CAR faces tough socioeconomic situation in governance reforms: IMF
Bangui, CAR (PANA) – Despite the particularly difficult socioeconomic context and significant financing needs, Central African Republic (CAR) continues to implement public finance management and governance reforms, according to International Monetary Fund (IMF) staff who visited Bangui from 10 to 17 July, 2024.
In the very short term, the main challenges concern the country's fuel supply and the control of budgetary risks, the IMF team reported.
The implementation of the reforms planned under the CAR programme supported by the Extended Credit Facility (ECF) remains the best path to macroeconomic stabilisation in the medium term, the team said after taking stock of the recent macroeconomic developments and the implementation of structural reforms.
Led by Mr. Albert Touna Mama, the team discussed with the CAR officials budget allocations for the upcoming revised 2024 finance law.
In a statement at the end of the discussions, Mr. Touna Mama remarked that the positive progress in domestic revenue mobilisation since the start of the ECF programme continued, reaching a record level of CFAF 80 billion during the first half of this year.
He said that the prospects for budget financing also continue to improve, aided by ongoing discussions with technical and financial partners, which could lead to new budget support programmes.
Likewise, fiscal reform has gained momentum, as illustrated by the strategic orientations resulting from the recent seminar on digital reforms organised by the Ministry of Finance and Budget.
“However, significant challenges continue to weigh on the economic outlook and public finances. A first major and recurring challenge concerns the fuel supply campaign via the Ubangi River which is still struggling to get started. A failure of this campaign, for the third consecutive year, would contribute to slowing down economic activity, hampering government revenues, and delaying macroeconomic stabilisation by at least two semesters given CAR’s import structure,” he pointed out.
“Another major challenge,” Mr. Touna Mama noted, “concerns the control of budgetary risks, in particular pertaining to weaknesses in budget planning and execution.” He said these risks have already led to significant overspending during the first half of this year. The upcoming revised budget will therefore be an opportunity to take all appropriate measures to adapt to the economic situation and maintain a balanced budget.
“Our macroeconomic projections remain anchored on a gradual acceleration of economic activity to 1.4% in 2024 and 2.9% in 2025. However, these growth prospects will depend crucially on the country's fuel supply and the effective implementation of the reforms planned under the ECF programme”. Mr. Touna Mama added.
-0- PANA AR/MA 25July2024
