Washington, DC — A mission from the International Monetary Fund (IMF) led by Mr. Norbert Toé visited Bangui, Central African Republic (CAR), during October 24 to November 8, 2012 to conduct the first review of the three-year program supported under the Extended Credit Facility (ECF).
The mission assessed progress achieved under the program as at June 30, 2012, updated program objectives for remainder of 2012 and discussed the government's economic and financial policy objectives for 2013.
The mission met with the President of the Republic, H.E. François Bozizé Yangouvonda; the President of the National Assembly, Right Honorable Célestin Leroy Gaombalet; the Prime Minister, H.E. Faustin-Archange Touadéra; the Minister of State for Planning and Economy, Mr. Abdou Karim Meckassoua; the Minister of Finance and Budget, Mr. Albert Besse; the Minister of Trade and Industry, Mrs. Marlyn Mouliom Roosalem; the Minister Delegate for Mining, Mr. Obed Namsio; the National Director of the Bank of Central African States (BEAC) for CAR, Mr. Camille Kéléfio; and other senior government and BEAC officials as well as representatives of civil society organizations, labor unions, the private sector, and the international community in Bangui.
At the end of the mission, Mr. Toé issued the following statement:
"The uptick in economic activity observed during the April 2012 mission to the country continued as the political and security situation in the country gradually improved. Gross domestic product (GDP) growth is projected at 4.1 percent in 2012 and 4.3 percent in 2013, driven by a sharp rise in cotton production and an acceleration of the tertiary sector, which offset the slowdown in manufacturing activity.
Inflationary pressures caused by supply disruptions at the beginning of the year tapered off in the second half of 2012, helping to bring inflation back to a more normal level, while remaining higher than the 3 percent convergence criterion of the Economic and Monetary Community of Central Africa (CEMAC). Although exports increased sharply in volume, the trade deficit widened due to a sharp fall in cotton export prices, while oil and food import prices continued to rise. However, the current account deficit fell by 1Â½ percentage points to 6.2 percent of GDP, thanks to an increase in net official current transfers.
"As at June 30, 2012, key program objectives have been met thanks to efforts made towards improving public financial management, particularly in revenue mobilization. The mission also noted a recent improvement in the tracking of treasury operations, thanks to more effective use of the IT system GESCO.
Conversely, the mission noted persistent weaknesses in expenditure controls with continued recourse to exceptional payments procedures, even though such payments have been reduced compared to the past. The mission also noted non-compliance with budgetary priorities, in particular with regard to some poverty reduction expenditures; also reduction of domestic payments arrears exceeded the ceiling agreed under the program.
"In light of these developments, discussions between the authorities and the mission focused on measures required to strengthen public financial management, particularly enforcing compliance with proper expenditure execution procedures, and ensuring transparency in government financial operations. The government also committed to speeding up the implementation of structural reforms to improve the business environment and strengthen the banking sector.
"Discussions also focused on the main objectives of the 2013 budget, currently under discussion at the National Assembly, and on the Government's draft Memorandum of Economic and Financial Policies, on which the second year of the three-year program is based.
"The mission wishes to thank the Central African Republic authorities for their hospitality and constructive discussions."