Constraints and potentials of Central African Republic (CAR)' economy, upto the XXI century


The CAR has strong structural macro and micro-economic constraints, as well as of strong potentials and it is advisable to succinctly present their principle characteristics, for clearer underlining of the large axes and vectors of solutions for a durable economic growth.

I. Structural constraints

The CAR, being classified as a less advanced country with an annual GDP per head of 306 dollars, has been since 1985 the subject of serious financial and economic crisis. The first indicators to its have been the decline of the GDP and an major budget deficit which have resulted in a poverty stricken population, the deterioration of its basis infrastructures, i.e. its sanitary and education systems.

Its other characteristics showing the disadvantages can be underlined by a series of examples.

As an enclosed country, the minimum distance to the nearest port (Douala - Cameroon) is 1500 Km => high transport cost which results in a decline of the CAR competitiveness in exports ; a rise in import costs => dependence upon its neighbours for access to the sea and their political and economic vicissitudes.
The vastness of the territory, the low population level and its disproportionate spread renders :

- on the one hand, difficulties in frontier control [concentrated in West, Center and the South, the North and the Eastern regions often fall victim to Sudanese and Chadian rebels and road cutters of various origin called " Zaraguina " or to poachers. => Insecurity Climates];

- on the other hand, the tiny CAR market and its narrow productive basis (the primary sector represents 51% the GDP, the tertiary sector 32% and the mining sector 17%), characterized by an exploitation mode less effective.

In general, the country doesn't have enough structure to transact business and some zones in the East and the North-east are feebly monetized, due to the lack of basic infrastructures and transportation dependent trades.
All socio-economic levels, human resources are insufficient qualitatively and quantitatively, and private initiative is limited.
As for Administration, during several years, the Public Treasury has been managed to view with limited accurate acounting. CAR state has lost its credibility. Finally the debt and budgetary deficit have reduced the capacity for public investment.
Thus, CAR has pased from 5,5% in 1994 to a growth of -2% in 1996 (in real terms), which has led to some international observers (notably the economic review " Le Moniteur du commerce international " (MOCI) in France ) that the CAR has obtained the " blue ribbon " (good appreciation) of growth. However, if we observe the content of this growth, besides the increase in raw materials being doped by the CFA (currency unit of some African countries speaking French) devaluation of 1994, there has been an increase of 20% of the volume of products in the sector of gaseous drinks and beer. Similarly, there has been an increase of exports of mining sectors, cotton, the cafe, from woods and farm products.
The CAR food production became statistically self-sufficient in 1985, even if since the rural exodus does not slow, in reality due to the fact that, the lack of coherent distribution policy and supply in local products of deficient regions by excess provinces. The fact that CAR is internally enclosed (it is not only external), forbidden to peasants to hope for the regular sale of their surpluses. The first reason is existing roads are increasingly delapidated, despite of public work department's efforts, which is inefficiently organized with very few means [by 1990, CFA 17 billion were allocated by international association of development for the repairing of 4 000 Km of roads, 720 Km of tracks and aerial and fluvial infrastructures, a part of this assistance has gone to Ngbare Kangué (native village of the state chief )].

All elements previously quoted, show although during a very favorable period for CAR economy, it still remains :

1/ dependent to clean cyclic movements to markets of basis products;

2/ dependent of external aid: for example, foreign investments represent 3/5 investments and 2/3 of foreign investments from France. These concentrate in 38% of companies in the modern sector, in which leaves the average invested capital is about 70%, concentrated in sectors from woods, edible products (drinks, tobaccos), cotton, consumption, as well as of fuels.

3/ and chronically inferior public receipts to expenses (cf. table below) with an informal sector (the phenomenon of informal economy called " Bouba-Nguéré ") that develops and that "kills" centrafrican economy (by causing notably consequent currency exits), conjugated to high level of "special funds" (for the presidency) (about one billion).

Financial situations of CAR (in billion of CFA Franc)








Total receipts







Fiscal receipts







whose rights on external trade







Other receipts







Total expenses







Usual expenses...







...whose salaries and processing







Payments of loan...







...whose exteriors,







...and interiors







Public investment program...







...whose budget







External financing







Global deficit, commitment basis...







...whose balances primary **







Sources : data provided by CAR authorities, estimations and projections of the IMF, and economic review " Marchés Tropicaux ", Paris, 2 January 1998, page 25.

* Projections.

** exclusive of loan payments and investment expenses financed of external aid..

To face all these structural imbalances and to clean up public finances, to release savings to financial investments, several Structural adjustment programs (SAP) have been put in place by the IMF and the BM. This was a failure:

in 1986, with the competition within the Bretton-Woods institutions (the IFM and the World Bank) and others, the structural adjustment plan number I has been put in place, until September 1988;
in June 1988, the installation of the agricultural SAP II, otherwise called PASA, until 30 June 1989;
the SAP III was taken from August 1989 until December 1991; the target was the pursuit of financial adjustment, the economic revival by means of traditional exports (cotton, coffee) and the agricultural product diversification, as well as the completion of the public sectors' reform and the restructuring of the quasi-public sector.

In reality, a large part of reforms have not been applied, what has blocked the functioning of agreements, especially the payment of the second stage of the PAS III. In 1993, the main sponsors ceased to support the CAR.

In 1994, with a new government constituted after democratic elections, undertook a new direction in May 1994 with the help of the UNDP, for a program called " restart ". Three priorities were defined:

1/ financial and economic management,

2/ general states of education (knowing that 30% teachers have been dismissed in the 1980's, in a country that has approximately 60% of people unable to read and write),

3/ and the health;

difficulties to applicate this adjustment were entailed in 1995, the negotiation of the SAP IV conditioned by the improvement of budgetary procedures, extension of the number of persons who would be effected by the fiscality, the reform of the public service and the quasi-public sector. There again, it has resulted in several mutinies since 1996 in a country, with economic subsidence; as well as the unsuccessful of the different negotiations with sponsorers becoming increasingly incredulous.
Currently, in a context of return to the peace thanks to an African mediation (help by UN), there still remains a difficult economic viewpoint (delays of salaries of more of 6 month,...), an IMF' mission driven by Klaus-Walter Riechel (Chief of mission), Richard Randriamaholy and Abdelrahim Bessala, conducted within the framework of a permanent technical committee, which has been in Bangui from 18 to 27 October 1997, helping CAR authorities to clean up public finances and balance the deferred accumulated sponsorers. The stemming report of this mission, has underlined with precise deadlines (not exceeding six month) a certain number of measures to take, prior to any other agreement with the IMF. It would be too long to give the full content of this report. We hope this meeting is going to bring to an end the logic of unsuccessful endemic of the SAP in CAR.

Nevertheless, whatever the results of the discussions with the IMF, besides the reduction of the degree of quoted structural constraints, economic orientations would have :

-1- to take account of a certain number potentials and,

-2- to strengthen organizational capacities within human resources of the country, notably by making recourse to administration's external competence.



II potentials

If CAR agriculture was developed, the country would be rich; because the agricultural sector occupies more than 65% of the active population, and (in 1989) represented 41% of the GNP. CAR shares with Zaire the disappointing record of lowest output in the continent. It is necessary to know that:
37% of sown areas receive neither fertilizer, nor insecticides;
CARs' products of basis are dependent courses of raw materials and the weak quotas that are attributed it, conjugated to a period (maybe bygone ) where the wrong management of the CAISTAB (structure of coffees' prices stabilization) (CFA 360 millions non devaluated departed in the nature in 1989, without anyone being and/or responsible) have finished by destabilizing one of the most productive sectors of the country; the tobacco has practically disappeared: 285 tons in 1988 against near 3 000 tons in the beginning of years 1970; woods of the CAR has near 250 gasoline is the second production of the primary sector. These activities have four time more potentials by decade (suitable estimation make from a model of growth taking account transactional dynamics of the economy).
The CAR basement is also a real scandal: diamond, gold, copper, tin, limestone, uranium,...
the diamond brings on the average CFA 45 billions F (devaluated) for a production of 500000 carats, while Anvers' diamond sailors (in Belgium) that import almost the totality of the CARs' diamond, buy two-fold. In fact, governments have always pulled profit the illicit stone trade, notably the large concession of Mingala and Dimbi and companies recently created with external supports. The redeployment of entailed public forces are well paid in diamond regions and a serious reform of the sector would allow to stop this hemostasis.
The deposit of Bakouma's uranium is estimated at 700 000 tons. An Centrafrican uranium's company (URCA) has been nevertheless created, without continuation.
The mercury whose successive Centrafrican authorities know the existence, are left to be exploited by foreign interest without giving to the population any information about it.
Finally, it is very urgent to develop at the same time the private sector (similarly to an administration of mission susceptible to use competences of Centrafrican people for precise missions in their duration, their objective, necessitating pointed competence) and the meritocracy (recruitment by contests supervised by personalities of quality and different professional horizons).

For the initiative of private development, there is no declaration, only the reduction of " country at risk " and the development of infrastructures would entice investors to enter CAR. For the latter alone economic sciences are insufficient.


NB : Ressources, investissements

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