IMF Executive Board Completes First Review Under the ECF Arrangement for the Central African Republic and Approves US$16.8 Million Disbursement

On December 19, 2016, the Executive Board of the International Monetary Fund (IMF)

completed the first review under the Extended Credit Facility (ECF) [1] arrangement for

the Central African Republic (CAR). The Executive Board’s decision was taken on a lapse-

of-time basis.[2] The completion of the review enables a disbursement of SDR 12.525

million (about US$16.8 million), which will bring total disbursements under the

arrangement to SDR 25.05 million (about US$33.6 million).

The three-year ECF arrangement for CAR was approved by the Executive Board on July

20, 2016 (see Press Release No. 16/352) for SDR 83.55 million (about US$111.9 million, 75

percent of the country’s quota at the IMF).

Program implementation through end-August has been satisfactory. All quantitative

and indicative targets were met, with the exception of the criterion on non-accumulation

of external payments for which the authorities are taking corrective measures. Improvement

in tax revenue, albeit in line with the program target, remains fragile. All structural

reforms have been implemented, albeit with some delays.

However, renewed violence is slowing the nascent recovery, with disruptions to

trade and agriculture, pushing the growth rate for the year to 4.5 percent, lower than

initially programmed. In addition, it has triggered a rise in consumer prices.

Strengthening security is a prerequisite for the successful implementation of the

government’s National Recovery and Peacebuilding Plan to build national cohesion and for

economic recovery in the Central African Republic.

Resolute implementation of the authorities’ structural reform agenda is critical

to support economic growth and reduce poverty. Improving domestic resource mobilization,

which remains extremely low, will support a scaling up of expenditure in priority sectors

such as health, education, security, and public investment. The planned review of tax

policy, the ongoing strengthening of tax administration, and the streamlining of tax

exemptions should gradually bring tax revenue back to its potential. Reforms aimed at

strengthening public financial management, improving cash management and transparency in

the execution of the budget are well underway. Strengthening the institutional framework

to better coordinate technical assistance from development partners will be key to build

capacity, improve governance, encourage private sector development, and attract foreign

direct investment.

[1]The ECF is a lending arrangement that provides sustained program engagement

over the medium to long term in case of protracted balance of payments problems. Details

on Central African Republic’s ECF arrangement are available at

[2]The Executive Board takes decisions under its lapse-of-time procedure when the

Board agrees that a proposal can be considered without convening formal discussions.

Source:International Monetary Fund (IMF).