central african republic - african development bank · 2019. 6. 29. · agriculture, forestry,...

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Central AfricanRepublic

2012

Central African RepublicGrowth should improve in 2012-13 to around 4% a year, thanks to good harvests and better performanceof exports (timber, diamonds, coffee and cotton). Investment in mining and the start of regionalinfrastructure projects (energy, optic fibre lines and transport) should also contribute.

The recovery in public finances should result in a new programme with the IMF (International MonetaryFund) and renewed ties with aid donors. The fight against poverty, which affects 62% of the population,should become more effective as a result.

Restoring public finances should result in a new programme with the IMF (International Monetary Fund) andrenewed ties with aid donors. The fight against poverty, which affects 62% of the population, shouldbecome more effective as a result.

High unemployment among the youth and lack of real job opportunities are worsened by a very youngworking-age population and especially the absence of a government employment policy.

Overview

Prospects for 2012 are good, with real gross domestic product (GDP) expected to grow by 4.2% because ofimproved security conditions, the end of electoral uncertainty, good harvests and resumption of delayedinvestment in mining. Inflation is predicted to be below the convergence criteria of the Central AfricanEconomic and Monetary Community (CEMAC) but rising from 1% in 2011 to 2.8% in 2012 because of therecovery of domestic demand.

Real economic growth steadied to 3% in 2011 thanks to good agricultural food production and revival of themain exports, timber and diamonds, as well as cash crops. But the economy was hit in 2011 by uncertaintylinked to presidential and legislative elections, security concerns and, especially, by delayed mining investmentsand lack of external budget support.

The recovery in public finances begun in 2011 gives hope for 2012-13, with the possibility of a new programmewith the International Monetary Fund (IMF) and renewed ties with aid donors. Foreign-funded programmes andprojects for infrastructure (transport, energy and telecommunications) could add to growth, especially as theyare additional to many investment projects in mining and oil. But such advances depend on:

the security situation and improving political dialogue through the continuing programme for disarmament,demobilisation and reintegration (DDR) of rebels.

restoring public finances to prepare for an IMF programme in 2012.

the international situation, in particular in Europe, which buys most of the country’s exports, along withgood weather so agriculture can maintain its growth.

Youth employment in the CAR reflects the social, political and economic problems of recent decades. The highrate of joblessness and lack of real opportunity are worsened by the very young working-age population andespecially the absence of a government employment policy and one targeting young people. The new povertyreduction strategy paper (PRSP 2011-15) highlights this lack of a national jobs and vocational training policy, aswell as the private sector being a poor source of jobs and the economy’s lack of diversification.

African Economic Outlook 2012 2 | © AfDB, OECD, UNDP, UNECA

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Figure 1: Real GDP growth (Central)

Figures for 2010 are estimates; for 2011 and later are projections.

Table 1: Macroeconomic Indicators

2010 2011 2012 2013

Real GDP growth 3.3 3 4.2 4.6

Real GDP per capita growth 1.4 1.1 2.2 2.6

CPI inflation 1.5 1 2.8 2.9

Budget balance % GDP -1.4 -2.4 -1.6 -1.4

Current account % GDP -9.9 -8.4 -6.9 -7.9


Real GDP growth (%) Central Africa - Real GDP growth (%) Africa - Real GDP growth (%)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-7.5%

-5%

-2.5%

0%

2.5%

5%

7.5%

10%

12.5%

Real

GDP

Gro

wth

(%)


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Recent Developments & Prospects

Table 2: GDP by Sector (percentage of GDP)

2006 2011

Agriculture, forestry, fishing & hunting 55.2 55.2

Mining and quarrying 2.8 2.8

of which oil - -

Manufacturing 6.5 6.5

Electricity, gas and water 0.9 0.9

Construction 4 4

Wholesale and retail trade, hotels and restaurants 12.2 12.2

of which hotels and restaurants - -

Transport, storage and communication 5.2 5.2

Finance, real estate and business services - -

Financial intermediation, real estate services, business and other service activities 6.1 6.1

General government services 5.1 5.1

Public administration & defence; social security, education, health & social work - -

Public administration, education, health - -

Public administration, education, health & other social & personal services - -

Other community, social & personal service activities - -

Other services 1.9 1.9

Gross domestic product at basic prices / factor cost 100 100


Delayed presidential and legislative elections, security issues, a freeze in external funding and the need to makeup for 2010 budget excesses were problems for the economy in 2011.

Real GDP growth was steady at 3% in 2011, slightly down from 3.3% in 2010 and early predictions. Continuedgrowth despite the lengthy election period and security concerns was due to a robust performance by food andcash crops and revival of the country’s main exports, timber and diamonds. The shape of domestic productionremained stable, with the dominant primary sector providing more than half of GDP.

All sectors grew at about the same rate as overall real GDP. The primary sector expanded by 3% thanks to foodcrops (up 4.1%) and higher cash crop output (coffee and cotton) and the main export, timber, was up 5.1%(after falling 15.6% in 2010). The primary sector expansion was due to better security conditions in productionareas and good weather. Another reason was the supply of seeds and inputs to farmers by the InternationalFund for Agricultural Development (IFAD) under a scheme to tackle the food crisis supported by the WorldBank. The livestock industry grew only slightly (0.5%), but peace returned to pasture areas and strategicprogrammes (vaccination of large animals and reintroducing small animals to former conflict areas) were carriedout.

The secondary sector grew 3.9% , thanks to increased mining output (up 7.6% after falling 2.1% in 2010)because of higher world demand. Construction expanded by 5%, up from 3%. Infrastructure projects (health,


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education and transport) begun in 2010 continued. In the tertiary sector, traded services grew 4.6% and non-traded 3.4%.

Private consumption (2.7 percentage points) was the main contributor to the variation in GDP growth. Publicconsumption remained low for lack of government funds. Other overall demand contributors to GNP growthwere marginal, with public investment even slowing growth by 0.2 percentage points because of an absence ofexternal funding linked to poor public finance management, which deprived the government of its main sourceof money. Despite revived timber and diamond exports, net external demand was only 0.7 of a percentagepoint of overall growth.

The economy should expand by 4.2% in 2012 and 4.6% in 2013, driven by agricultural production, investmentin construction and regional infrastructure projects (energy, optic fibre lines and transport). A new IMFprogramme should allow the country to increase its budget as foreign funding resumes, enabling thegovernment to spend money on priority sectors in line with its poverty-reduction goals.


Macroeconomic Policy

Fiscal PolicyExecution of the 2010 budget had a strong and negative effect on implementing budget policy in 2011. The2011 budget aimed to improve domestic public revenue collection capacity; to steady domestic demand bykeeping to budgeted spending; to boost financial reputation by honouring government commitments; and tocontinue reform of public finance management.

Without external help, overall revenue fell significantly to 17.4% of GDP (from 15.4% in 2010). Tax revenuerose slightly to 9.5% of GDP (9.3% in 2010) because of the streamlining of the tax structure for small andmedium-sized enterprises (SMEs), the reform of income tax, and one-off events such as payment of a contract-signing fee by mining companies. Public revenue, especially tax, is still low compared with the sub-Saharanaverage and that of other vulnerable countries, because of structural problems in an economy dominated by aprimary sector paying little tax and because of still inappropriate tax policy. But reforms have been under waysince approval of the 2011 budget and have been well received by the international community.

Government spending fell to 17.8% of GDP from 19.3% in 2010, with both current and capital spending downfor lack of external budget support. A supplementary budget was also required after a year of fast-risinggovernment spending on elections and on stabilising demand. Wages and salaries were slightly up, however,because of new public sector hiring and payment of arrears. The reduced overall spending meant that despiteless government money being available the overall public deficit was kept to 2.4% of GDP in 2011. Thestructure of government spending is still not entirely best suited to meeting development challenges, chieflybecause of the share of (and increase in) spending on transfers and subsidies, which exceed capital spending.The World Bank’s 2011 review said spending on government operations between 2008 and 2010 had becomemore and more disproportionate.

Major reforms were proposed at the September 2011 general conference on public finances to correct the 2010and early 2011 governance problems and return to budget discipline and transparency in execution. The IMFboard’s praise for these steps in January 2012, when it considered a report on the CAR’s 2010/11 economicpolicy and changes, should help consolidate the government’s public finance reform efforts and achievements ofrecent years. Computerisation of the public spending chain (Gesco), begun in 2008 under the global publicfinance reform plan PGRFP (Plan global des réformes des finances publiques), has included the four steps of thebudget process since January 2011. Despite weaknesses, the government financial and economic operationstables (Tofe) are regularly published and are getting better. Budget and accounting terms were harmonised forthe 2010 and 2011 budgets. After strengthening the tax system (including curbing exemptions and fightingevasion), the government included in the 2011 budget reforms to boost collection, such as streamlining taxationfor SMEs, abolishing the reduced value added tax (VAT) rate and converting the business licence into a turnovertax.


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Table 3: Public Finances (percentage of GDP)

2003 2006 2007 2008 2009 2010 2011 2012 2013

Total revenue and grants 9.6 22.9 14.4 15.2 16.1 17.9 15.4 16.5 17.3

Tax revenue 6.8 7.9 7.3 7.9 8.7 9.3 9.5 9.6 9.7

Oil revenue - - - - - - - - -

Grants 1.5 13.4 4.1 4.8 5.3 6.3 3.6 4.6 5.4

Total expenditure and net lending (a) 12.9 13.9 13.2 16.2 15.4 19.3 17.8 18.1 18.7

Current expenditure 9.9 9 9.6 11.7 10.5 12.5 11.3 10.9 10.9

Excluding interest 8.8 8.1 8.2 9.8 9.6 11.5 11.3 10.9 10.9

Wages and salaries 5.2 4.8 4.6 4.3 4.5 4.4 4.6 4.5 4.4

Interest 1.2 0.9 1.4 1.9 0.9 1 0 0 0

Primary balance -2.1 9.9 2.6 0.9 1.6 -0.4 -2.4 -1.6 -1.4

Overall balance -3.3 9 1.2 -1 0.7 -1.4 -2.4 -1.6 -1.4


Monetary PolicyInflation has fallen since 2009 and was an average 1% in 2011 (1.5% in 2010), below the CEMAC’s 3%convergence criterion, thanks to increased local food production, which keeps prices down. Revived domesticdemand will push inflation up to 2.8% in 2012 and 2.9% in 2013, still within the CEMAC range.

Growth of the money supply slowed in 2011 to an estimated 5.5% (from 14.2% in 2010) and loans to theeconomy to 25.5% (40.3% in 2010). Loans to the government also slowed, but those to the privatesector increased by 25% owing to economic buoyancy and the increasing use of banks.

The country’s monetary affairs are in the hands of the Bank of Central African States (BEAC), which ensures afixed rate of the CFA franc BEAC (XAF) to the euro, controls inflation, issues currency and guarantees itsstability, decides and conducts monetary policy of member-countries of the monetary union, conducts exchangeoperations, holds and manages exchange reserves and promotes an efficient payments system within the union.

Economic Cooperation, Regional Integration & TradeThe trade deficit widened slightly, from 8.1% to 8.3% of GDP between 2010 and 2011 because of dearer oilimports and a greater volume of consumer goods imports. Exports by value rose to 16.6% of GDP, (15.5% in2010) mostly because of revived production and higher world demand for diamonds and timber. The currentaccount balance improved thanks to services and current transfers.

The overall external position remained shaky in 2011 mainly because of suspension of various external fundingsand slower capital inflows due to delays and postponement of major mining investment. Foreign directinvestment (FDI) fell to XAF 19.4 billion from XAF 30.4 billion in 2010. Exchange reserves shrank to theequivalent of 2.8 months of imports of goods and services at the end of 2011.

The CAR is firmly committed to regional integration, as noted in the new PRSP (2011-15), and the countrybelongs to several regional groupings, in particular CEMAC and the Economic Community of Central AfricanStates (ECCAS). Regional cooperation is mainly agricultural because of the region’s great potential. The CARbelongs to the Central Africa Forests Commission (Comifac), the International Commission for the Congo-Oubangui-Sangha Basin (Cicos), the Economic Community of Livestock, Meat and Fishery Resources (Cebevirha)and the Lake Chad Basin Commission (CBLT). The country, along with other regional states, has also adopteddirectives and guidelines to improve food security and reduce poverty. The CAR conducts free trade with other


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members of CEMAC.

Table 4: Current Account (percentage of GDP)

2003 2006 2007 2008 2009 2010 2011 2012 2013

Trade balance 0.9 -3.1 -4.2 -7.6 -7.4 -8.1 -8.3 -8.6 -9.5

Exports of goods (f.o.b.) 11.2 10.7 10.5 7.6 6.3 7.3 8.3 8.3 7.6

Imports of goods (f.o.b.) 10.3 13.8 14.7 15.1 13.7 15.4 16.6 16.9 17.1

Services -5.5 -4.7 -5.1 -4.9 -4.6 -5.7 -4.5 -4.2 -3.9

Factor income -0.2 -1 -0.9 -1.1 -1.1 -0.2 -0.1 -0.1 -0.1

Current transfers 2.5 5.5 3.7 3.6 3.9 4 4.6 6 5.6

Current account balance -2.2 -3.2 -6.4 -9.9 -9.2 -9.9 -8.4 -6.9 -7.9


Debt PolicyPublic debt (including domestic debt) greatly increased in 2011 to 40% of GDP, beyond a target of 27%. Thecountry achieved completion point under the Heavily Indebted Poor Countries (HIPC) initiative in June 2009,triggering substantial relief of public debt, which fell from 80.3% of GDP in 2008 to 35% in 2009. Domestic andexternal arrears grew and new loans were obtained from China and India (outside the Paris Club) to fundinfrastructure and social projects. External debt arrears are 0.5% of GDP and domestic arrears 2.7%.

The 2011 IMF Article 4 consultation mission noted the danger of excessive debt because of the worseningindicators in 2011. The economy, based on timber and diamond exports, is also very vulnerable to internationalconditions. The country still has a moderate risk of excessive debt, according to the latest IMF/World Bank debtsustainability analysis in 2010. Further efforts to obtain debt relief will greatly reduce external and public debtin the medium term. But the sustainability analysis showed the country is still vulnerable to external shocks andsaid it should maintain its minimal concessionality requirement in future loans, as excessive debt classification isbased on non-concessional loans.


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Figure 2: Stock of total external debt (percentage of GDP) and debt service (percentage of exports ofgoods and services)


Debt/GDP Debt service/Exports

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

100%

25%

50%

75%

125%

Perc

enta

ge


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Economic & Political Governance

Private SectorGrowth of the private sector, the key to the faster overall growth spelled out in the new 2011-15 PRSP,continues to faces major obstacles. Business conditions are still unattractive in the CAR, according to the WorldBank’s 2012 Doing Business report, though the country slightly improved its ranking, from bottom to last placebut one. Several steps have been taken with the help of the African Development Bank (AfDB). The jointgovernment and private sector committee, set up in 2010 with executive powers to complement thepermanent state/private sector consultation framework, took several decisions in the fields of getting credit,registering property and starting businesses. Reforms were announced in the 2011 budget to streamlinetaxation for SMEs, cutting stamp duty on urban property transactions by 15% and on sales of rural property andland by 12%. As well as these efforts to encourage property investment, significant progress was made towardslaunching the one-stop shop for firms that was set up in 2008.

Despite these important steps, the country still faces serious challenges in promoting private sectordevelopment and stimulating growth, as noted by the 2011 IMF report on CEMAC area competitiveness. Thereport said the CAR should focus on improving the business climate by reforming investment and tradelegislation, strengthening the commercial court, reforming domestic tax law (especially the companies taxoffice), strengthening institutions, improving energy supply and infrastructure to overcome the country’slandlocked status, and diversifying production by setting up regional development projects.

Financial SectorThe financial sector is still small but expanding rapidly. Only four commercial banks operate, alongside theCrédit mutuel de Centrafrique (CMC), a savings and loan co-operative specialising in micro-finance. Loans to theprivate sector were up by a quarter in 2011, reflecting more economic activity and the increasing use of banks.Civil servant salaries are paid through banks, as well as pensions, charges and taxes. But loans to the economy,mainly to the private sector, were barely 11% of GDP in 2011 (9% in 2010).

The banks increased their self-generated assets to comply with most of the prudential ratios of the CentralAfrican Banking Commission (COBAC), especially the ratio of individual loans to the bank’s capital. TheCommercial Bank Centrafrique (CBCA) had solvency problems before being recapitalised in July 2011 when thegovernment issued a treasury bond while the majority shareholder was being chosen. Boosting the risk-management ability of banks needs to be monitored to ensure portfolio quality is maintained. But some creditestablishments have major liquidity problems due to the still low level of deposits and lack of a money market.COBAC wants to strengthen the rules about solvency and risk divisibility, as banks are not obliged to fund thegovernment debt.

Public Sector Management, Institutions & ReformPublic finance management is still a problem and poor transport and energy supply continue to hamper growth.The many excesses in budget implementation since 2010 have delayed an economic and financial agreementwith the IMF. After the September 2011 round table conference on public finances, new steps have been takento restore budgetary discipline and increase transparency in the use of funding and this was welcomed in theIMF’s 2011 annual country report. Extra-budgetary spending in 2010 in particular was investigated andregularised and a ministerial order stressed the need to comply with the normal chain of spending, monitoringand automatic recording of outlays, and to notify the treasury of purchases in its name so they could be latersettled within 48 hours. The treasury’s technical liquidity monitoring unit was reinforced with more technicalsupport from the secretariat of the liquidity monitoring commission.

Natural Resource Management & EnvironmentThe Central African Republic was recognised as a country complying with the rules of the Extractive IndustriesTransparency Initiative (EITI) at the organisation’s March 2011 global conference in Paris, only two years afterbeginning the process, thus becoming one of five African countries considered able to provide adequatetransparency about its mining and oil revenue through co-operation between the government, the companiesand civil society.

Reform of forestry resources and environmental management has included joining the Forest Law Enforcement,Governance and Trade (FLEGT) process, measures to enforce forest laws, granting felling permits, reform ofcustoms valuations and setting up a forestry monitoring centre. After national consensus was reached in 2008and 2009 on signing a FLEGT agreement, talks for a voluntary partnership agreement (VPA) with the EuropeanUnion (EU) began in October 2009 and an agreement was signed on 21 December 2010 in Bangui which willtake full effect in 2014. The CAR is the fourth African country to have signed a VPA after Ghana, Cameroon and


Congo.

About two-thirds of the population use wells or waterholes, higher than the average for comparably vulnerablecountries. About a quarter of the waterholes are not in service and these sources of supply are used by between1 500 and 2 000 people, many more than the figure of 300 set by the government. Access to clean water varieswidely between town and country, with 52% of town-dwellers having access to public water taps (ten timesmore than people in the countryside) and 43% to wells and waterholes (half the access in rural areas). In thecountryside, 95% of water is drawn from waterholes and hand-pumps. Only 14% of the rural population arereckoned to have drinking water, compared with 61% in towns: 43% of rural household members have to walkfor between 30 minutes and an hour to fetch water, compared with 25% in towns.

Political ContextPresidential and legislative elections were finally held in January and March 2011 after being twice postponed in2010. President François Bozizé was re-elected in fairly peaceful voting that raised hopes of forming broadcoalitions for peace and development so as to head off political deadlock and resumed violence. The oppositiondisputed the election results and refused to join the new government. The DDR programme for rebels did notgo as well as hoped. Ugandan rebels of Joseph Kony’s Lord’s Resistance Army (LRA) and, more recently, theChadian rebel Front populaire pour le redressement (FPR), led by Baba Ladé, continue to attack the populationin the north-east. Strengthening peace and restoring security is essential.


Social Context & Human Development

Building Human ResourcesThe new 2011-15 PRSP makes growth of human resources a national priority and states that humandevelopment is the measure of a country’s achievements in the key areas of healthcare, education and percapita income.

A national health development plan, PNDS 2, 2006-15 (Plan national de développement sanitaire) aims torehabilitate and expand infrastructure, make basic healthcare better and more accessible, reduce infant andmaternal mortality, curb the spread of endemic diseases, especially HIV/AIDS, and strengthen the healthcaresystem. PNDS 2 was assessed in 2011 and, despite encouraging progress, many challenges were found toremain. Life expectancy at birth fell from 49 years in 1988 to 43 in 2003. The World Health Organization’s2011 statistical report said in 2009 it was 48 for women and 49 for men. Infant mortality fell from 131 to 106per 1 000 live births between 2003 and 2010 and child mortality from 220 per 1 000 to 175. Infectious diseasesremain endemic and continue to kill many people, with malaria affecting 38% of the population (32% of thesebeing children under five).

The government has set five targets to improve the education system and move towards the MillenniumDevelopment Goals (MDGs) and the aims of UNESCO’s Education for All initiative. These are a 6% increase inboth primary school enrolment and completion; raising gross secondary enrolment by four percentage points;creating ten vocational and technical training centres; and giving professional training to teachers working in90% of higher education institutions. The MDG gross primary enrolment goal will not be achieved by the targetdate of 2015. The enrolment rate was only 36% in 2008/09 (far from the 100% MDG target) and did not changebetween 2009 and 2010.

Poverty Reduction, Social Protection & LabourThe new 2011-15 PRSP, which follows on from the earlier one (2008-10), is a strategic framework to meet thechallenges in these areas and seeks to promote strong growth of direct benefit to the poor and other vulnerablegroups. Poverty affects 62% of the population.

Government employees are regulated under an August 2009 civil service law and private sector workers underthe 1973 labour law regulating conditions of hiring. The private sector legislation is no longer adequate becauseof changes in the labour market and growth of the informal sector. Even formal-sector firms tend not fully toapply it. Little money is spent on programmes for the public sector labour market and very few workers benefit.

The 2011-15 PRSP stresses the lack of any social safety-net but lists proposals to remedy this, including creationof legal and institutional means for social protection and drafting and implementing a national policy. Thefinancial capacity of the national social security fund (CNSS) needs to be restored. Voluntary social security andinsurance mechanisms also need to be created to provide better coverage for informal sector workers. So doprogrammes for women, children and other vulnerable groups such as health insurance co-operatives,contributory or non-contributory social allowances, and other means to reduce financial barriers to access tobasic social services for the disadvantaged.

Gender EqualityThe Central African Republic ratified the 1979 Convention on the Elimination of all forms of Discriminationagainst Women (CEDAW) in 1992 and incorporated clauses about gender equality into the national constitution.Progress made includes amending family law to give men and women equal rights to seek divorce and obtain anidentity card or passport. The law is not always implemented in reality. Violence against women is stillwidespread, as in most countries emerging from conflict, though the government has adopted legislation toprotect women against violence. Prevention and punishment, along with help for victims, are still inadequatehowever.

The halfway-point review of progress towards the MDGs at the end of 2010 showed good results in movingtowards gender equality and primary school gender parity, where girls rose from 60% of pupils in 2003 to 72%in 2008. But gender disparity remains high and the country is 138th out of 146 countries in the UNDevelopment Programme (UNDP) 2011 Gender Inequality Index (GII). Few women are involved inmanagement and control of economic resources. Rural land management is a mixture of tribal customs andformal law. Under a tribal regime, land is inherited, with a bias towards men. Land is managed by tribal officialswho distribute it to men and women who want to cultivate it, but with the right to take it back from them atany time. The cost of urban land excludes the poor, especially women, which limits their access to bank loans,which require property as security. Only 11% of members of parliament are women and 12.5% of thegovernment. Access to ante-natal or childbirth care and family planning is very limited. Only 44% of births are


assisted by qualified health personnel and maternal mortality is estimated at 1 100 for 100 000 births.

Gender equality in growth of capital is a priority, but various conflicts and budgetary problems have preventedfull application of this and creation of monitoring bodies. The PRSP stresses the importance of gender in nationaldevelopment programmes based on the 2005 national programme to promote equality, fairness and autonomyfor women, PNPEE, (Politique nationale de promotion de l’égalité, de l’équité, et de l’autonomie des femmes)and the 2010 AfDB-funded gender report. But despite creation of a gender affairs ministry, not enough money isavailable to implement these recommendations.


Thematic analysis: Promoting Youth Employment

Employment has been affected by the political and economic problems of the past decades and a lack of recentdata and studies prevents clear understanding of the issue. For several years, young people were fighting inarmed conflicts or living with violence and no education.

With half the population under 18, most of the unemployed are young. The UNDP forecast in 2006 that 28 000new job-seekers would be joining the labour market every year by 2015. The education system continues toturn out people with qualifications in over-saturated fields, while technical subjects (accountancy, management,statistics and computing, technicians for the mining and timber industries) in demand from local firms lackstudents. The unemployed include both recent graduates and the unqualified.

The CAR’s labour market, as in most African countries, has a modern urban sector, an unstructured urban sectorand a specific rural labour market. The most recent figures show more that 70% of jobs are in the countrysideand 70% of these are in agriculture. A significant number of the urban young still work in agriculture. Most jobsin towns are in the informal sector, with fewer in the modern private sector. A 2007 UNDP report stressed that,in the modern sector, commercial firms and the civil service were a poor source of jobs and thus contributed tounemployment, especially of young people (those under 30).

The government has no policy or national strategy to cope seriously with unemployment. The 2011-15 PRSPpoints to this as well as to: the lack of vocational training policy; the weakness of the private sector and the non-diversified economy which limits job opportunities and reduces the possibility of protecting people againsteconomic and social risks and shocks; the lack of any policy to provide vulnerable groups with independence andmeans to create their own jobs; the absence of a suitable policy to boost the technical and operational capacityof ministry managers and staff dealing with employment matters; and failure to thoroughly incorporateemployment into development projects.

The PRSP says the government’s main idea for youth employment is to create independent jobs and income-generating activity, develop labour-intensive projects and promote private-sector jobs. The strategy includes:

creating an attractive institutional and regulatory framework to encourage decent long-term employment(through legal and institutional reform, setting up support structures and working with firms).

strengthening institutions in charge of national job and vocational training policy.

introducing a system of information and management of the labour market and vocational training.

Job creation, especially for young people, has worked best in countries where it resulted from determinedgovernment policies, backed by a clear vision and long-term commitment. So the CAR needs to adopt a nationaljobs and training policy linked to a strategy for strong growth that can truly increase job opportunities for youngpeople.


central african republic - african development bank · 2019. 6. 29. · agriculture, forestry,...

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