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

© 2024 International Monetary Fund IMF Country Report No. 24/198 CENTRAL AFRICAN REPUBLIC SECOND REVIEW UNDER THE ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY, REQUESTS FOR A WAIVER OF NONOBSERVANCE OF CONTINUOUS PERFORMANCE CRITERION, AUGMENTATION OF ACCESS, AND FINANCING ASSURANCES REVIEW—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR THE CENTRAL AFRICAN REPUBLIC In the context of the Second Review under the Extended Credit Facility, the following documents have been released and are included in this package: • A Press Release including a statement by the Chair of the Executive Board. • The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on June 24, 2024, following discussions that ended on April 12, 2024, with the officials of the Central African Republic on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on June 7, 2024. • A Debt Sustainability Analysis prepared by the staffs of the IMF and the World Bank. • A Staff Supplement updating information on recent developments. • A Statement by the Executive Director for the Central African Republic. The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents. Copies of this report are available to the public from International Monetary Fund • Publication Services PO Box 92780 • Washington, D.C. 20090 Telephone: (202) 623-7430 • Fax: (202) 623-7201 E-mail: publications@imf.org Web: http://www.imf.org Price: $18.00 per printed copy International Monetary Fund Washington, D.C. June 2024 PR24/237 IMF Executive Board Completes the Second Review under the Extended Credit Facility Arrangement for the Central African Republic and Approves US$25 Million Disbursement FOR IMMEDIATE RELEASE • The IMF Executive Board today completed the second review under the Extended Credit Facility Arrangement for the Central African Republic (CAR). The completion of the second review allows for an immediate disbursement of SDR 18. 60 million (about US$25 million) to the CAR to address its protracted balance of payments needs and sustaining priority spending on basic public services. • The economy is projected to grow by 1.4 percent in 2024, up from the 0.7 percent posted in 2023, while inflation gradually declines in subsequent years. These projections hinge on expediting reforms to the fuel market. • Program implementation was broadly satisfactory considering significant fragilities and uncertainties. Washington, DC – June 24, 2024: T he Executive Board of the International Monetary Fund (IMF) completed today the second review of the Extended Credit Facility arrangement (ECF) of SDR 147.48 million (about US$197 million) for the Central African Republic (CAR). The ECF was approved by the IMF Executive Board in April 2023 (see Press Release No. 23/129). The completion of this review allows for the immediate disbursement of SDR 18.60 million (about US$25 million) bringing total disbursements under the ECF to SDR 49.0 7 million (around US$65 million). In completing the review, the Executive Board also approved the authorities’ request for a waiver for nonobservance of the performance criterion of non-accumulation of external arrears. Further, the Executive Board completed the financing assurances review under the ECF. The Executive Board also approved the augmentation of access under the ECF to enable CAR to meet the additional balance of payment needs caused by delayed capital expenditure decisions in 2023. The ECF is part of coordinated efforts by international financial institutions to support the people of CAR. It will continue to help the country meet protracted balance of payments needs and sustain spending on basic public services, including in the health and education sectors. The ECF has allowed to anchor important governance-related initiatives, including the ongoing strengthening of the Court of Audit and the Financial Intelligence Unit. The authorities have committed to further strengthen governance, transparency, and financial integrity frameworks. Following subdued growth in 2023, economic activity is projected to expand at a faster pace going forward contingent on a thorough implementation of the agreed reforms in the fuel market as those aim at improving fuel supply and reducing pump prices. In 2024, inflation is expected to remain high at around 5 percent, driven by energy and food prices. Spending pressures continue to overshadow improvements in revenue collection. Achieving the targeted 2 primary deficit of 2.8 percent of GDP this year would require more efforts. A tightening in the fiscal stance is important to address rising debt vulnerabilities. The overhaul of the fuel market remains pivotal for macroeconomic stabilization and both sustained and inclu