Country Report Central African Republic June 2009

Outlook for 2009-10

The political outlook for the Central African Republic (CAR) remains uncertain, although prospects for resolving the country's crisis are improving owing to the ongoing, if irregular, implementation of the recommendations adopted after the inclusive political dialogue (IPD), which took place in December. Although the president, Francois Bozize, will maintain a firm grip on the capital, Bangui, he will need international help to bring stability to the remote border regions, notably from the UN peacekeeping force, MINURCAT 2, which took over from the EU peacekeeping force, EUFOR Chad/CAR, in March, and the regional force, Micopax. The successful implementation of the IMF's poverty reduction and growth facility (PRGF) has led to the full resumption of donor aid, which will be vital for enabling the government to pay public-sector salaries. The resumption of donor support and the ongoing agricultural recovery should drive real GDP growth of 4.8% in 2009 and 5.2% in 2010, while inflationary pressures should subside as result of lower international prices, reducing average inflation to 7.4% in 2009 and 4.3% in 2010.

The political scene

Amid protests from the civilian and politico-military opposition, and in the face of renewed violence in the north of the country, the government of national unity has attempted to start implementation of recommendations made during the inclusive political dialogue held in December 2008. An ad hoc committee has been created to revise the electoral code, with a view to holding legislative and presidential elections in 2010. MINURCAT 2 has taken over peacekeeping operations from EUFOR. The UN is reforming its peace-building operations in the CAR, replacing BONUCA with an integrated peace-building office and adopting a new strategic framework for the UN Peace-building Commission.

Economic policy

An IMF mission has conducted the fourth PRGF review, confirming the overall positive assessment of the third PRGF review, despite the global economic downturn. The IMF mission has confirmed that the prospects for the CAR reaching completion point under the heavily indebted poor countries (HIPC) initiative during the second half of 2009 are good.

The domestic economy

The CAR has received donor funding for urgently needed rehabilitation of the country's infrastructure. Two mining projects have scaled back their operations after disappointing results and in response to difficulties in raising finance.

Foreign trade and payments

The US government has donated US$20.7m to the UN World Food Programme to support its programmes in the CAR.

This report covers the following industry codes:
SIC Code: 60;1;49;15;70;10
NAICS Code: 52;11;22;23;72;212