- The IMF Executive Board today completed the third and fourth reviews under the Extended Credit Facility Arrangement for the Central African Republic (CAR). The completion of the third and fourth reviews allows for an immediate disbursement of SDR 43.22 million (about US$58 million) to CAR to address protracted balance of payment needs and sustaining priority spending on basic public services.
- Economic growth is expected to accelerate to 3 percent in 2025, up from 1.9 percent in 2024, while inflation is projected to decline gradually. The outlook depends on faster fuel market and governance reforms, and increased grant and concessional financing.
- Program performance was mixed, while downside risks remain substantial.
Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed today the third and fourth reviews of the Extended Credit Facility (ECF) arrangement for the Central African Republic (CAR). The ECF arrangement, with access of SDR 147.48 million (about US$197 million), was approved by the IMF Executive Board in April 2023 (see Press Release No. 23/129 ). The completion of these reviews allows for the immediate disbursement of SDR 43.22 million (about US$58 million) bringing total disbursements under the ECF arrangement to SDR 92.29 million (around US$124 million).
In completing the reviews, the Executive Board also approved the authorities' request for waivers of nonobservance of the performance criteria (PC) for the end-June 2024 and end-December 2024 domestic primary fiscal balance and net domestic financing. The Executive Board also approved the authorities' request for a waiver of nonobservance of the continuous PC on non-accumulation of new external arrears. Further, the Executive Board completed the financing assurances review under the ECF arrangement.
The ECF arrangement is part of coordinated efforts by international financial institutions to support the people of CAR. It will continue to help the country meet the protracted balance of payments needs and sustain spending on basic public services, including in the health and education sectors. Program implementation has helped anchor structural reforms and financing. Fuel supply and revenue have improved. Progress is being made in digitalizing the revenue administration and PFM systems, along with enhancements to the Financial Intelligence Unit and the Court of Audit. Completing the combined reviews creates new opportunities for positive outcomes.
Economic activity is projected to expand by 3 percent in 2025, up from 1.9 percent in 2024, driven by higher energy use, mining recovery, infrastructure projects, and improved security. Inflation would ease by end-2025, in part helped by the cut in pump prices in May 2025. Still, a tighter fiscal stance is needed to arrest rising debt vulnerabilities. The domestic primary deficit would narrow to 2.1 percent of GDP in 2025 from 4.9 percent in 2024, assuming bold political backing for the agreed measures on tax administration and compliance. Reinforced spending controls are also key ahead of elections and cuts in humanitarian aid.
The overhaul of the fuel market remains pivotal for macroeconomic stabilization and both sustained and inclusive growth in CAR. The fuel procurement audit should be accelerated to underpin price reforms and address persistent inefficiencies. Despite recent supply increases and price cuts, pump prices remain high due to costly and opaque imports. Transparent use of the recent diesel grant and a thorough audit of costs and margins could help enhance competition, improve supply efficiency, and boost fiscal revenue.
Following the Executive Board's discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement:
"The Central African Republic (CAR) has shown renewed commitment to structural reforms under the ECF-arrangement despite facing deep-rooted fragility and significant uncertainty. Both financial and technical support from development partners remain vital to the program's success, to overcome weak capacity, elevated revenue volatility, and to alleviate humanitarian needs.
"Program performance for the combined third and fourth reviews was mixed, which is being addressed with strong corrective actions. Half of the six PCs for end-June and end-December 2024 were met. Still, the domestic primary deficit and net domestic financing targets were missed by wide margins, as was the continuous PC on non-accumulation of external arrears. The indicative targets for social spending and expenditures via extraordinary procedures were also missed.
"Strengthening tax compliance and controls is key to boosting revenue but requires strong political support. Accelerating the fuel procurement audit is also essential to address inefficiencies and enable further reductions in pump prices. A well-functioning fuel market is vital for fiscal and macroeconomic stability.
"Program performance depends on stronger public financial management (PFM), particularly spending controls ahead of the elections. Improved PFM is essential to prevent arrears, limit extraordinary procedures, and ensure effective social spending. It would also help mobilize grants and concessional financing, reduce costly regional borrowing, and safeguard debt sustainability.
"Enhancing governance will reinforce PFM efforts. Progress in strengthening the Financial Intelligence Unit and the Court of Audit is welcome. Adopting the new forestry code and implementing the mining code are key to unlocking CAR's growth potential. Prompt operationalization of the asset declaration system is also critical to maintaining donor support.
"Policies to enhance growth potential and improve equality should be anchored on the National Development Plan (NDP) (2024-2028). A steadfast execution of the NDP is also crucial to catalyze donor support and start attracting foreign private investment flows.
CAR's economic program will remain supported by the implementation of policies and reforms agreed among CEMAC regional institutions, which notably aim at supporting an increase in regional net foreign assets which are ultimately critical to program's success."
