Central African Republic Overview

LENDING

Central African Republic: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

Context

The Central African Republic (CAR) is a landlocked country in central Africa, with a population of 4.5 million. The country’s history has been marked by political instability. In 2013, a major security and humanitarian crisis ravaged the country.

In December 2012, a coalition known as Séléka (“alliance” in the Sango language), composed of five different armed movements, launched an insurrection against the Government of President François Bozizé, which culminated in a coup d’état in March 2013 (despite the signature of a peace agreement in January 2013 in Libreville, Gabon).

The ousted Bozizé was exiled, and Michel Djotodia, the leader of the rebel forces, assumed power, becoming the first Muslim Head of State of a majority Christian country. Clashes, stemming from sectarian violence between supporters of the defeated president and the forces of the new regime, plunged the country into chaos.

The toll taken by the crisis, which rocked the country in 2013, was heavy: over 1,000 people were killed, and close to one million people fled their homes, with refugees currently representing nearly one quarter of the population. According to the United Nations, 2.2 million people are currently in desperate need of humanitarian aid.

On January 9, 2014, a special summit of the Economic Community of Central African States (ECCAS), convened by Idriss Déby, the president of Chad, aimed to find solutions to the crisis. Accused of passivity in the face of the crisis, Michel Djotodia stepped down. On January 20, Catherine Samba-Panza, the mayor of Bangui, capital of the Central African Republic, was elected interim president by the National Transitional Council (NTC). Her mission is to bring peace to the country, revive a completely paralyzed administration, and facilitate the return of hundreds of thousands of displaced people to their homes. Based on the transition timetable, general elections (legislative and presidential) should be held by the first half of 2015 at the latest.

Economic and Social Context

Even before the onset of the political and security crisis that devastated the country’s economy, the poverty rate in the Central African Republic (62 percent) was one of the highest in the world. Social indicators place CAR among the least developed countries in the world. Thus, the “2013 Human Development Report” of the United Nations Development Program (UNDP)—which classifies countries based on their human development index (HDI)—ranks CAR 180th out of 187 countries. In 2007, the country prepared a Poverty Reduction Strategy Paper (PRSP-1). Yet, life expectancy (48 years) remains among the lowest in the world, and infant and maternal mortality rates have deteriorated over time.

Although the country possesses abundant natural resources, they are under-exploited. Its main exports are wood and diamonds, and subsistence agriculture accounts for almost one third of GDP.

In 2014, the country’s economic outlook is uncertain given the profound impact of the 2013 crisis on the Central African economy: -19.8 percent GDP growth based on October 2013 projections. In 2012, growth (4.1 percent) showed an increase over 2011 (3.3 percent), based on World Bank and IMF estimates (in their November 2013 mission reports). The economy remains fragile owing to successive crises, and the resources generated by CAR are inadequate for its development. State tax revenue represents less than 10 percent of GDP and is unable to finance basic public services. As a result, over 80 percent of public investment is externally financed.

In June 2012, the Central African Republic signed an Extended Credit Facility (ECF) with the IMF. In June 2009, the Central African Republic had reached the completion point under the Heavily Indebted Poor Countries (HIPC) initiative, and total debt stood at less than 30 percent of GDP in 2012. 

Last Updated: Jan 23, 2014
Strategy

The Poverty Reduction Strategy Paper (PRSP-1) prepared by the CAR Government remains the reference document for programming external assistance. It consists of three strategic pillars:

  • Pillar 1:  Restore security, reinforce peace efforts, and prevent conflict;
  • Pillar 2:  Promote good governance and the rule of law; and
  • Pillar 3:  Rebuild and diversify the economy.

During FY 2011, World Bank aid totaled approximately US$39 million, with US$7 million provided by the International Development Association (IDA), US$19 million from IDA’s Crisis Response Window, an additional US$5 million from IDA for flood response, and US$8 million from the State and Peace Building Fund.  

After the 2013 crisis, the World Bank Group announced the release of US$100 million in emergency aid to restore basic public services and provide food, health care, and other vital services to the Central African people. The World Bank will also restructure its portfolio in order to release these funds on an emergency basis. The first tranche of funds disbursed will expedite the process of delivering aid to the country’s many refugees and other people displaced by the conflict in the capital and in rural areas.

In 2014, the World Bank’s portfolio in the Central African Republic (CAR) stands at approximately US$200 million in undisbursed funds under a grant from the International Development Association (IDA).

The World Bank Group will act quickly, in collaboration with United Nations agencies and civil society organizations, to establish emergency medical aid to avoid the spread of disease among the displaced population and to implement public works programs that will provide desperately needed jobs and income for the Central African people.

Last Updated: Jan 23, 2014
Results

The Emergency Urban Infrastructure Rehabilitation and Maintenance (PURISU) project has enabled the Government of CAR to significantly improve the lives of its citizens:

  • 46,600 people are protected against periodic flooding;
  • 541,118 people have access to year-round passable roads; and
  • 53,460 have access to an operational solid waste management system.

The damage caused by the catastrophic floods in the southwestern districts of Bangui on June 14–15 and July 3–4, 2009 was assessed at between US$10 million and US$15 million.

An integrated technical assistance program for the municipality of Bangui, financed by three donors, was implemented. World Bank support included: (a) a US$150,000 grant under the global facility for disaster reduction, reconstruction, and flood preparedness; (b) a US$200,000 grant in the context of PPI operations in Africa for solid waste management planning; and (c) a proposal to Cities Alliance for technical assistance with urban development of up to US$500,000.

Transport: With the recent approval of a third additional financing grant in the amount of US$125 million for the CEMAC Transit and Transport Facilitation project, the International Development Association (IDA) became the main donor in this sector in terms of financial commitments and provided funding for the Government’s investment program. This funding is concentrated mostly on the international corridor with Cameroon and Chad and the latter’s links to the national network. Results have already been obtained with respect to improving some of the main regional roads with support from the European Commission and IDA (Sibut-Grimari road).

Energy: Complementary French Development Agency (€4 million) and World Bank (US$8 million) projects are helping to partially restore a reliable electricity supply from Boali 1 and two hydropower facilities to Bangui customers, in particular the water utility and hospitals. This support will help reverse the serious deterioration of CAR’s energy infrastructure and supply and will improve the financial and management capacity of ENERCA, the energy utility. These two projects are also improving the financial and operating performance of the sector through the introduction of cost-efficient light bulbs and prepaid meters. Provision of safer and more reliable electricity services, mainly to Bangui, will make a significant contribution to security and public confidence during the important transition to stability.

Education: Finalization of CAR’s National Education Strategy laid the foundation for the country’s successful application to the Education for All-Fast Track Initiative Catalytic Fund for a grant of US$37.8 million, facilitated by the World Bank. Results are demonstrated by the improved basic institutional capacity in this sector, but more predictable funding flows and scaled up capacity-building efforts will be needed during subsequent phases to sustain administrative infrastructure, strategic planning, and managerial improvements.

Health: The World Bank-financed Multi-Sector HIV/AIDS, Health and Education Emergency Support Project (US$17.5 million) helped CAR combat HIV/AIDS and provide basic health and primary education services. This project, which closed in March 2012, helped strengthen the capacity of the Government to provide preventive services as well as care and treatment to the sick.

Community Development

The World Bank helped the Government establish a community-led development program including the development and restoration of productive infrastructure, particularly among the most fragile or conflict-affected population groups.

Last Updated: Jan 23, 2014
Partners

CAR is a member of the Central African Economic and Monetary Community (CEMAC) and participates in three regional projects: (i) CEMAC Trade and Transit Facilitation, (ii) the CEMAC Regional Financial Institutions Support mechanism, and (iii) the Central Africa Backbone Project. The transport sector in CAR is dominated by the road sector, with a low level of service (less than 1,000 kilometers are paved, and a large share of the network is in a condition of quasi abandon or inaccessible due to security concerns). This translates into very high transport costs to and from CAR. Another substantial issue is the lack of an operating private sector able to carry out works and deliver services under acceptable conditions, resulting in expensive procurement processes. The Government has prioritized the link to Cameroon and the east-west axis, while trying to progressively improve the condition of the key roads between regions. Funding for both maintenance and rehabilitation is woefully inadequate. The main donors are the European Community, the African Development Bank and IDA, the IMF, and France.

Last Updated: Jan 23, 2014

LENDING

Central African Republic: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments