Central African Republic: Second Review Under the Extended Credit Facility, Requests for a Waiver of Nonobservance of Continuous Performance Criterion, Augmentation of Access, and Financing Assurance Review-Press Release; Staff Report; and Statement by the Executive Director for the Central African Republic

June2024 IMFCountryReportNo.24/198 CENTRALAFRICANREPUBLIC SECONDREVIEWUNDERTHEARRANGEMENTUNDERTHEEXTENDEDCREDITFACILITY,REQUESTSFORAWAIVEROFNONOBSERVANCEOFCONTINUOUSPERFORMANCECRITERION,AUGMENTATIONOFACCESS,ANDFINANCINGASSURANCESREVIEW—PRESSRELEASE;STAFFREPORT;ANDSTATEMENTBYTHEEXECUTIVEDIRECTORFORTHECENTRALAFRICANREPUBLIC InthecontextoftheSecondReviewundertheExtendedCreditFacility,thefollowingdocumentshavebeenreleasedandareincludedinthispackage: APressReleaseincludingastatementbytheChairoftheExecutiveBoard. TheStaffReportpreparedbyastaffteamoftheIMFfortheExecutiveBoard’sconsiderationonJune24,2024,followingdiscussionsthatendedonApril12,2024,withtheofficialsoftheCentralAfricanRepubliconeconomicdevelopmentsandpolicies.Basedoninformationavailableatthetimeofthesediscussions,thestaffreportwascompletedonJune7,2024. ADebtSustainabilityAnalysispreparedbythestaffsoftheIMFandtheWorldBank. AStaffSupplementupdatinginformationonrecentdevelopments. AStatementbytheExecutiveDirectorfortheCentralAfricanRepublic. TheIMF’stransparencypolicyallowsforthedeletionofmarket-sensitiveinformationandprematuredisclosureoftheauthorities’policyintentionsinpublishedstaffreportsandotherdocuments. CopiesofthisreportareavailabletothepublicfromInternationalMonetaryFundPublicationServicesPOBox92780Washington,D.C.20090 Telephone:(202)623-7430Fax:(202)623-7201 E-mail:publications@imf.orgWeb:http://www.imf.orgPrice:$18.00perprintedcopy InternationalMonetaryFundWashington,D.C. ©2024InternationalMonetaryFund PR24/237 IMFExecutiveBoardCompletestheSecondReviewundertheExtendedCreditFacilityArrangementfortheCentralAfricanRepublicandApprovesUS$25MillionDisbursement FORIMMEDIATERELEASE TheIMFExecutiveBoardtodaycompletedthesecondreviewundertheExtendedCreditFacilityArrangementfortheCentralAfricanRepublic(CAR).ThecompletionofthesecondreviewallowsforanimmediatedisbursementofSDR18.60million(aboutUS$25million)totheCARtoaddressitsprotractedbalanceofpaymentsneedsandsustainingpriorityspendingonbasicpublicservices. Theeconomyisprojectedtogrowby1.4percentin2024,upfromthe0.7percentpostedin2023,whileinflationgraduallydeclinesinsubsequentyears.Theseprojectionshingeonexpeditingreformstothefuelmarket. Programimplementationwasbroadlysatisfactoryconsideringsignificantfragilitiesanduncertainties. Washington,DC–June24,2024:TheExecutiveBoardoftheInternationalMonetaryFund(IMF)completedtodaythesecondreviewoftheExtendedCreditFacilityarrangement(ECF)ofSDR147.48million(aboutUS$197million)fortheCentralAfricanRepublic(CAR).TheECFwasapprovedbytheIMFExecutiveBoardinApril2023(seePressReleaseNo.23/129).ThecompletionofthisreviewallowsfortheimmediatedisbursementofSDR18.60million(aboutUS$25million)bringingtotaldisbursementsundertheECFtoSDR49.07million(aroundUS$65million). Incompletingthereview,theExecutiveBoardalsoapprovedtheauthorities’requestforawaiverfornonobservanceoftheperformancecriterionofnon-accumulationofexternalarrears.Further,theExecutiveBoardcompletedthefinancingassurancesreviewundertheECF.TheExecutiveBoardalsoapprovedtheaugmentationofaccessundertheECFtoenableCARtomeettheadditionalbalanceofpaymentneedscausedbydelayedcapitalexpendituredecisionsin2023. TheECFispartofcoordinatedeffortsbyinternationalfinancialinstitutionstosupportthepeopleofCAR.Itwillcontinuetohelpthecountrymeetprotractedbalanceofpaymentsneedsandsustainspendingonbasicpublicservices,includinginthehealthandeducationsectors.TheECFhasallowedtoanchorimportantgovernance-relatedinitiatives,includingtheongoingstrengtheningoftheCourtofAuditandtheFinancialIntelligenceUnit.Theauthoritieshavecommittedtofurtherstrengthengovernance,transparency,andfinancialintegrityframeworks. Followingsubduedgrowthin2023,economicactivityisprojectedtoexpandatafasterpacegoingforwardcontingentonathoroughimplementationoftheagreedreformsinthefuelmarketasthoseaimatimprovingfuelsupplyandreducingpumpprices.In2024,inflationisexpectedtoremainhighataround5percent,drivenbyenergyandfoodprices.Spendingpressurescontinuetoovershadowimprovementsinrevenuecollection.Achievingthetargeted 2 primarydeficitof2.8 percentofGDPthisyearwouldrequiremoreefforts.Atighteninginthefiscalstanceisimportanttoaddressrisingdebtvulnerabilities. TheoverhaulofthefuelmarketremainspivotalformacroeconomicstabilizationandbothsustainedandinclusivegrowthinCAR.Sincethesubsidysystemendedin2022,thefuelmarkethasbeeninfluxwithrecurrentfuelshortagesandprohibitiveimportcosts.Ithasalsocreatedtheconditionsforinformalfuelmarketstothriveandtoerodefiscalrevenues.Thegovernment,withthetechnicalassistancemissionsoftheIMFinFebruary2023and2024,hasadoptedanactionplanofreformsinthissector. FollowingtheExecutiveBoard’sdiscussion,Mr.KenjiOkamura,DeputyManagingDirectorandactingChair,issuedthefollowingstatement: TheCentralAfricanRepublic(CAR)hasshowncommitmenttostructuralreformsundertheECF-arrangementdespitefacingdeep-rootedfragilityandsignificantuncertainty.Bothfinancialandtechnicalsupportfromdevelopmentpartnersremainvitaltotheprogram’ssuccess,toovercomefragility,andtoalleviatehumanitarianneeds.