Press Release IMF Approves Second Review Under Enhanced Credit Facility, Requests for Waivers, and Increased Access and Review of Financing Guarantee for Central African Republic Washington, DC – The Executive Board of the International Monetary Fund (IMF) today completed the second review of the Central African Republic’s (CAR) economic and financial program supported by an arrangement under the Extended Credit Facility (ECF). The Executive Board also approved the authorities’ requests for waivers of nonobservance of performance criteria related to international reserves and net domestic financing, requests for modifications of end-June 2023 performance criteria, and an increase in access under the ECF to SDR 116.06 million (about US$151.8 million). The program remains on track, despite the challenges posed by the COVID-19 pandemic and security situation. Economic growth is estimated at 4.1 percent in 2022, supported by a recovery in agriculture and services. Inflation has been contained and is projected to remain below 5 percent in the medium term. The fiscal deficit is expected to narrow in 2023, supported by continued revenue mobilization and spending restraint. The authorities have made progress in implementing structural reforms, including strengthening public financial management and improving the business environment. However, challenges remain in addressing governance and corruption issues, and in ensuring security and stability. Looking ahead, the authorities are committed to maintaining macroeconomic stability and implementing structural reforms to promote inclusive growth and reduce poverty. The IMF will continue to support CAR’s efforts through the ECF arrangement. Staff Report The staff report for the second review under the ECF provides an analysis of CAR’s economic and financial situation. It discusses the performance under the program, the risks and challenges ahead, and the policy recommendations to address them. The report highlights the progress made by the authorities in implementing the program, and commends them for their commitment to macroeconomic stability and structural reforms. It also notes the challenges faced by CAR, including the COVID-19 pandemic, security situation, and governance issues. The report recommends that the authorities continue to implement their economic and financial program to achieve their objectives. It also recommends that the authorities strengthen their efforts to address governance and corruption issues, and to ensure security and stability. Executive Director’s Statement In a statement at the conclusion of the Executive Board’s discussion, the IMF’s Executive Director for CAR, Mr. Mauricio Villafuerte, said: “The CAR authorities are to be commended for their commitment to macroeconomic stability and structural reforms. The program has supported the recovery of the economy, contained inflation, and reduced the fiscal deficit. “However, challenges remain, including the security situation and governance issues. The authorities should continue to implement their economic and financial program, strengthen their efforts to address these challenges, and ensure security and stability. “The IMF will continue to support CAR’s efforts through the ECF arrangement.”This document contains a press release, a staff report, and a statement regarding the second review of the Central African Republic’s extended credit facility. It also includes requests for exemption for failure to comply with the continued performance criterion, increased access, and a review of the financing guarantee.This document contains a press release, a staff report, and a statement regarding the second review of the Central African Republic’s extended credit facility. It also includes requests for exemption for failure to comply with the continued performance criterion, increased access, and a review of the financing guarantee. Key Findings: * Despite a challenging environment, authorities have shown commitment to program reforms. * Economic growth, revenue mobilization, and government liquidity have been impacted by fuel and electricity supply challenges. * Spending volatility has weakened budget credibility. * Public debt rose rapidly last year due to regional emissions, and authorities have ambitious borrowing plans for 2024. * Increasing revenue collection and strengthening spending management are crucial for macroeconomic stability and debt sustainability. Publication Details: * Publication Date: June 28, 2024 * Series: Country Report No. 2024/198 * Subject: Debt, expenditure, fuel prices, public financial management, revenue administration * Frequency: Regular * Language: English * ISBN/ISSN: 9798400282171/1934-7685 * Stock No: 1CAFEA2024001 * Format: Paper * Pages: 103Enhanced Credit Line for Central African Republic The International Monetary Fund (IMF) has approved a second review under the Extended Credit Facility (ECF) arrangement for the Central African Republic (CAR). Waivers for Performance Criteria The IMF has granted waivers for the CAR’s failure to meet two continued performance criteria (CPCs) related to revenue collection and primary spending. This is due to the exceptional circumstances caused by the COVID-19 pandemic and the ongoing security crisis. Increased Access and Review The IMF has increased the access under the ECF by SDR 7.5 million (about US$11.2 million), bringing the total amount available to SDR 110.2 million (about US$164.9 million). The CAR authorities have requested a staff-monitored program with a financing guarantee to support their economic recovery. The IMF staff will continue to monitor the program and assess its performance. Staff Report and Executive Director’s Statement The staff report for the second review and the Executive Director’s statement are available on the IMF website.