Central African Republic designs fiscal instruments for sustainable forestry, economic growth
Bangui, CAR (PANA) - The Central African economy has remained stagnant, with GDP growth estimated to register 0.7% in 2024, before gradually rebounding to around 1.6% on average between 2025 and 2026, according to a new report from the World Bank.
It said this period of stagnation is due primarily to the repeated fuel shortages experienced since 2022 and to the severe power outages that have occurred in Bangui throughout at least the first half of 2024.
The 7th Edition of the Central African Republic Economic Update also indicates that inflation should be brought down to 1.5% in 2024 before closing in on the 3% threshold between 2025 and 2026.
Central African Republic continues to lag as one of the countries with the lowest human capital and development scores. Poverty remains high, with some 65.7% of the population estimated to be living in extreme poverty since 2023, that is, below the international poverty line of $2.15 per person per day (2017 PPP).
According to the report, the security situation continues to weigh on economic stability and undermine the outlook for short-term growth. Despite some slight improvements in this area, the country is still marked by sporadic outbreaks of violence and tension.
Authors of the report place special emphasis on the vital role that forests can play in the Central African economy as a source of livelihood for indigenous groups and as a provider of environmental services at the global level. They note, however, that within the Congo Basin, Central African forests are facing a number of serious threats from various forms of human activity.
“The Central African Republic has the opportunity to improve forest governance and develop a solid wood processing industry, while achieving the twin objectives of promoting forest conservation and ensuring a bigger stake for the forest sector in the country’s economy,” noted Guido Rurangwa, Country Manager for Central African Republic.
The report outlines a range of fiscal instruments that could be used to promote sustainable forest management in the country. These include environmental taxes, tradable permits, and biodiversity offsets.
In the face of these challenges, the report recommends combining fiscal instruments with better forest governance to bolster law enforcement and strengthen surveillance and transparency. The report also calls for:
Strengthened regional cooperation through harmonized regulations, more robust law enforcement, and a better alignment of the fiscal policies on forestry in the countries of the Congo Basin; attention to be paid also to promoting enhanced institutional capacity and encouraging increased international financing.
Guarantees of international support and greater compensation for the efforts being made by these countries: indeed, forest conservation is a global public good and is essential for regulating the climate and protecting biodiversity.
-0- PANA AR/MA 5Dec2024
