral programmes for health and education in connection with its National Strategic Development Plan (PNSD), which is currently being adopted. Following the gradual extension of free primary education and the development of the school-building programme, school enrolment, literacy and completion rates rose slightly in 2016, although the quality of teaching is not yet satisfactory. The public health situation, however, did not improve in 2016. The progress made, while insufficient, did allow the DRC to improve its Human Development Index (HDI) ranking which, according to raw data from the Core Welfare Indicators Questionnaire survey (CWIQ), should rise from 0.443 in 2014 to 0.464 in 2016, an improvement of 4.7% in two years. The social situation could worsen in 2017 if there is significant deterioration of the country’s economic and financial situation, in a context where elections are at the forefront of the agenda.

There is a real political will to promote entrepreneurship and industrialisation in the DRC, which has adopted a national development strategy for small and medium-sized enterprises (SMEs), an industrial policies and strategies paper and a national incubator programme to help generate jobs through the training and mentoring of small and medium-sized private operators. Nevertheless, the implementation of these strategies and programmes remains limited, notably due to a lack of financial resources. Additional efforts are needed to: i) strengthen entrepreneurship through education and skills development; ii) facilitate exchanges of technology and innovation; iii) improve access to finance for entrepreneurs; iv) improve the regulatory climate for entrepreneurship; v) establish links between national SMEs and foreign companies; and vi) strengthen the public-private dialogue.

Congo rep. dem.

Comoros

Authors : Issa Attoumane Boina, Alassane Diabate, El Hadji Ndji Mamadou Fall

  • Economic growth was 2.1% in 2016 due to the ongoing electricity crisis, but thanks to the new government’s efforts to resolve and clean up public finances, growth is projected to reach 3.4% in 2017 and 4.1% in 2018.
  • The 2016 elections led to political change: the new President of the Union and the three island governors were all elected from the opposition.
  • With a narrow economic base and a predominantly informal economy, the islands remain under-industrialised (10% of GDP), and the country is looking to adopt a regional strategy to address this issue.

Growth recovered slightly in 2016, at 2.1% (up from 1.0% in 2015), but was below the rate of population growth (2.4%). It is projected to rise to 3.4% in 2017 and 4.1% in 2018 thanks to efforts by the new government to sort out the electricity crisis and improve public finance management. The country made the electricity sector a priority in June 2016, improving the production capacity of the national water and electricity company MAMWE. The industrial sector is the main driver of growth, followed by services and agriculture. The most dynamic sub-sectors include fisheries, energy, information and communication technologies, and other services. The economic outlook is promising for 2017 and 2018 for two reasons. First, a second telephone company (Telma) began operating in December 2016 and, most importantly, the government officially opened a new power station in February 2017 to deal with the electricity crisis once and for all.

Since taking office in June 2016, the new government has also shown that it is determined to clean up public finances. It has taken strict measures to reduce the size of the civil service and improve domestic tax collection to finance its public investment policy. The 2017 Finance Act seeks to double the tax burden from 11.1% to 22.1%. Investment spending for 2017 is projected at 33.0% of GDP, up from 14.6% two years earlier. Budgetary difficulties in recent years caused the Public Investment Programme to contract from 26% to 14.6% of GDP between 2012 and 2015.

The industrial sector is still at the embryonic stage, contributing less than 10% to GDP. In 2013, the authorities launched a strategy to improve the business environment by strengthening the rights and remedies of investors and creditors, creating structured public-private dialogue and training entrepreneurs in management software by Business Edge. Despite these efforts, investment is low and viable entrepreneurial initiatives are rare, indicating that many other obstacles remain, especially at the institutional level. Other hurdles include the high cost of production factors, difficult market access, weak economic governance and the state’s role in economic activity.

Aware that the private sector can create jobs and make growth more inclusive, the government is continuing its efforts in to improve the business environment in order to encourage structural transformation and diversification of the economy.

comoros

 

Chad

Authors : Claude N'Kodia, Daniel Gbetnkom

  • The costs involved in combatting jihadi movements and the continuing low world price of oil mean that economic growth, which was already negative in 2016, will again be so in 2017.
  • The economic, financial and security environments are particularly difficult, and the extension of structural reforms seems essential if macroeconomic stability is to be maintained in 2017.
  • Encouraging an entrepreneurial economy could contribute to greater economic resilience because of the greater diversity of sources of growth, income and jobs that it might generate.

Chad’s economy depends heavily on oil and continues to be hit by the worldwide drop in its price and the security risks to production resulting from the activities of jihadist movements and the Boko Haram sect. These continuing sources of instability have further weakened the country’s budgetary situation, its external position and short-term growth prospects. The financial costs of its military commitment and care of refugees continue to weigh upon the public purse. The lessening of activity recorded in 2016 could therefore continue in 2017, in particular because of a marked drop in activity in both the oil and non-oil sectors.

Although the economic and financial context is anything but favourable, implementation of the programme supported by the Extended Credit Facility (ECF) has made satisfactory progress. Approval of the conclusions of the Third and Fourth Reviews of the programme enabled the country to benefit from financial help in November 2016. This budgetary assistance supplements help provided the same year by the African Development Bank, the European Union, France and the World Bank. Confronted by the drastic fall in state revenues and the resulting financial crisis, the government also adopted a set of measures to strengthen fiscal consolidation and streamlining, in particular through an ongoing effort in the collection of non-oil receipts and their greater safeguarding. Trade unions are however maintaining their opposition to this governmental emergency plan and condemn the negative effects on people’s well-being. In this uncertain economic and financial climate, prudent management of the debt appears essential to keeping it viable in the light of present acute volatility of the price of oil.

Chad depends heavily on the exploitation of limited natural resources and has to look to diversify its sources of growth and income. It envisages implementing three successive national development plans, which will allow it to fall under the “emerging” category by 2030. Accordingly, industrialisation is essential to this strategy, which will enable moving progressively into sectoral transformation and diversification. At the same time it will promote social integration and greater capital accumulation thanks to the development of an entrepreneurial culture, in particular amongst women and young people. For this strategy to succeed the country will need to have considerable financial resources available, though these will be hard to assemble under present conditions.

chad

Central African Republic

Authors : Kalidou Diallo, David Tchuinou

  • Despite a downward revision, real GDP in 2016 was estimated to have increased by 5.1%, buoyed by recovery in extractive industries.
  • The country is experiencing a degree of macroeconomic stability and taking measures to implement structural reforms, but the authorities still do not have control of the entire territory and people still fall victim to violence.
  • Due to recurring political crises, the development of entrepreneurship, industry and the private sector is extremely risky and unattractive, even for Central Africans.

The tentative economic recovery that began in 2014 is strengthening gradually, with a real GDP growth rate that should reach 5.1 % in 2016. This improvement is rooted in the recovery of the extractive sector, which surged by 22.8% after the partial suspension of the Kimberley process was lifted. Inflationary pressures, which were strong during the crisis, should lessen in 2017 and 2018 due to the recovery of transport in the Douala-Bangui corridor, and notably thanks to improved food supply.

The country is still facing violence among the former factions of the Seleka, notably over control of mining zones. Roadblockers and other armed individuals also set up illegal barriers to collect taxes from merchants or steal farmers’ livestock. Non-governmental organisations are not spared, even though they are aiding the population. The situation can only be calmed once appropriate policies are in place, along with the programme for the disarmament, demobilisation and reintegration (DDR) of former fighters. The Central African Republic (CAR) has nonetheless maintained a degree of macroeconomic stability and made progress in implementing structural reforms. With the support of development partners, it has produced a national plan for recovery and peace-building – plan national de relèvement et de consolidation de la paix – with a budget of USD 3.16 billion, which it presented to the international community on 17 November 2016 in Brussels. It made its case successfully and received resource commitments, essentially from its traditional funders.

The recurring crises in CAR are preventing development of the private sector and undermining the foundations of the country’s industrialisation and development. They have created such a high-risk environment that even citizens are refraining from investing. This negative context has tended to encourage the expansion of “destructive” entrepreneurial activities against a backdrop of trafficking and fraud, notably in natural resource sectors like mining and forestry. Beyond the prospect of its businesses disappearing, the CAR faces deindustrialisation and the impoverishment of its population. The process can be reversed only through a return to sustainable security and the implementation of appropriate reforms.

CAR

 

Subscribe to
Press release

Unlock the potential of African entrepreneurs for accelerating Africa’s industrial transformation, says the African Economic Outlook 2017

About

AfricanEconomicOutlook.org  offers comprehensive and comparable data and analysis of 54 African economies.