The Central African Republic (CAR), a landlocked country in Central Africa, with a population of 4.7 million, is embarking on a long path to recovery. Its history has been marked by political instability and in 2013, a major security and humanitarian crisis erupted, unraveling the country’s social fabric and displacing over 25% of its population. Recent presidential and legislative elections have brought three years of political transition and turmoil to an end.
For the first time in its history, the Central African Republic has a democratically-elected President and Parliament. On March 2, 2016, the Central African Republic's Constitutional Court declared Faustin Archange Touadera the new president-elect. The one time prime minister, who served under the ousted President François Bozizé, garnered 63% of the votes cast in the February 14 runoff election, beating rival Anicet Georges Dologuele who received 37% of the votes. This election concluded the mandate of Catherine Samba-Panza, who has led the transitional government since January 20, 2014 with a mission to organize presidential elections in which she would not run for office. The second round of legislative elections also took place in February and Abdoul Karim Meckassoua, a prominent politician from the country’s Muslim minority, was elected as head of the National Assembly.
The Central African Republic has suffered a great deal of political instability in recent decades. The president of a decade, François Bozizé, who had come to power through a coup in 2003, was overthrown in March 2013, and was succeeded by a Muslim rebel leader Michel Djotodia. Djotodia was forced to step aside less than a year later which prompted reprisal attacks by Christian fighters, resulting in numerous civilian deaths. Sectarian tensions between Muslims and Christians have continued since but the signing of a ceasefire agreement between armed groups in July 2014, and the organization of the Bangui Forum in May 2015, marked the end of violent conflict. The French Sangaris force and the UN have played a major role in seeking to restore peace in the CAR.
The sectarian violence that erupted in March 2013 in the Central African Republic has uprooted nearly 1.2 million people. After 3 years, 384,000 people are still displaced within the country and more than 467,000 people are still refugees in Cameroon, Chad, the Democratic Republic of Congo and the Republic of Congo. More than half of the country's population, the equivalent of about 2.3 million people, are in urgent need of humanitarian assistance, while more than 76% of the population continues to live in extreme poverty. At the national level, only 55% of health facilities are functional; only 25% of health facilities have an energy source, while only 2% have a potable water source.
Although CAR is progressively emerging from crisis, economic recovery has been very modest. After the collapse of 2013, when real GDP fell by 36%, the economy picked up only 1% in 2014, and 4.8% in 2015.
In 2015, tax revenue was still only half the level of 2012, as commercial activity recovered very slowly, so that revenue on both indirect taxes and taxes on international trades are still only half the amount collected in 2012. The contributions of export duties on diamond, timber and gold in the revenues are low. CAR has not experienced external arrears to bilateral and multilateral creditors. Payment of external and domestic debt by the new authorities will be critical to avoid any disruption in the flow of funds from the international community, and adversely affecting the local private sector.
Medium Term Outlook
The successful presidential election is an important step toward national reconstruction. Refugees and Internally Displaced Persons (IDPs) are expected to progressively return to their lands as security improves. Coupled with a lifting of the ban on diamond exports and activation of all forest concessions, a revival of the agricultural and mining sectors could boost real GDP growth to an estimated 5.7% in 2016. Economic growth will also be driven by a rise in import and export activities, assuming continued UN peace-keeping efforts for security and escort of merchandise along the corridor.
Last Updated: Oct 10, 2016