mic_none

Economy of the Central African Republic Source: en.wikipedia.org/wiki/Economy_of_the_Central_African_Republic

Economy of the Central African Republic
OBangui Hotel.jpg
OBangui Hotel in Bangui
Currency
Calendar year
Trade organisations
AU, AfCFTA (signed), WTO, ECCAS
Country group
Statistics
GDP
  • Increase $2.321 billion (nominal, 2019 est.)[3]
  • Increase $4.262 billion (PPP, 2019 est.)[3]
GDP rank
GDP growth
  • 4.5% (2017) 3.8% (2018e)
  • 4.5% (2019e) 5.0% (2020e)[3]
GDP per capita
  • Decrease $448 (nominal, 2019 est.)[3]
  • Increase $823 (PPP, 2019 est.)[3]
GDP per capita rank
GDP by sector
2.6% (2020 est.)[3]
Population below poverty line
  • 62.0% (2008)[5]
  • 66.3% on less than $1.90/day (2008)[6]
56.2 high (2008)[7]
Labour force
Increase 1,919,063 (2019)[10]
UnemploymentNegative increase 6.5% (2019)[11][note 1]
Main industries
gold and diamond mining, logging, brewing, textiles, footwear, assembly of bicycles and motorcycles
Decrease 184th (below average, 2020)[12]
External
ExportsIncrease $113.7 million (2017 est.)[4]
Export goods
diamonds, timber, cotton, coffee, buttonquail
Main export partners
ImportsIncrease $393.1 million (2017 est.)[4]
Import goods
food, textiles, petroleum products, machinery, electrical equipment, motor vehicles, chemicals, pharmaceuticals
Main import partners
Decrease −$163 million (2017 est.)[4]
Negative increase $779.9 million (31 December 2017 est.)[4]
Public finances
Positive decrease 52.9% of GDP (2017 est.)[4]
−0.9% (of GDP) (2017 est.)[4]
Revenues282.9 million (2017 est.)[4]
Expenses300.1 million (2017 est.)[4]
Foreign reserves
Increase $304.3 million (31 December 2017 est.)[4]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of the Central African Republic is $2.321 billion by gross domestic product as of 2019,[13][14] with an estimated annual per capita income of just $805 as measured by purchasing power parity in 2019.

Sparsely populated and landlocked, the Central African Republic is overwhelmingly agrarian.[14] The vast bulk of the population engages in subsistence farming and 55% of the country's GDP derives from agriculture.[14] Subsistence agriculture, together with forestry, remains the backbone of the economy of the Central African Republic (CAR), with more than 70% of the population living in outlying areas.[15]

Principal food crops include cassava, peanuts, sorghum, millet, maize, sesame, and plantains. Principal cash crops for export include cotton, coffee, and tobacco.[16] Timber has accounted for about 16% of export earnings and the diamond industry for nearly 54%.[15] Central African Republic is a least developed country according to United Nations.

Infrastructure[edit]

Though periodically unusable, the Oubangui River is nonetheless an important transportation route.

Much of the country's limited electrical supply is provided by hydroelectric plants located in Boali.[14] Fuel supplies must be barged in via the Oubangui River or trucked overland through Cameroon, resulting in frequent shortages of gasoline, diesel, and jet fuel.[14] The C.A.R.'s transportation and communication network is limited.[14] The country has only 429 kilometers of paved road, limited international, and no domestic air service, and does not possess a railroad.[14]

River traffic on the Oubangui River is impossible from April to July, and conflict in the region has sometimes prevented shipments from moving between Kinshasa and Bangui.[14] The telephone system functions, albeit imperfectly.[14] Four radio stations operate in the C.A.R., as well as one television station.[14] Numerous newspapers and pamphlets are published on a regular basis, and one company provides Internet access.[17]

Forestry[edit]

The country has rich but largely unexploited natural resources; meanwhile, forestry remains an important contributor to the C. A. R. economy.

In 2014, the country exported 59.3 million US dollars of forest products. This accounts for 40% of the countries total export earnings.[18]

Natural resources[edit]

The country has rich natural resources in the form of diamonds, gold, uranium, and other minerals.[14] Diamonds constitute one of the most important exports of the CAR, frequently accounting for 20-30% of export revenues, but an estimated 30-50% of the diamonds produced each year leave the country clandestinely.[citation needed] There may be petroleum deposits along the country's northern border with Chad.[14] (Two billion barrels of oil are present in private estimates).[citation needed]

Diamonds are the only of these mineral resources currently being developed; reported sales of largely uncut diamonds made up close to 60% of the CAR's export earnings as of 2001.[14] Industry contributes less than 20% of the country's GDP, with artesian diamond mining, breweries, and sawmills making up the bulk of the sector.[14] Services account for 25% of GDP, largely because of government bureaucracy and high transportation costs arising from the country's landlocked position.[14]

Agriculture[edit]

Cassava plant trimmings to be planted.
A woman harvesting and transporting cassava in Boukoko.
Women processing fresh cassava for cooking.

74% (2013) of the population in the Central African Republic works in the agriculture industry, so Central African Republic's economy is dominated by the cultivation and sale of foodcrops such as yams, cassava, peanuts, maize, sorghum, millet, sesame, and plantains. The importance of foodcrops over exported cash crops is illustrated by the fact that the total production of cassava, the staple food of most Central Africans, ranges between c. 200,000 and 300,000 tons a year, while the production of cotton, the principal exported cash crop, ranges from c. 25,000 to 45,000 tons a year.

Foodcrops are not exported in large quantities but they still constitute the principal cash crops of the country because Central Africans derive far more income from the periodic sale of surplus foodcrops than from exported cash crops such as cotton or coffee. Many rural and urban women also transform some foodcrops into alcoholic drinks such as sorghum beer or hard liquor and derive considerable income from the sale of these drinks. Much of the income derived from the sale of foods and alcohol is not "on the books" and thus is not considered in calculating per capita income, which is one reason why official figures for per capita income are not accurate in the case of the CAR.

The per capita income of the CAR is often listed as being around $400 a year, said to be one of the lowest in the world, but this figure is based mostly on reported sales of exports and largely ignores the more important but unregistered sale of foods, locally produced alcohol, diamonds, ivory, bushmeat, and traditional medicines, for example. The informal economy of the CAR is more important than the formal economy for most Central Africans.[19]

Central African Republic produced in 2019:

In addition to smaller productions of other agricultural products.[20]

Finance and banking[edit]

The financial sector of the CAR, the smallest in the CEMAC, plays a limited role in supporting economic growth. Suffering from weak market infrastructure and legal and judicial frameworks, the financial system remains small, undeveloped, and dominated by commercial banks. Because of economic and security concerns, financial institutions, and particularly microfinance institutions (MFIs), have consolidated their business in the capital, Bangui, over the past few years.[21]

With less than 1% of the total population holding a bank account, access to financial services is extremely limited in the CAR. Microfinance accounts only for 1% of the total credit facilities, serving 0.5 percent of the population. Low levels of mobile penetration – which stand at 30%, a significantly lower percentage than in the rest of the continent – dampen the potential expansion of access to financial services through mobile technology.[21] In April 2022, the country announced that it will adopt the cryptocurrency bitcoin as legal tender.[22]

Economic aid and development[edit]

A bricklayer in Paoua, Central African Republic.

The CAR is heavily dependent upon multilateral foreign aid and the presence of numerous NGO's which provide numerous services which the government fails to provide. As one UNDP official put it, the CAR is a country "sous serum," or a country hooked up to an IV. (Mehler 2005:150) The presence of numerous foreign personnel and organizations in the country, including peacekeepers and refugee camps, provides an important source of revenue for many Central Africans.[citation needed]

In the 40 years since independence, the CAR has made slow progress toward economic development.[14] Economic mismanagement, poor infrastructure, a limited tax base, scarce private investment, and adverse external conditions have led to deficits in both its budget and external trade.[14] Its debt burden is considerable, and the country has seen a decline in per capita gross national product over the last 40 years.[14]

Important constraints to economic development include the CAR's landlocked position, a poor transportation system, a largely unskilled work force, and a legacy of misdirected macroeconomic policies.[15] The 50% devaluation of the currencies of 14 Francophone African nations on 12 January 1994 had mixed effects on the CAR's economy.[15] Diamond, timber, coffee, and cotton exports increased, leading an estimated rise of GDP of 7% in 1994 and nearly 5% in 1995.[15]

Military rebellions and social unrest in 1996 were accompanied by widespread destruction of property and a drop in GDP of 2%.[15] Ongoing violence between the government and rebel military groups over pay issues, living conditions, and political representation has destroyed many businesses in the capital and reduced tax revenues for the government.[15]

The International Monetary Fund (IMF) approved an Extended Structure Adjustment Facility in 1998.[15] The government has set targets of annual 5% growth and 25% inflation for 2000–2001.[15] Structural adjustment programs with the World Bank and IMF and interest-free credits to support investments in the agriculture, livestock, and transportation sectors have had limited impact.[14] The World Bank and IMF are now encouraging the government to concentrate exclusively on implementing much-needed economic reforms to jump-start the economy and defining its fundamental priorities with the aim of alleviating poverty.[14] As a result, many of the state-owned business entities have been privatized and limited efforts have been made to standardize and simplify labor and investment codes and to address problems of corruption.[14] The Central African Government is currently in the process of adopting new labor and investment codes.[14]

Macroeconomic[edit]

The following table shows the main economic indicators in 1980–2017.[23]

Year 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP)
0.93 bil. 1.39 bil. 1.83 bil. 2.35 bil. 2.69 bil. 2.69 bil. 3.22 bil. 3.45 bil. 3.59 bil. 3.68 bil. 3.84 bil. 4.05 bil. 4.29 bil. 2.76 bil. 2.84 bil. 3.01 bil. 3.19 bil. 3.37 bil.
GDP per capita in $
(PPP)
406 537 628 718 738 752 797 841 858 863 883 913 949 599 604 627 652 677
GDP growth
(real)
−3.0 % 3.7 % −2.1 % 4.3 % −1.7 % 2.5 % 4.8 % 4.6 % 2.1 % 1.9 % 3.0 % 3.3 % 4.1 % −36.7 % 1.0 % 4.8 % 4.5 % 4.0 %
Inflation
(in Percent)
13.3 % 10.5 % −0.2 % 19.2 % 3.2 % 2.9 % 6.7 % 0.9 % 9.3 % 3.5 % 1.5 % 1.2 % 5.9 % 6.6 % 11.6 % 4.5 % 4.6 % 3.8 %
Government debt
(Percentage of GDP)
... ... ... ... 93 % 109 % 49 % 49 % 37 % 21 % 21 % 22 % 24 % 39 % 69 % 64 % 56 % 53 %

Exchange rates[edit]

Current XAF exchange rates
From Google Finance: AUD CAD CHF CNY EUR GBP HKD JPY USD
From Yahoo! Finance: AUD CAD CHF CNY EUR GBP HKD JPY USD
From XE.com: AUD CAD CHF CNY EUR GBP HKD JPY USD
From OANDA: AUD CAD CHF CNY EUR GBP HKD JPY USD

See also[edit]

References[edit]

  1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
  2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29 September 2019.
  3. ^ a b c d e f "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund. Retrieved 6 December 2019.
  4. ^ a b c d e f g h i j k l "Central African Republic". The World Factbook (2022 ed.). Central Intelligence Agency. Retrieved 27 December 2019. (Archived 2019 edition)
  5. ^ "Poverty headcount ratio at national poverty lines (% of population) - Central African Republic". data.worldbank.org. World Bank. Retrieved 27 December 2019.
  6. ^ "Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) - Central African Republic". data.worldbank.org. World Bank. Retrieved 27 December 2019.
  7. ^ "GINI index (World Bank estimate) - Central African Republic". data.worldbank.org. World Bank. Retrieved 27 December 2019.
  8. ^ "Human Development Index (HDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 11 December 2019.
  9. ^ "Inequality-adjusted Human Development Index (IHDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 11 December 2019.
  10. ^ "Labor force, total - Central African Republic". data.worldbank.org. World Bank. Retrieved 27 December 2019.
  11. ^ "Unemployment, total (% of total labor force) (modeled ILO estimate) - Central African Republic". data.worldbank.org. World Bank & ILO. Retrieved 27 December 2019.
  12. ^ "Ease of Doing Business in Central African Republic". Doingbusiness.org. Retrieved 25 January 2017.
  13. ^ "UN-OHRLLS Least Developed Countries". UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States. Archived from the original on 17 March 2010.
  14. ^ a b c d e f g h i j k l m n o p q r s t u v Public Domain This article incorporates text from this source, which is in the public domain: "Background Note: Central African Republic". U.S. Department of State. July 2001. Archived from the original on 4 April 2002.
  15. ^ a b c d e f g h i Public Domain This article incorporates text from this source, which is in the public domain: "Central African Republic". The World Factbook. Central Intelligence Agency. Archived from the original on 20 November 2000.
  16. ^ "Central African Republic - Economy | Britannica". www.britannica.com. Retrieved 12 November 2021.
  17. ^ Department Of State. The Office of Electronic Information, Bureau of Public Affairs. "Central African Republic (06/08)". 2001-2009.state.gov. Retrieved 19 February 2019.
  18. ^ "Country profile Central African Republic". EUROPEAN TIMBER TRADE FEDERATION. Retrieved 28 October 2017.
  19. ^ "Let's Be Real: The Informal Sector and the Gig Economy are the Future, and the Present, of Work in Africa". Center for Global Development | Ideas to Action. Retrieved 7 September 2022.
  20. ^ Central African Republic production in 2019, by FAO
  21. ^ a b MFW4A Archived 22 February 2014 at the Wayback Machine
  22. ^ "Central African Republic adopts bitcoin as an official currency". Reuters. 28 April 2022. Retrieved 29 April 2022.
  23. ^ "Report for Selected Countries and Subjects". Retrieved 5 September 2018.

Notes[edit]

  1. ^ modeled ILO estimate

External links[edit]