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Report No. 5332-CA Central African Republic Country Economic Memorandum Public Disclosure Authorized

August 22, 1985 West Africa Region

FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

Doctumentof theWorld Bank

This document hasa restricteddistribution and may be usedby recipients only in the performance of their officialduties. Its contentsmay not otherwiise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

Currency Unit CFA Franc (CFAF) US$1.00 CFAF 484 (*) CFAF 1 million US$2066

CFAF/US$

(Annual Average) (End Period)

212.7 1979 201.0 211.3 1980 225.0 271.7 1981 287.4 328.6 1982 336.3 381.1 1983 417.4 437.0 1984 479.6

MEASURES AND EQUIVALENTS

1 meter (m) 39.37 inches (in) 1 square meter 10.9 square feet (sq ft) 1 kilometer (km) 0.62 mile (mi) 1 hectare (ha) 10,000 m2 or 2.471 .cres 1 kilogram (kg) 2.2 pounds (lbs) 1 pound (lb) 0.454 kg 1 tonne (metric) 2,205 lbs or 1,000 kgs

FISCAL YEAR

January 1 - December 31

(*) Ihe CFA Franc (CFAF) is tied to the French Franc (FF) at the ratio of FF 1 to CFAF 50. The French Franc is currently floating. The exchange rate of CFAF 484 = USS1.00 is the average for early 1985. FOR OFFMCIALUSE ONLY

COUNTRYECONOMIC MEKORANDUM

CENTRAL AFRICAN REPUBLIC

Table of Contents

SUM1MARYAND CONCLUSIONS ...... (1)-(7)

I. THE COUNTRY AND ITS PEOPLE ...... 1

Location ...... 1 Climate and Vegetation ...... 1 Population and Ethnic Groups ...... 2 Historical, Political and Social Developments .. 4

II. THE STRUCTURE OF THE ECONOMY. 6

Natural Resources and Landlocked Position 6 Human Resources and Employment .8 Prices, Wages, and Income Distribution 11

III. PAST ECONOMICGROWTH AND POLICIES 13

IV. SECTORAL DEVELOPMETS .17

Agriculture ...... 17 Agricultural Institutions .25 Major Agricultural Development Constraints 26 Agricultural Objectives, Policies and Programs 28 Forestry ...... 29 Mining ...... 31 Manufacturing ...... 34 Energy ...... 38 Transport ...... 39 Education ...... 44

V. RESOURCE MOBILIZATION AND ALLOCATION ...... 46

Institutional Framework ...... 46 Investment Plans and Financing ...... 47 Public Finance ...... 49 Parapublic Sector ...... 53 Monetary and Credit Developments ...... 58 Balance of Payments ...... ;...... 61 External Debt ... 64

[This document has a restriced distribution and nay beused by recipients only in the performanceof thek official duties. Its contents mnaynot otherwise be disclosed without World Bank authorization. VI. DEVELOPMENT PROSPECTS AND POLICY RECOGMMENDATIONS.. 66

Rural-based Development Strategy ...... 67 Increased Food Production ...... 68 Export-led Development ...... 69 Import Substitution ...... 70 External Assistance ...... 71 Major Problem Areas ...... 73 Medium-term Action Program ...... 73

A. Political Decision-Making. Development Planning and Institutional Framework .... 74 B. Investment Programming ...... 76 C. Agricultural Production and Exports ...... 76 D. Fiscal Performance and Public Sector Management ...... 78

Macroeconomic Adjustment Scenario ...... 79

Pessimistic Scenario ...... 84

STATISTICAL APPENDIX ...... 86

List of Text Tables and Chart Table 2.1: Gross Domestic Product by Origin (value-added),1975-85 7 Table 2.2: Structure of the Economy and Labor Force, 1960-80 ...... 9 Table 2.3: Value Added and Employment by Sector, 1981 ...... 10 Table 5.1: Investment Program, 1980-85 .49 Table 5.2: Fiscal Developments, 1971-85 .51 Table 5.3: Fiscal Performance Indicators, 1971-85 .52 Table 5.4: Parapublic Sector, 1983 ...... --. 55 Table5.5: Composition of Short-Term Credits, December 31, 1981 60 Table 5.6: Monetary Survey, 1975-85.61 Table 5.7: Balance of Payments, 1975-85.62 Table 5.8: Composition of Merchandise Exports, 1966-85.64 Table 6.1: Projections of GDP Expenditures, 1985-95.80 Table6.2: Projections of Public Finances, 1985-95 .82 Table 6.3: Investment Financing, 1980-95 .83 Table 6.4: Resource Gap Projections, 1980-95 .84 Chart3.1: Composition of Final Demand, 1960-85 .. 16

Maps: IBRD 18095R - Population and Density IBRD 18099R - Climate, Natural Vegetation and Rainfall IBRD 19077 - Food Crop Production IBRD 19078 - Cash Crop Production IBRD 19118 - Mining Zones IBRD 18096R - Road Network LIST OF ACRONYHS AND ABBREVIATIONS

ACADOP Agence Centrafricaine pour le Developpement de l'Ouham-Pende ACCF Agence Centrafricaine des Commmications Fluviales ADECAF Agence de Ddveloppement de la Zone Cafdiare ANEC Association Nationale des Eleveurs Centrafricains ASECKA Agence pour la Sdcurite de la Navigation Adrienne en Afrique et I Madagascar ATC Agence Transcongolaise des Communications ATEC Agence Transequatoriale des Communications BADEA Banque Arabe de Developpement Economique en Afrique BCAD Banque de Crddit Agricole et de D4veloppement BCI Banque Centrafricaine d'Investissements BEAC Banque des Etats de l'Afrique Centrale BIAO Banque Internationale pour l'Afrique Occidentale BNCD Banque Nationale Centrafricaine de Ddp5ts BND Banque Nationale de Developpement CLADE Caisse Autonome d'Amortissement des Dettes de 1'Etat CAB Centre Agricole de Bangui CAISTAB Caisse de Stabilisation et de P6requation des Produits Agricoles CAPMEC Centre d'Assistance aux Petites et Moyennes Entreprises Centrafricaines CARIEM Soci6te Centrafricaine de Recherches et d'Exploitations Minieres CCCE Caisse Centrale de Cooperation Economique CENTRA-HYDRO Centrafricaine d'Hydrocarbures CFCO Chemin de Per Congo-Ocean CND Comptoir National du Dia-ant CNIR Compagnie Nationale de Transports Routiers DACCCA Direction de l'Action Cooperative, de la Conmercialisation et du Credit Agricole EDF European Development Fund EEC European Economic Community ENERCA Societe d'Energie Centrafricaine FAC Fonds d'Aide et de Coop6ration FIDES Fonds d'Investissementpour le Developpement EconomLque et Social GIl Groupementsd'Inter§ts Ruraux IBRD InternationalBank for Reconstructionand Development IDA InternationalDevelopment Association IFCC Institut Fran;ais du Cafe et Cacao HESAN Mouvement d'EvolutionSociale de l'Afrique Noire OCSS Office Centrafricainde SAcuritc Sociale ODEL Office de Ddveloppementde l'Elevage ONCPA Office National de Commercialisationdes Produits Agricoles OPPME Office de Promotion des Petites et Moyennes Entreprises ORD Office Regional de Developpement SCAT Societe Centrafricainedes Tabacs SEGA Societe d'Etat de Gestion des Abattoirs SICPAD Soci&t4 IndustrielleCentrafricaine des Produits Alimentaires et Derivds SMAG Salaire Minimum Agricole Garanti SNIG Salaire Minimum InterprofessionnelGaranti SNE Societe Nationale de 1'Habitat SOCADA Socidtd Centrafricainede DeveloppementAgricole SOCATRAF Societd Centrafricainede Transports Fluviaux TOCAGES Total Centrafricainede Gestion .UBAC Union Bancaire en Afrique Centrale UDEAC Union Douaniere des Etats de l'Afrique Centrale UNDP United Nations DevelopmentProgram PREFACE

This is the World Bank's first comprehensive economic report on the Central African Republic (CAR) since 1970. It covers economic developments in the CAR over the past fifteen years, with special emphasis on the country's reconstruction efforts following the abrupt change of government in late 1979. The report is intended to provide an analysis of the country's development potential and constraints, and recommends policy changes and actions required for returning the economy to a path of sustainable growth. It is therefore primarily addressed to the Government and the international aid donor community.

The report is based on the findings of several Bank missions between June 1982 and May 1985. The main mission consisted of Ulrich Hewer (mission leader and author of the report), Jacques Belot (parapublic sector, consultant), Alain Coune (banking sector. IMF). and Luong Nguyen (external debt, consultant). Setareh Razmara assisted in preparing the data base and projections. Janvier Kpourou-Litse prepared the external debt documentation.

The report was discussed with the Government in May 1985 and incorporates information and comments provided by the authorities at that time. COUNTRYDATA - CENTRALAFRICAN REPUILIC PageI of 2

AREA POPULATION DENSITY

Total 623,000 sq Km. 2.6 millions (mid-195) 4.1 per sq Km. Agriculture 49,600 sq Km. Rateof Growth 2.6 (1980-90) 48.5 per sq Km.of agriculture land

POPULATIONCHARACTERISTICS (1981/831 HEALTH

CrudeBirth Rate (per 1,0001 41.0 Populationper Physician (1979): 26,750 CrudeDeath Rate (per 1,0001 16.6 Populationper Hsital bed (1979): 710 Infant Mortality (per 1,0003 142.0 Life Expectancy (years) 47.6 UrbanPopulation (percentageof total) 29.2

EDUCATION(19811831 ACCESSTO SAFE MATER (1978)

Adult Literacy Rate: 33 1 Percentof Total Population 17.4 1 Primwy SchoolEnrollment: 10 Z Percut of UrbanPopulation 40.0 1 SecondarySchool Enrollment; 14 1 Percentof Rural Population 5.0 S

61 PERCPITA IN 193: USS 280 I/

GROSSDOWESTIC PRODUCT IN 1954

US$ mn. I of Total

GOPat MarketPrices 594.8 100.0 GrossDomestic Investment 70.7 11.9 grass National Savings -24.0 -4.0 Exports of Goodsand NFS 149.2 25.1 Ieports of Goodsand IFS 241.4 40.6 Current AccountBalance -94.7 -1.9

OUTPUTAND EMPLOYMENT IN 1981 ValueAdded Employment

USS oln. Z *000 l

Primaryincluding Mining 301.8 46.1 1,119.6 95.3 Secondary 81.3 12.4 12.8 1.1 Services 270.9 41.5 42.3 3.6

Total 654.0 100.0 1,173.7 100.0

60VERNMENTFINANCE, 1984

CENTRALGOVERNNIENT 2/

ICFAFbillions) I of GDP

CurrentRevenues 39.6 15.2 CurrentExpenditures 37.0 14.2 CurrentSurplus 2.6 1.0 Overall Deficit -0.1 0.04 External Grants 3.5 1.4

11 Norld Bankestimate. 2?Budget does not contain externally-financed investments. COUJNTRYDATA - CENTRALAFRICAN REPUBLIC (CONTINUE) Page 2 of2

1977 1979 1990 1981 1982 1983 .19B4 1995 HONEY,CREDIT AND PRICES PROJ.

finCFAF billions outstanding end period) ONEYSUPPLY 20.5 27.1 36.6 45.3 42.9 49.0 51.7 58.0 DANKCREDIT TO GOVERNHENT(net) 10.8 11.0 13.1 16.9 10.7 11.3 10.1 12.5 BANKCREDIT TO PRIVATESECTOR 14.7 15.6 23.5 24.4 30.4 30.9 30.6 33.0

HONEYAS 2 OF GDP 16.6 18.0 21.7 24.0 19.8 20.9 19.9 20.0 GENERALPRICE INDEX 100.0 122.3 141.9 162.8 185.9 202.3 220.5 240.3 ANiAL 6ROUTHRATES GENERALPRICE INDEX 11.0 14.9 16.0 14.7 14.2 8.6 9.0 9.0 BANKCREDIT TO GOVERNMENT (net) 11.3 4.6 11.3 29.0 -37.1 5.9 -10.4 23.5 BANKCREDIT TO PRIVATESECTOR 14.0 3.1 50.4 4.1 24.2 1.6 -0.7 7.8

BALANCEOF PAYHENTS(in US $ millions)

EXPORTSF GOODS,NFS 133.1 165.5 208.3 178.5 152.2 152.2 149.2 154.2 IMPORTSOFGOODS, IFS 194.0 245.9 340.8 252.1 290.9 264.3 241.4 237.9 RESOURCEGAP -50.9 -80.4 -132.5 -73.6 -128.7 -112.1 -92.2 -83.7 INTERESTPAYNENTS INETI -2.0 -1.4 -1.4 -2.2 -4.0 -7.3 -6.6 -9.1 NETTRANSFERS ANDOTHER -1.5 -9.9 -15.2 -7.0 3.4 5.9 4.1 7.6 FACTORPAYMENTS

CURRENTACCOUNT BALANCE -54.4 -91.7 -149.1 -82.8 -129.3 -113.6 -94.7 -84.2

DIRECTPRIYATE INVESTMENT 3.7 34.3 4.7 7.0 7.6 7.9 8.0 8.3 CAPITALGRANTS 35.4 91.2 101.3 82.1 87.3 68.2 57.2 52.1 NETN L L TERNLOANS 18.4 12.8 39.6 31.5 16.7 21.7 27.3 28.9 DISBURSENENTS 21.3 13.1 40.7 34.3 19.0 32.9 33.7 42.1 REPAYMENTS -2.9 -0.3 -1.1 -2.8 -2.3 -11.2 -6.4 -13.3 OTHERCAPITAL NET -2.7 -36.7 3.0 -42.6 -14.9 6.9 13.2 -2.9

OVERALLBALANCE -0.4 -9.9 0.5 4.8 32.6 8.9 -11.0 -2.1 NETFOREIGN ASSETS (END YEAR) -4.5 16.0 29.3 30.9 16.4 18.4 30.2 30.6

MERCHANDISEEXPORTS (AVERAGE 1982-84) 1BRD/1DALENDING, DECEMBER 31, 1984 (US$ millions)

US S sIA. I of total IBRD IDA ------COFFEE 30.8 26.9 OUTSTANDINGAND DISBURSED 49.1 DIAMONDS 28.8 25.2 UNDISBURSED 24.2 COTTON 14.6 12.7 OUTSDANDINGAND UNDISBURSED 73.3 TIMBER 23.0 20.1 TOBACCO 3.0 2.6 RATESOF EXCHANGE YEAR CFAFPER US S OTHERGOODS 14.4 12.5 ------TOTAL 114.5 100.0 1975 214.32 1976 238.98 EXTERNALDEBT, DECEMBER 31, 1984 (US S millions) 1977 245.67 1978 225.66 PUBLICDEBT, INCL.GUARANTEED 224.5 1979 212.72 NON-GUARANTEEDPRIVATE DEBT ..... 1980 211.29 TOTALOUTSTANDING AND DISBURSED 224.5 1981 271.73 1982 328.61 DEBTSERVICE RATIO IN 1984 1/ 11.5Z 1983 381.06 1984 436.96 ------1995(est.)480.00 1/ DebtService as percentageof exports of Goodsand NFS. SUMMARYAND CONCLUSIONS Background

1. The landlockedCentral African Republic cnrrently finds itself in a very difficulteconomic and financialsituation. As the countryis situatedin the heart of Africa, its economicdevelopment is severely handicapped by long and difficult transport routes to and from the ocean, which renderagricultural exports less competitiveand increasesignifi- cantlyimport costs. The small size of the population(2.6 million), dispersedover an area (623,000kM 2) larger than France,and inadequate internaltransport infrastructure result in high productioncosts and prices. A weak human-resourcebase aggravatesthese principaldevelopment constraints. Seriouseconomic mismanagement throughout the 1970s resulted in a dramaticdeterioration of the economy. The presentGovernment has made progresstowards rebuilding the public administrationand institutions and stabilizingpublic finances. Recent incentivepolicies in agriculture appear to have been successful,and after a five year declinethe economy began to grow again in 1984 and 1985.

RecentEconomic Performance

2. In the 1960s and early 1970s,the Government'sintensified cotton program,investments in manufacturing and forestry, significant world market price increasesfor cotton,coffee, timber and diamonds,and a reasonably well-functioning river transportsystem resulted in small but steady increases of per capita incomes. In 1975, GDP stagnated following the petroleumprice increasein 1974, but rose significantlyduring 1975-77 due mainly to cotton and coffeeproduction increases as farmersresponded to substantialproducer price increasesfor both crops in the mid-1970s. The comparativelystrong growthof agriculturalproduction and GDP during the mid-1970sconcealed, however, the developingstructural imbalances causedby a seriesof misguidedsectoral policies and failureto correct bottlenecks.

3. The CAR's current economic difficulties, reflected in the decline of agricultural production during the late 1970s and stagnation during the early 1980s, are mainly a result of misguided goverment policies. Declin- ing producerprices in real terms in the second half of the 1970s, heavy governmentinterference in agriculturalmarketing, an inefficientstate marketing agency for cotton, and the gradual disappearance of consumer goods in rural areas have resultedin the farmers'loss of confidenceand retreat to subsistenceproduction. Politicalfactors such as the politici- zationof cotton production and an ill-advised "agricultural reform" in 1970, which led to an almost complete halt of research and rapid deterioration of extension services, added to the problem. Unsound and over- ambitious public investmentprograms, often characterizedby prestige projectswith littleeconomic justification, and rapidlyincreasing budgetary deficitscaused by an oversizedbut inefficientcivil service,nationalized enterprises and short-term expensive borrowing accompanied and reinforced the economicdecline in the late 1970sand early 1980s. (2)

External factors compounded the domestic problems. World market prices for coffee had dropped substantiallybetween 1976 and 1979. Public investments fell significantly, since foreign aid disbursements were cut in half and domestic capital expenditures dropped to their lowest level ever. Conse- quently, the country's infrastructure became dilapidated, resulting in the breakdown of agricultural marketing channels. Moreover, toward the end of the Bokassa regime, the public administration had virtually ceased to function.

4. Manufacturing, only at a very early and fragile development stage in the CAR, suffered from the general deterioration of the economy during the second half of the 1970s and the Government's nationalization and participation policy in the 1970s. Political instability and financial difficulties in the late 1970s and early 1980s discouraged private investment. Years of rapidly growing employment in the civil service (accounting for about 50% of total salaried employees) and in public enterprises have resulted, however, in incomes which have enabled the urban population to pay, to a certain extent, for high-priced imported goods. Import tariffs, which constitute a major source of budgetary resources, have been ineffec- tive in protecting domestic industry, since it is very difficult to control the CAR's borders. Import substitution policies have also been hampered by a lack of skilled personnel.

5. As a result of these developments estimated aggregate consumption increased by 25% in real terms between 1975 and 1979, while investments and exports declined by 11% and 21%, respectively. Gross domestic product stagnated between 1975/76 and 1981/82 while the population grew at an average annual rate of 2.3%.

6. Since 1980, significant progress has been made towards reestab- lishing at least short-term economic management, a return to financial discipline and removing agricultural development constraints. An emergency program for 1980-81 and a National Action Program, 1982-85 defined rehabilitation of the agricultural sector, reconstruction and maintenance of infrastructure in support of agriculture and redressing the large financial imbalances as the most urgent development priorities. Foreign donors including the Bank are in broad agreement with the Government's development objectives and support sectoral programs with financial and technical assistance. In response to these initiatives private and official capital inflows have risen substantially over the past few years, and gross domestic investments have begun to increase in 1983 and 1984.

7. Very impressive progress has been achieved in the area of public finance. Since 1981, when the military Government came to power, budgetary revenue has increased by almost 50% due to several tax increases, strengthened tax collection and a reduction of customs duty exemptions. The Government has also begun to address the problem of the vastly overstaffed civil service. In 1983, the number of civil servants was marginally reduced, and as of 1984 recruitment into the civil service is to take place on the basis of competitive exams for university graduates with the aim to reduce gradually the number of civil servants. The Government's re- (3) privatization policy in the parapublic sector has also had some moderate success since in several enterprises public administration has been replaced by private management. The public debt management agency has been reorganized and strengthened, and the external debt is being regularly serviced after debt rescheduling alleviated the immediate debt service burden. Consequently, budgetary deficits before amortization of the public debt have almost disappeared in 1984 and 1985.

8. In agriculture, the Government has taken a series of policy measures aimed at raising production of cash crops and food. Producer prices for cotton and coffee have been gradually increased, input subsidies are being phased out, and cotton production is being intensified with its cultivation limited to the most productive areas. Performance of the main rural development agency has been significantly improved. The Government has also rebuilt a priority road network, mainly in support of cotton production, but also to facilitate transportation of food crops and consumer goods. As a result of these measures, and in response to the reappearance of consumer goods in rural areas, agricultural production has begun to recover over the past two to three years.

9. Increased agricultural production, slightly improved world market prices for cotton and coffee in 1983 and 1984 and significantly increased official diamond exports have translated into a short-lived recovery of exports which have risen by somewhat more than 20% in real terms between 1976-79 and 1980-84. However, export earnings stagnated between 1980 and 1984, and high imports, low investment levels with inadequate economic returns, and a drought in 1983 resulted in a declining GDP between 1979 and 1983, followed by economic growth only in 1984 and 1985.

10. These policy measures and the recent growth are encouraging, since the trend of declining GDP appears to have been reversed. The economy has, however, performed considerably below its potential as reflected in the following key indicators:

(a) between 1976 and 1984, GDP has stagnated in real terms while the population has grown by 21%;

(b) although exports as a percentage of GDP have risen significantly between the early 1970s and early 1980s, they have virtually stagnated during 1980-84, and thus failed to play the role of eccnomic engine as was the case in the mid-1970s;

(d) the rate of investment dropped from an already low average annual level of 11% of GDP during 1975-79 to less than 10% during 1980-84; in sp,te of significant progress towards stabilizing public finances, the CAR still does not, after public debt service, contribute to financing its public investments which are fully financed by external sources. (4)

Major Problem Areas

11. The corrective measures the Government has taken to revitalize the economy are steps in the right direction and have proven largely successful. The magnitude of the country's problems require, however, more systematic and comprehensive policy changes, if the economy and per capita income are to grow again on a sustained basis. The following four main problems areas deserve the Government's highest attention:

(a) low level of agricultural production and exports;

(b) need for coherent overall and sectoral development strategies and investment programs, including strengthening of institutionsand decision-making processes;

(c) further control of current expenditure and increase in government revenue in order to achieve and significantly increase public savings; and

(d) action required to remedy the malfunctioning of international transport routes.

Problems in other areas, such as population growth rate, health, and education will have to be addressed at the same time. Although the CAR is not densely populated, the comparatively high population growth rates (2.5% a year) act as deterrent to improvement in the stagnating or only slowly growing economy and will make efforts to correct the other problems cited above considerablymore difficult. The needed reorientation of the education system towards the CAR's economic and social reality and future employment possibilities, and improvements in the health system would also benefit from policies resulting in lower population growth rates.

12. There are no easy solutions to the CAR's economic and financial problems and the adjustment process over the next few years will continue to be painful. The country's problems, which have developed over many years, cannot be expected to disappear overnight -- even after appropriate policies have been put in place. The design and implementationof a rehabilitationand development program by the Gover.ment, using a selective approach for overcoming the most urgent development constraints, is therefore the most important precondition both for economic growth in the future and for attracting sufficient foreign aid on highly concessionary terms. It is, however, also clear that the task of overcoming the C.4R'sdevelop- ment problems surpasses the country's limited financial and technical capacity. Over the next few years, the CAR will therefore need a special effort of financial and technical assistance from the international community. In order to increase the overall impact of external support of the Government's rehabilitation program, additional foreign aid and technical (5) assistance should be complemented by rational donor policies and improved aid coordination. 1/

Recommended Action Program

13. The action program proposed below is part of a development strategy consisting of the following key elements. The Government should continue to promote cash crops and also study the feasibility of exporting food crops to neighboring countries. At the same time, the domestic market should be developed through the promotion of mall-scale industries geared to agriculture. Such a program can be successful only if the Government succeeds in restoring fully the rural population's confidence in the state and its institutions, and in interesting farmers and villages in developing the economy. This requires a systematic improvement of living conditions and the ide.i;fication of economically viable projects. and implies the availability of investment funds in villages or cooperatives. This can be done in the form of direct transfers of state budgetary revenues and/or higher producer prices for cash crops. The latter form of income transfer to farmers or cooperatives appears to be more suited for raising their direct involvement in economic and social development.

14. The Government's rehabilitation and development program should focus on the following four points:

(a) strengthen the political planning and decision-making process and institutions as a basis for designing overall and sectoral development strategies and investment programs;

(b) raise the volume and efficiency of investment through improved project preparation and implementation, application of stricter profitability criteria in selecting new projects and making more efficient use of existing assets;

(c) raise agricultural production and exports through economic incentives, improved performance of agricultural development agencies and extension services; and

(d) improve fiscal performance and public sector management through rigorous control of current expenditures, improved tax collection, better financial planning, and rehabilitation and

1/ The Bank's recent report "Toward Sustained Development. A Joint Program of Action for Sub-Saharan Africa" states: "Unless major changesin African programs and policies are introduced, no amount of external assistance can generate rising levels of per capita income. On the other hand, the changes in policies and programs are unlikely to be effectively sustained unless matched by parallel reforms in donor policies." (6)

re-privatization of public enterprises; foreign-financed investments should be integrated into the national budget.

Adjustment Sceiu-,rio and Medium-Term Prospects

15. The CAR's prospects are good for achieving a modest but sustainable rise in per capita income in the medium- and long-term. This assessment is based on the country's good agricultural resource base, supplemented by mineral resources (diamonds), a labor force whose level of training and experience could be raised rather quickly, and on the assumptions that appropriate macroeconomic and sectoral policies can be designed and implemented, and that the economies of the country's trading partners continue to improve. The growth scenario assumes further that a return to sound fiscal management will not only enable the CAR to finance development increasingly with its own resources, but also induce official and private foreign capital inflows well above the levels recently observed.

16. The policy measures and concrete actions the Government has recently taken (paras. 7 and 8) are encouraging steps towards mobilizing production and financial stability. Taken together they constitute a good framework in vhich agricultural producers, manufacturing enterprises, and state agencies can achieve sustainable economic growth. For several reasons, however, proposed or actually taken policy measures often are less successful than they could be. First, they are rarely the result of a concerted political decision-making process and, therefore, often fail to have the full support of the Government as a whole or its agencies. Second, policy measures tend to be taken on an ad-hoc basis without being sufficiently embedded in medium-term sectoral or overall economic and financial strategies. Third, the country's precarious financial situation frequently forces the Government to retract from policy positions ai7eady taken or to refrain from implementing them fully. Fourth, due to these factors, foreign aid and technical assistance tend to be less efficient. The Government has become aware of these shortcomings and has begun to address them. In 1984, a Coordinating Committee for Economic and Financial Policy was created, the main purpose of which is to assist the Government in preparing policy measures and designing coherent and systematic action prograi&s aimed at overcoming the country's most pressing developmnent constraints in the short- and medium-term. Although the Committee has addressed some important policy issues, the Government should make much better use of its services, and make it the country's main body responsible for preparing development strategies and policy measures to be presented to the Government for approval.

17. The projected annual average growth rate of 3.7% between 1985 and 1990 and 4.2% during 1985-95 is based on: (i) stabilization of public consumption levels; (ii) an improved export performance due to appropriate export promotion policies; and (iii) higher investment levels combined with improved project planning and implementation. Consumption has been projected to grow considerably slower than GDP. and would consequently decline from 107% of GDP during the early 1980s to 97% of GDP in the early 1990s, resulting in a corresponding increase of domestic savings. Real investment (7) is expected to double between 1985 and 1995. and rise from less than 10% of GDP on average during 1980-84 to almost 16Z in 1990, and 17% by 1995.

Alternative Scenario

18. The-CAR's return to economic growth and increase of per capita incomes described in the adjustment scenario is likely to be realized only if the Government takes the required actions without delay. The Government should be aware that there are no self-correcting mechanisms within the economy which would operate towards achieving increasing per capita incomes. On the contrary, the Government's failure to implement the necessary adjustment measures would result in a steady decline of per capita incomes in the late 1980s and early 1990s, and further erode the country's prospects for economic rehabilitation and growth. I. THE COUNTRYADD ITS PEOPLE

Location

1. The Central African Republic (CAR) is situated, as its name Indicates. in the heart of Africa. It is bordered by Zaire and the Congo to the south, Chad to the north, the Sudan to the east and Cameroon to the west. Its area is 623,000 km2, slightly larger than that of France. The CAR forms a transitional area between the sub-Saharan savanna and the equatorial West African forest. The extent of the country's isolation, which at the same time reminds us of the role the CARhas played as a crossroads, is exemplified by the long distances to the Atlantic and Indian Oceans, respectively. Bangui, the CAR's capital, is 1,046 kilometers from Pointe-Noire (Congo), its maim gateway to the Atlnmtic, and almost 1,000 kilometers from Douala (Cameroon) on the coast of the Gulf of Guinea. Obo, in the easternmost part of the country, is about 1,700 kilometers from Mombasa (Kenya) on the coast of the Indian Ocean. Berbirati, in the west, is 600 kilometers from Douala. Paoua, in the northwest, lies about 2,800 miles from Tripoli, which for centuries was Central Africa's outlet to the Mediterranean, and Birao, in the northeastern part of the country, is some 2.250 kilometers from Alexandria and 1,800 kilometers from Port Sudan on the Red Sea.

Climate and Vegetation

2. The CAR is as a vast plateau with gently rolling hills varying between 600 meters and 900 meters in altitude. Mountains in the northwest and northeast are part of the Adamava highlands formation extending from Cameroon to the Darfour ranges In the Sudan, where some of the Nile's confluent rivers originate. The area north of a line connecting these two mountainous regions is part of the Chad basin, a comparatively fertile zone with sandy alluvial tracts; sandstone areas expand south of this line, some of which are rich in diamond deposits. The rest of the territory has a dry surface with occasional laterite formations. The most fertile regions are found In the extreme eastern and southwestern part of the country. 3. The CARhas many rivers with innumerable tributaries which provide fresh water at all seasons, keeping the country green and playing an important role both in the people's domestic life and in connectlng the CARwith neighboring countries. Roughly one third of the CAR's territory forms part of the Chad basin, and the southwest corner of the country is part of the Sangha basin, an important north-south tributary of the Congo River. The rest of the territory lies in the basin of the Oubangui, the country' s most important river. The Oubangui and the capital owe their names to the Boubangui, a trading people, who controlled life along the river for several centuries. 4. The CAR's climate is tropical and influenced by two large high- pressure zones: one from northeastern Africa and the other from the Atlan- tic. The territory can be divided into three climatic zones. The extreme northeastern part of the country around Birao has a Sahelo-Sudanese type climate with a dry season from November to April, temperatures reaching 30°C in April and May, and an average 900 mm of rainfall a year. This region is known for its extraordinary variety of wild animals. South of this region and over most of the CAR territory the climate is intertropical and much more humid. Average annual rainfall increases from 900 mm in the north to 1,300 mm in the south, frequently with very heavy precipitation occurring within a few hours. During the dry season, between November and March, people hunt extensively. Much of the savanna is intermixed with forests or brush. The third climate zone is equatorial and covers roughly the southwestern corner of the country. It is very humid, the dry season is short, often limited to January and February, and annual rainfall amounts to about 1,500 mm in Bangui and Berberati. In Bangui, maximum temperatures average about 25°C and 33C during the rainy and dry seasons.

5. The combined influence of the country's relief, its hydrography and its climate determine its vegetation zones. The forestry zones provide the shade for growing coffee, rubber, cocoa, kola nut trees, pepper plants, palm trees and, of course, subsistence crops. The region around Nola is known to be particularly fertile. The savanna vegetation provides large pasture areas to which the Fulani people brought their herds in the 1920s. The rest of the country's main vegetation zone can be divided into a northern part which is called Sudanese savannA and a southern part called Guinean savanna, where the valleys are bordered with bands of trees. The grass lands of these two zones are sometimes thought to be among the best humid prairies in Africa.

Populationand EthnicGroups

6. The CAR's populationis estimatedto be 2.6 millionin 1985. It grew at an average annual rate of almost 2% during the 1970s, and 1.6Z duringthe 1960s. At the projected population growth rates the CAR's population is expected to reach 3 million people in 1991, more than one third of whom will live in urban centers, if present migration trends continue. The urban population's share in the total increased from around one fifth during the 1950s and early 1960s to one third in the late 1970s and early 1980s,compared to an averageof 20% for African countriessouth of the Sahara. Somewhat less than one fifth of the population lives in citiesof 10,000or more inhabitants,and about two thirds of the population live in rural areas. Bangui has an estimated population of 400,000 people. Compared with other West African countries, the CAR's urban populations,including that of Bangui,appear to have ratherstrong ties with rural areas and suffer less from problemstypical of many large African cities. The overall population density is very low: about 4 persons per square kilometer, or fewer than 50 persons per square kilometer of agricultural land. These figures are, respectively, one tenth and not quite one half of the averages for all sub-Saharan African countries. The statistical data conceal, however, wide variations in population density among the CAR's various regions. The eastern half of the country, and the extreme eastern and northeastern regions in particular, are almost uninhab- ited, whereas the population densities along the rivers and main roads, - 3 - close to urban centers such as Bangui, Berberati, Bossangoa and Bambari, and in the northwestern part of the country, close to Cameroon, are substantially above the national averages. In general, however, the low population density is an important constraint to economic development.

7. The population's crude birth rate is lower than that of other sub-Saharan African countries, while the crude death rate is roughly equal to that of comparative countries. This low birth rate, however, is due largely to the poor health status of women, including a high sterility rate, and will almost certainly rise as health services are expanded. The current high death rate can be expected to fall as part of the same process, thus greatly accelerating the rate of population growth. Such an increase in the population growth rate will further delay achievement of important government goals, including those in education and in industrial productivity. Life expectancy of the average Central African has risen from 39 years in the early 1960s to 46 years for males and 49 years for females in the 1980s, but is still somewhat below the average for all sub- Saharan African countries.

8. The population is composed of many ethnic groups, 2/ or "mara," a term used by Central Africans to designate a group to which people belong by virtue of common customs, appearances and the same language. The Pygmies (or "Babinga" as they are called by other Central African ethnic groups) are hunters and harvesters who live in the forests, migrate with wild animals and preserve their ancestral customs. The Banziri, Yakoma, Bourraka and Sangho, called the "water-people" (or people of the river) live on the banks of the Oubangui River between Mongoumba and Bangassou. The people of the Baya-Mandjia group live throughout the CAR's territory, and the Banda live mainly in the center-east of the CAR, while the Bantu live predominantly in the forest zones. Ethnic groups -Anoare Muslims include the Fulbe and Fulani herdsmen. Foreigners from Senegal, Mauritania, Niger and Chad are engaged in diamond trade in Haute-Sangha, and Europeans and Lebanese are predominant in commerce and small-scale industry.

9. In spite of its ethnic diversity, the CAR has in its language a unifying force. Sangho, "the water language" spoken for centuries along the Oubangui River, was enriched by Portuguese, Arabic, and French elements and is now spoken almost universally throughout the country. In 1964, it became the country's official language and is used in radio emissions and in official speeches and statements, but French is used in public administration and the modern sector of the economy.

2/ According to a demographic survey carried out in 1959, there are 58 ethnic groups in the Central African Republic. - 4 -

Historical, Political and Social Developments

10. The territory of the CAR has been an area of transition and refuge. It was part of former French Equatorial Africa, which had densely forested coastal and central regions. These large forests, it is believed, prevented the development of political entities similar to those which had existed for centuries in other parts of West Africa. Although historians have speculated for some time that the majority of the CAR's present inhabitants - the Baya, Mandjia, Banda, and Zande -- settled in the area as recently as the late 18th and early 19th centuries, it appears that the Pygmies, survivors of a very ancient people, were among the first occupants in the region. Their living areas originally extended considerably further north (Bouar, Bambari), as did the equatorial forests, which covered larger territories at that time. The people of the river seem also to have settled in the region before the migrations which took place in Central Africa during the 19th century. Most of the savanna people who arrived on Central African territory before those migrations have, however, either disappeared or been greatly diminished.

11. Close family relations and manifestations of solidarity determine the people's deep-rooted social structures and values. Strong kinship structures prevented the establishment of organized political authorities, legislative systems, and police forces. The traditional Baya. Banda, and Sara commumities, for example, were opposed to the very notion of a state and have been living for centuries in what appears to be anarchy to the outside observer. Kings or rulers with very wide powers could be selected in situations of common danger, but their power was always limited to the time of hostilities or specific periods. Land could not be owned by individuals but was rather regarded as the property of the clan. Special rules existed for goods traded with foreign ethnic groups.

12. The colonization of the CAR was part of the European colonial policies in Equatorial Africa in the late 19th and early 20th centuries. The first European explorers of the Congo River, however, were Portuguese traders, at the end of the 15th century. Thev were followed by Dutch, French, and English merchants, who traded along the Guinean and Angolan coasts in the following centuries. The interior of Equatorial Africa was explored by French merchants and missionaries during the 19th century. The Italian count Savorgnan de Brazza explored the Congo River in the late 19th century, and he and other expeditions reached Nola and the region of Haute- Sangha in the 1890s. Bangui was founded in 1889, and by 1914, the CAR. known as Oubangui-Chari at that time, was, with the exception of the northeast, under French influence. It was part of French Equatorial Africa, which also included Gabon, Chad and Moyen-Congo. Each of the four territories of the Federation, formed in 1910, was theoretically to retain economic and administrative authority, but a general Government in Brazza- ville was charged with guiding and coordinating the various territorial policies and soon became the dominant and centralized political force.

13. Colonization introduced the French administrative system and rule of trading companies to Equatorial Africa. These companies were given - 5 - exclusiveconcessions to exploitagriculture and forestryfor 30 years, after which periodthey could claim ownershipof whateverland and forests they had developed. In exchange,they were to pay the state a sum varying with the size of their concessions,plus a certainpercentage of their profits. The introductionof taxes at the turn of the 20th centuryforced the population to hunt elephants for ivory and cultivate rubber. When world market prices of rubber, the harvesting of which had been intensified during World War I, dropped sharply between 1920 and 1922, its collection was abandonedand replacedby the cultivationof cotton. Cottonwas introducedbecause its cultivationwould provide the populationwith monetary incometo pay taxes and, at the same time, favor a regularculti- vation of food crops. Introducedin 1924 in Bangassou,cotton soon covered a large part of the CAR's savanna. The mandatorycultivation of cotton, associatedwith a heavy head tax, and the crop's very low profitabilitydid not, however,help make it an attractiveagricultural activity.

14. The CAR's strugglefor independencewas dominatedby Barthelemy Boganda and his popular mass movement, MESAN ('Mouvementd'Evolution Sociale de l'Afrique Noire" -- the "Movement of Social Evolution of Black Africa")founded by him in 1952. Boganda's Government, formed in late 1958, introducedimportant legislative, administrative and economicre- forms. Convincedthat the system of largeEuropean concessionary companies, the forcedcultivation of cotton,and the type of administration introducedby Francewould not lead to a liberationof the populationand rising livingstandards, Boganda's political program stresseddirect politicalaction among the peasants themselves. He created and promoted cooperativesin various sectorsof the economyand parts of the country, stressingthat only free labor coiuldultimately develop the country's agriculture. The cooperatives,however, experienced serious organizational and financial difficulties, due mainly to the peasants' lack of skills and experienceas well as to the reluctanceof Europeanmerchants to cooperate with them. With regard to the "international" aspect of French Equatorial Africa's independence movement, Boganda favored, as a long-term objective, the creation of the "United States of Latin Africa," which would have united the four member countries of French Equatorial Africa, plus the Belgian Congo, Burundi, Rwanda, Cameroon, Angola, and Mozambique. His co- leadersof the other members states,however, did not share his ideas. Boganda died in a plane accident in 1959.

15. The CentralAfrican Republic became independentin August 1960, and in 1964 David Dacko was electedPresident, after having been provi- sionalHead of State between 1960 and 1964. On January 1, 1966, however, he was overthrown by a military coup led by Colonel Jean-Bedel Bokassa who proclAimed himself President for Life and subsequentlyEmperor. A rapid deteriorationof the economy,increasing political difficulties and unrest led to a disintegrationof public administration,and in September1979, Bokassa'sGovernment was overthrown. Former president Dacko resumed power during the followingtwo years, but his reconstructionand stabilization efforts had only moderate success. In September1981, a militaryGovern- ment headed by General Andre Kolingba took control of the country and began to address the CAR's economic and financial problems. -6-

16. The CAR became a member of the United Nations in September 1960 and of the InternationalMonetary Fund and the World Bank in 1963. It participates,together with Cameroon,Chad, the Congo,Gabon, and Equatori- al Guinea in the Customs Union of the Central African States ("Union Douaniere des Etats d'Afrique Centrale", UDEAC) and shares with those countries a common central bank ("Banque des Etats de l'Afrique Centrale", BEAC) and a common currency, the CPA franc issued by that bank. It is also an associate member of the European Economic Community.

II. THE STRUCTUREOF THE ECONOMY

Natural Resources and LandlockedPosition

17. The CAR is well endowed with natural resources. It is self- sufficient in food production, and its export base is sufficiently diversi- fied to permit a moderate and sustainable economic growth. The economy is based on agriculture, which accounts for about 40% of GDP and provides a living for 80% of the population. The key food crops are cassava, groundnuts, millet/sorghum, and sesame. Cotton, coffee and tobacco are grown for cash income. Together with timber they account for more than two thirds of foreignexchange earnings. Livestock,also an importantresource, accountsfor roughlyone third of agriculturalvalue-added. Diamond exploitationcontributes about 8% to GDP but accountsfor about a quarter of the country'sforeign exchange earnings. Manufacturingaccounts for about 6% of GDP and 20% of employipent in the modern sector. Transport, utilities, commerce, and services account for 40% of GDP. High transportation costs and an oversized civil serviceare responsiblefor the rather large share of services in the GDP. 3/

3/ The national accounts presented in this report suffer from serious weaknesses. Agricultural statistics have been collected only very unsystematically and do not reflect real developments. Food crop statistics are particularly distorted since they are based on rough estimates in line with average population growth rates and fail to take into account the economic, administrative and political disruptions the country experienced during the 1970s. Livestock herds appear to have been significantly underestimated since 1976 because they did not take into account important migrations from Chad. In connection with the preparation of a Five-Year Plan, 1986-90, the Government has prepared new preliminary national accounts (valued-added) which show a slight but steady annual growth (except in the drought year of 1983) between 1980 and 1985, compared to an irregular growth pattern as presented in Table 2.1. Both series suggest, however, declining per capita incomes in the first half of the 1980s. The Bank and the Government have agreed to review the final national accounts statistics, which are expected to include the use of resources and also cover the late 1970s, as soon as they have been compLeted. - 7 -

Table 2.1 : CAR - Gross Domestic Product by Origin (value-added),1975-85 (in billions of CFAF)

1975 1979 1980 1981 1982 1983 1984 1985 proj.

at current prices

Agriculture 28.5 55.8 63.4 70.5 75.6 85.5 95.5 106.1 Industry 17.3 32.2 31.8 33.6 41.6 43.0 49.5 54.5 Mining 7.4 13.0 13.1 11.5 12.5 13.0 14.6 15.0 Manufacturing 5.7 11.8 11.4 13.2 16.9 17.2 18.9 20.8 Water & Electricity 0.7 1.0 1.2 1.9 2.8 2.5 3.5 4.6 Construction& Public Works 3.5 6.4 6.1 7.0 9.4 10.3 12.5 14.1 Services 34.8 54.8 63.3 73.6 85.3 86.3 98.5 112.6 Conmerce 14.5 21.2 24.6 27.3 32.4 33.0 40.6 48.9 Transport & Telecoomunications 4.2 4.4 5.6 6.8 8.3 8.8 10.2 11.7 Public Services 11.3 22.0 25.4 30.9 35.3 36.0 38.4 41.9 Private Services 4.8 7.2 7.7 8.6 9.3 8.5 9.3 10.1

GDP at Factor Cost 80.6 142.8 158.5 177.7 202.5 214.8 243.5 273.2

Indirect Taxes Less Subsidies 8.1 9.9 11.1 14.0 15.4 16.4 17.5 GDP at Market Prices 80.6 150.9 168.4 188.8 216.5 230.2 259.9 290.7

at constant 1977 prices

Agriculture 44.5 47.6 46.9 46.1 48.3 46.3 50.6 52.1 Industry 22.0 24.7 25.0 23.0 22.1 24.1 24.8 25.1 Mining 10.6 9.5 10.1 10.1 9.5 9.5 9.7 9.8 Manufacturing 6.8 8.4 8.2 7.4 7.0 7.1 7.2 7.3 Water & Electricity 0.8 0.9 0.9 0.8 0.8 0.8 0.9 0.9 Construction & Public Works 3.8 5.9 5.8 4.7 4.8 6.7 7.0 7.1 Services 40.3 43.0 41.5 42.5 42.0 39.4 37.4 38.5 Coamerce 16.5 15.8 15.2 17.2 17.0 15.4 13.6 14.1 Transport & Telecomunications 4.2 5.8 5.4 4.6 4.8 4.8 5.1 5.3 Public Services 13.9 15.3 14.9 17.9 14.6 14.4 13.8 14.0 Private Services 5.7 6.1 67.0 5.8 5.6 4.8 4.9 5.1

GDP at Factor Cost 106.8 115.3 113.4 111.6 112.4 109.8 112.8 115.7 Indirect Taxes Less Subsidies 7.2 8.1 5.3 4.4 4.1 4.4 5.1 5.2

GDP at Market Prices 114.0 123.4 118.7 116.0 116.5 114.8 117.9 120.9

Average Annual Growth Rate -2.7 -3.8 -2.3 0.4 -2.3 3.6 2.6 Implicit GDP Deflator (1977-100) 70.7 122.3 141.9 162.8 185.9 202.3 220.5 240.3

Source: Statistical Appendix, Table SA 5.

18. The CAR's landlocked position, poor economic management and political instability have resulted in an economic performance considerably below that which could have been expected, given the country's potential. With a per capitaincome of US$270 in 1984, the CAR belongsto the group of least-developedcountries. Bottlenecksin the river/railroute to the sea through the Congo and on the road through Cameroon substantially increase transport costs and reduce the country t s export competitiveness in - 8 - agricultural products. The 3mall size of the domestic market dispersed over a large area makes it difficult to take advantage of economies of scale, with the result that production costs in manufacturing and prices are high. High donestic distribution costs add to this problem. Import substitution, which otherwise would benefit to a certain degree from the country's landlocked position, has been only moderately successful, for these reasons and because skilled labor is scarce.

Human Resources and Employment

19. Information on the CAR's human resource base and employment is scarce. Pertinent data have been collected unsystematically and can be compared over time only with great caution, since they are often contradictory or classificationsand methodologies applied have frequently changed. Employment figures in particular have to be interpreted with care, since the underlying concepts do not easily lend themselves to African economies with large subsistence sectors and flexible boundaries between modern and traditional sectors. Although the population's standard of living in terms of health, nutrition, and education appears to have improved over the past twenty years, the CAR lags behind other comparable low-income countries with regard to several key health indicators. The number of people per physician, per nurse and per hospital bed has declined significantly since the early 1960s. Infant and child mortality rates in 1980 were 50% and 250% higher, respectively, than the average figures for the group of comparable low-income countries. There appears to be no famine in the CAR, since most people can grow the staple food needed for their diet. The quality of the diet is, however, low. There is an abundance of animal protein in the rural areas in the form of large livestock herds, and hunting and fishing i3 widespread.

20. The CAR's adult literacy rate has risen very substantially over the past twenty years. In 1980, about 33% of the adult population aged 15 or more years could read and write compared to only 7% in 1960. Primary school enrollment doubled between 1960 and 1970, and has slowly increased thereafter to 270,000 students in 1983/84, or 50% of the population between 6 and 14 years old. Secondary school enrollment has risen even more rapidly since 1960, and between 1970 and 1984 the number of students enrolled in secondary schools has risen from 7,000 to 50,000, or at average annual rate of 152. Educational standards have, however, remained low (see para. 126).

21. The CAR's estimated labor force grew from 929,000 in 1960, when it represented 60% of the population, to 1,271,000 in 1980, or 55% of the total population. 4/ The reletive decline in the proportion of the total population is due to the fact that the shares of young people (below 15 years old) and old people (65 and over) in the total populationhavit risen. The labor force in agriculture accounts for by far the largest share in the total, althoughit declined from 94Z in 1960 to 811 in 1980, reflecting: (i) the declinein agriculturalproduction; and (ii) migrationto urban areas, especially to Bangui. The industriallabor force more than doubled between 1960 and 1980, but in 1981 employmentin manufacturingstill accounted for less than one percent of total employment. The comparatively rapid increase of the proportion of the labor force in the service sector, from an estimated4% of the total in 1960 to 8% in 1980, was mainly due to the growth in the numberof civil servants.

Table 2.2: CAR- Structureof the Economyand Labor Force, 1960-80

CDP GDP/Labor Force GDP/ LaborForce (billionof CFAF) ('000 or CPA!) Labor Force (.000) Vb) 1977 prices (X) 1977 prices () Agriculture-l

1960 KRrlculture 873.3 94.0 38.3 45.6 43.9 0.5 1.0 Industry 18.6 2.0 13.2 15.7 709.7 7.9 15.8 Services 37.1 4.0 32.5 38.7 87C.0 9.7 19.4 MOTAL VI0 N. -a 1970 xFrculture 975.1 91.0 40.0 39.1 41.0 0.4 1.0 Industry 32.1 3.0 23.1 22.6 719.6 7.5 18.8 Services 64.3 6.0 39.3 38.3 609.6 6.4 16.0 TOMAL 1U7. MD I 1r 1980 AgrIculture 1,117.6 88.0 46.9 41.4 42.0 0.5 1.0 Industry 50.8 4.0 25.0 22.0 492.1 5.5 11.7 Services 101.6 8.0 41.5 36.6 408.5 4.6 9.7 TOTAL I,270.U IEZ TWX -98g.3

Source:Central African authorities and staff estimates.

4t aMe labor force compriseseconomically active persons between 15 and 64 yearsold, Including the armed forcesand the unemployed,but excludinghousewives, students, and other economically inactive groups. Data on labor force and employment are particularly unsystem_ticand unreliable. An industri..' survey questionnaire sent to some 100 enterprisesin 1980, for example, was nswered by only about 20 enterprises, only five of which bave providedinformation which was not contradictory. Classiflcations of enterprises are not consistent from one year to another, and officially reported employment figures reflect the enterprises' responses to questionnaires rather than the actual situation. - 10 -

22. A comparisonof the value-addedby sectorwith the corresponding distributionof the labor forcesreveals that, between 1960 and 1980, somewhatmore than 90Z of the total labor force,on average,was engagedin producingless than 45Z of GDP. Meanwhile,value-added in agriculture measuredin constantprices rose by 30Z while the agriculturallabor force grew by some 28%. These figuressuggest a very low and unchangingrate of output per worker in agriculture. In industry,the GDP/labor-forceratio was roughly 17 times greaterthan that in agriculturein 1960 and in 1970. By 1980. however,industrial productivity had declinedto less than 62% of its 1970 level,and was then only 11 times greaterthan the rate in agriculture. This decreasewas due mainly to the creationof artificial employmentin state enterprisesduring the 19709without a corresponding increasein output. While the comparisonof labor productivitiesin agricultureand the other sectorsover a periodof twentyyears may not be unidirectionaland hide temporaryimprovements in agriculture(in the early 1970s,for example),it is obviousthat a significantincrease in GDP can only be achievedif agriculturaland industrialproductivity is substantiallyraised.

Table 2.3: CAR - VALUEADDED AND EMPLOYMENT BY SECTOR,1981

Value Added Employment in billions % of of CFA francs Total O000 Total

Agriculture 70.5 39.7 1,100.0 93.7 Mining 11.5 6.5 18.6 1.6 Manufacturingal 13.2 7.4 10.8 0.9 Water and electricity 1.9 1.1 0.6 0.0 Constructionand publicworks 7.0 3.9 1.4 0.1 Commerce 27.3 15.4 5.4 0.5 Transportand coiunications 6.8 3.8 1.9 0.2 Publicservices 30.9 17.4 26.5 2.3 Privateservices 8.6 4.8 8.5 0.7 GDP at factorcost U77 TX1173.7 a/ Including forestry. Source: Central African authorities and staff estimates.

23. The predominanceof the traditionalsector and the shift in employment in the CAR's economy becomes also obvious by comparing recent employmentdata (Table2.3). In 1981,only about 55,000people, or less than 5X of the total estimatednumber of employed,worked in the salaried sector. Almost half of them were civil servantswhereas only about one fifth were employed in manufacturing. Twenty years earlier, the modern sector had accounted for about 6% of the active labor force, and civil servants had accounted for only about a quarter of those employed in the - 11 - modern sector. There are no indicationsthat the doublingof the number of civil servantsover the past twentyyears resultedin an improvedpublic administration.On the contrary,government services steadily deteriorated during the 1970sand it is now generallyrecognized that the vastly oversized civil servicein the capitalhas become one of the country'smajor employmentand developmentproblems. At the same time, the countryis understaffedwith civil servantsin rural areas. The scarcedata on the labor-forceand employmentdo not includeinformation on unemploymentor underemploymentin the economyas a whole or by sector,but significant unemployment and underemployment prevails in many sectors. Notwithstanding the weakness of the concept of unemployment in an economy like that of the CAR, unemployment, especially among young Central Africans, appears to have risen in recentyears, judgingfrom the decline in production,the employment pressureon the civil service,and, last but not least,occasional outbreaksof labor unrest.

Prices, Wages and IncomeDistribution

24. Wages and salariesare paid to only a small sectionof the economicallyactive populationbecause of the large subsistencesector. In spite of the significant unemployment of semi- and unskilled workers, wages play only a minor allocativerole in the economy,mainly because:(1) the public sector dominates the modern wage economy; (ii) minimum wage rates are guaranteed; and (iii) until recently, labor unions were rather strong. Minimum wage rates are guaranteed by law to all workers in the private and public sector. In the privatesector, wage rates are fixed for agricultural workers ("salaire minimum agricole garanti", SMAG) and for all other workers ("salaire minimum interprofessionnel garanti", SMIG"). Wage rates are determined for each category of skilled and unskilled workers through collective agreements ("conventions collectives"), negotiated between the representatives of employees and those of employers in bargaining sessions which are presided over by officials of the Ministry of Labor. In sectors not covered by collective bargaining, wages are regulated by the Govern- ment, which ensures that minimum wages are observed. A two-zone system which distinguished between Bangui and its suburbs, on the one hand, and the rest of the country, on the other, with regard to minimum wage rates (urban workers were paid somewhat more for similar tasks) was abolished in 1979. Actually paid wage rates sometimes exceed minimum wage rates by 40-60%, and skilled workers may earn twice as much as the minimum rate, but there are also many workers who have to accept wages below the guaranteed minimum levels. After having remained constant throughout the 19708 (Appendix, Table SA 28)- minimum wages roughly doubled between 1978 and 1980, when the labor union succeeded in substantially raising wage rates in order to compensatefor inflation. Since 1980,minimum wage rates have remained unchanged in nominal terms, which implies a significant decline in workers' purchasing power, since retail prices rose by about 33% between 1981 and 1984 (Appendix, Table SA 27).

25. Wages in the public sector are indexed accordingto a scale which rangesfrom 130 to 2,000. Each index point representsCFAF 100, and salariesrange accordinglyfrom CFAF 13,000to CFAP 200,000per month, with - 12 -

CFAF 60,000 per month being the approximate average monthly income. Substantial salary increases have been granted in recent years in the form of: (i) upward movements of the salary scale, applied uniformly throughout the civil service; (ii) promotions; and (iii) job reclassifications. As a result, the total civil service wage bill almost doubled between 1978 and 1982.

26. Information on prices and price movements is scarce, and the price indices available can only serve as rough indieators of inflationary pressures. The only existing consumer price index covers the household consumption of expatriates in Bangui in 1958; the elaboration of a more recent index based on 1978-79 consumption patterns in both rural and urban areas has not yet been completed. Available information suggests that Inflationary pressures have intensified over the past 25 years. Between 1978 and 1983, wholesale and consumer prices nearly doubled, rising at an average annual rate of almost 15%. compared to average annual increases of about 9Z in the 1970s and 4Z in the 1960s. These price index movements reflect, of course, the general trend in world inflation, and in particular that of France, the CAR's main trading partner. Substantial wage increases over the past faw years, declining production and a shortage of imported goods have also contributed to the acceleration of inflation.

27. In principle, prices of virtually all products are controlled at both the wholesale and retail levels through the fixing of profit margins, as a percentage of import or production costs. Importers and domestlc producers thus have no incentive to reduce their costs. In practice, however, the mark ups of only a few key products such as bread, petroleum products, and other basic goods are monitored. All imported products have to pass through a so-called confirmation process ("homologation"), whereby importers submit information on the c.i.f. value of the product to the National Price Committee ("Comite National des Prix") for approval of the product's wholesale and retail price. Prices of imported goods may thus change with each new shipment, and usually vary among different importers at both wholesale and retail levels. In addition, inadequate storage facilities, irregular river transport conditions, and the rather weak position of importers vis-a-vis foreign exporters results in small and frequent shipments, higher import costs, larger profits for importers, and higher prices. Prices of domestically manufactured products such as beer, shoes, furniture, or cigarettes are also fixed on the basis of production cost information submitted by manufacturers. The Ministry of Commerce and Industry is responsible for monitoring price regulations. Prices are supposed to be controlled by price inspectors, special price teams ("brigades des prix"), and the police.

28. The Government is faced with a difficult dilemma with regard to an appropriate price policy. If it decides to pursue a liberal price policy, and not interfere with the pricing practices of enterprises, consumers are likely to be charged prices reflecting the lack of competition in the CAR. The Government's price regulations and controls, developed because of a concern about monopolistic pricing, have, however, proven to be counterproductive, since they have not prevented inflationary pricing - 13 - practices. Moreover, the mechanism of price regulation is such that it encourages inefficient import behavior and production. Price regulations should therefore be abandoned for products where the market produces competitive prices, or where the costs of uncompetitive pricing are too insignificant to justify price controls.

III. PAST ECONOMICGROWTH AND POLICIES

29. In the 1960s. the Government's intensified cotton program (which frequently forced farmers to grow cotton), investments in import substituting manufacturing and in forestry, combined with rising diamond exports, and a reasonably well-functioning private river-transport system, led to a real growth of GDP of almost 2% per year. This implied a slight improvement in per capita income, since the population was growing at an estimated average annual rate of 1.6% over the same period. Consumption, which averaged about 94% of GDP, grew at an average annual rate of about 2.4% in real terms with public consumption growing somewhat faster than private consumption. Investment amounted to about one fifth of GD? and rose at a rate of about 3% a year. Foreign trade expanded rapidly during the 1960s. Exports and imports nearly doubled in real terms, and amounted to 22% and 41% of GDP in 1970 respectlvely, compared to 14Z and 27% in 1960.

30. Substantial increases in agricultural production and significant world market price increases for the CAR's export commodities (including diamonds) during the early and mid-1970s translated into average anrual GDP growth rates of 2.7% between 1970 and 1977, or an average increase of per capita income of about one percent a year. Following the petroleum price increase in 1974, GDP stagnated in 1975, but expanded at a rate of 4% a year during 1975-77. This growth was due mainly to increased cotton and coffee production as farmers responded to producer price increases for cotton (61%) and coffee (100%) in the mid-1970s, and partly to increased manufacturing activities.

31. This comparatively strong economic growth concealed, however, the developing structural imbalances which were to cause the economic decline in the following years. These imbalances were reflected in the following main indicators. First, investment expenditures dropped by more than half, from 25% of GDP, on average, in the early 1970s to 11% in the late 1970s. Second, the decline in investment was aggravated by a change in the composition of investment expenditures over the same period: the share of investment funds allocated to agriculture declined by 4 percentage points, while industry's share rose by more than 8 percentage points. This meant a decline in economic return of invested funds since public or mixed enterprises accounted for a large share of these investments. Third, consumption rose three times faster than GDP during the second half of the 1970s, to reach almost 100% of O)P during the late 1970s (Chart 3.1).

32. The CAR's economic decline during the late 1970s was caused by misguided policies, serious mismanagement in virtually all areas (for details see Chapters IV and V), and developments beyond the government's control. In agriculture, the Government replaced economic incentives with direct interference and administrative controls. Producer prices of cash - 14 - crops declined in real terms between 1977 and 1979, and in the food crop subsector the Government tried to impose a monopsony on farmers and control prices. The "agricultural reform" in early 1970 led to a halt in agricultural research and proper marketing services, and the Government's poorly trained extension agents policed and coerced farmers rather than assisting them. An inefficient state marketing agency increasingly failed to pick up harvested cotton. Heavy taxation in the form of low producer prices, a per capita tax, and the frequent misuse of funds generated in agriculture led to a significant decline of rural incomes. Consequently, farmers developed a deep-rooted distrust of the Government and its agencies. These factors and the gradual disappearance of consumer goods in rural areas caused farmers to withdraw from production for market and retreat to mere subsistence production.

33. The state's direct involvement in manufacturing during the 1970s had a similarly negative impact on production and the CAR's financial situation in general. The Bokassa Government created public enterprises in the productive sectors, infrastructure and commerce. Initially, some of these enterprises increased output in response to economic growth in agriculture and demand generated by the public sector. Heavy overstaffing, inadequate management, low administered prices and tariffs, high operating costs due to low capacity utilization and the build up of payment arrears of the state vis-a-vis enterprises as well as among the latter themselves resulted, however, in substantial operating losses and even loss of capital. The exact size of the parapublic sector's deficit remained unclear since bookkeeping was practiced only in a rudimentary form. Most public enterprises failed to service their contracted foreign debt either because they did not generate profits or gave it lowest priority. Increasingly, enterprises could no longer acquire spare parts or equipment and production came to a halt. This participation policy in manufacturing had important consequences which continue to slow down the present Government's rehabilitation and reconstruction efforts. Private investment declined as investment opportunities for private entrepreneurs disappeared and the latters' lack of confidence in government operations continues to attract only moderate private foreign investment. The liberal employment policy of the Bokassa Government in the parapublic sector led to subsidies and foregone tax revenues resulting in large budgetary deficits which remain a key concern of the Government's reconstruction efforts.

34. The difficulties experienced in the productive sectors during the last years of the Bokassa regime were accompanied by equally grave deterio- rations in infrastructure and public administration. Roads were not maintained and the international transport services on the river/rail chain deteriorated steadily. The number of civil servants rose rapidly but at the same time they performed increasingly unsatisfactorily since the political leadership provided no guidance, rewards were based on political rather than objective performance criteria and an oppressive political climate suffocated any political or administrative initiative. At the end of the Bokassa regime the demoralized civil service had virtually ceased to function. Regular contacts with foreign donors and project preparation and implementation had become impossible. - 15 -

35. The economic decline and the disintegration of the public administration were accompanied by irregular external debt servicing, and public debt recordings were discontinued. The ensuing loss of the Government's credibility resulted eventually in a sharp decline of foreign aid disbursements in 1979. Political instabilities in the late 1970s and international interventions-in 1979 aggravated the economic difficulties and led to the abrupt change of Govermment in the same year.

36. As a result of these developments, agriculture grew only very moderately or stagnated during the second half of the 1970s, and agricultural output per capita declined by about 2% a year. The moderately growing manufacturing and public work sectors could not compensate for this decline, and in 1979 GDP began to fall. Per capita income, which had increased significantly between 1975 and 1978, dropped more than 5% a year in 1979 and 1980.

37. Since 1980, a series of economic and financial policy measures have been taken which have only recently begun to reverse the trend of economic decline. Substantial producer price increases, a significantly improved rural development agency in the cotton zone, and a rehabilitated road network in support of agriculture have resulted in a slow but steady rise in agricultural output in 1982 and 1984, interrupted by the drought in 1983. Agricultural statistics are very weak, but most of the improvement appears to result from increased cattle herds which have migrated from neighboring countries, especially Chad, while food and cash crop production seem to have risen markedly only over the past two to three years. A slow resumption of agricultural development projects in the early 1980s, continuing problems with agricultural extension services, and in regaining the farmers' confidence in state marketing agencies and policies were responsible for the delayed production response. Unfavorable world market prices for cotton, timber, and coffee, and the recession in the CAR's trading partners aggravated domestic developments, resulting in stagnating exports in real terms between 1980 and 1984. Consequently, GDP continued to decline between 1980 and 1983. It then began to grow again, but in 1984 had only regained its 1976 level.

38. The strong economic growth in 1984 and projected growth in 1985 augur well for continued good performance of the economy. In spite of the Government's successful financial stabilization over the past few years, however, the country's development is still being financed exclusively by external sources. This had led to an almost doubling of foreign public aid disbursements between 1980 and 1985, resulting in a heavy debt service burden. Yet, the substantial increase in agricultural output needed to bring about a sustainable rise in per capita income in the medium-term will require large additional investments. The Government's resource mobilization strategy should, therefore, concentrate at the same time on the following key elements: (i) identify and promote agricultural and small- scale industrial projects with proven economic returns capable of debt servicing; (ii) raise government revenue in order to make public debt servicing manageable and gain better control over investments through participation in foreign-financeddevelopment projects; and (iii) help raise private savings and strengthen domestlc entrepreneurshipthrough appropriate incentives and policies. - 16 -

Chart 3.1: CENTRAL AFRtICANREPUBLIC COMPOSITION OF FINAL DEMAND, 1965-1985 CAS X OF CURRENT DP)

TarAL EXPENCDfT AS X OF 1213- TTALZ PODT3 / ,c:...... ,,-'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~..cC?::::- i ..:.".....

118 .. *...... *~~~~~~~~~~~~~~~~~~~......

58- a8 C,

PRIVATE CONSUMPTION z w a.

28-

1908 1903 1900 1989 1972 1975 1978 Ia81 1984 YE-AR

The resource gap is defined as the excess --- GDSP of domestic investment over domaestic - TOTAL EXPENOITRE savings and is reflected in the balance INVESTMENT of payments as the difference between - --- INVESTMENT 4. GOV. COINSUMPTIDN imports and exports. - 17 -

IV. SECTORALDEVELOPMENTS Agriculture

39. Agriculture is the mainstay of the economy. Agricultural production, concentrated in two main areas, Ouham and Ouham-Pende in the northwest, and Ouaka, Basse Kotto and M'Bomou in the south-central part of the country, is predominantly based on smallholder farming and largely subsistence-oriented. Approximately 350,000 farms families, with an average of 5.2 persons per family, half of whom are economically active, cultivate an average 1.7 ha each, or about 600,000 ha in total, which amounts to about 9% of the total arable land. The rural population is dispersed over 8,000 villages situated along roads and on hilltops which are often far away from valuable agricultural land. This situation, combined with an inadequate system of feeder roads and an extensive mode of agricultural exploitation based on Itinerant cultivation practices, at times puts pressure on culti- vable land which is much higher than apparent in the statistical averages. The seminomadic Fulani people specialize in animal husbandry throughout the northwest of the country and have extended their migrations increasingly southward. Husbandry of cattle is practiced in an extensive fashion, although migration of herds from the Sahel zone following the droughts between 1968 and 1974 and the tsetse fly in the south of the country have put some pressure on the pastures in the west.

40. Food crops are grown on about four fifths of the cultivated area and account for almost 40% of the value-added in agriculture. Cassava, groundnuts, and millet and sorghum are the principal food crops, followed by maize, rice, sesame, and vegetables. Farmers use roughly 0.5 ha of their farmland for cotton, 0.5 ha for cassava, and the rest for other food crops. A nine-year crop rotation commences with maize and sesame on cleared -and, followed by cassava In association with groundnuts, the cassava being harvested in the third year. Three years of cropping are followed by at least six years of fallow. Use of cash inputs on food crops is negligible. Seed and cassava cultivars are normally retained from the previous crop but are often of poor quality. There is virtually no use of hired labor and most farmers use rudimentary tools such as the hoe and machete. Animal traction is restricted to the key cotton-producing areas of Ouham and Ouham-Pende in the northwest.

41. Over the past decade food production appears to have stagnated or slightly declined. (Appendix, Table SA 11). During the same period, the population increased by 31%. The declining trend in food production during the 1970s was caused by: (i) the gradual disappearance of consumer goods in rural areas; (ii) stagnant or falling official food crop prices in real terms; (iii) declining cotton production, since most food crops are produced in close associationwith cotton; (iv) the deterioration of the marketing channels, including farm-to-markets roads; (v) declining quality and shortage of seeds; and (vi) lack of simple tools.

42. Throughout the 1970s,the Governmentattempted to regulatefood crop marketingand pricing. In 1970, a nationalmarketing office ("Office National de Commercialization des Produits Agricoles", ONCPA)was created which had a buying monopoly for all agricultural products except cotton; in - 18 - principle, it guaranteed the purchase price, a secure market outlet to all producers, and a set consumer price. In 1972, ONCPA's monopoly was lifted and, until 1974 when it was abolished, it had to compete with licensed private traders. Until 1979/80, official producer prices tended to be enforced, with the exception of cassava, which was not subject to the system of licensed buyers. For the most part, official prices were lower than market prices. For example, the official price of shelled groundnuts was 70 CFAF/kg in 1980/81, yet the local producer price in a key production area was 150 CFAF/kg. Goverment continues to set official prices, but now treats them as indicative or floor prices. According to studies of cassava marketing undertaken in the mid-1970s and 1981, spatial price spreads largely reflect transportation costs which implies that the private marketing system is reasonably efficient. Government should therefore discontin- ue licensing traders and setting official prices and limit its intervention in food crop marketing to indirect support. Priority should be given to regular collection of price data which is an essential element for analyz- ing the food situation and establishing national income accounts.

43. Cash crops. Cotton, coffee and tobacco -- the three major cash crops - have traditionally accounted for about 3% of GDP, 5 or 6% of agricultural value-added and about 40X of annual merchandise export earnings. During the 1970s cotton production declined steadily and coffee production stagnated or increased only slightly, though statistical information needs to be carefully evaluated as part of the CAR's coffee exports include production from Zaire.

44. Cotton production, introduced in the early 1920s, increased rapidly during the subsequent two decades but yields remained very low. After Independence in 1960, perceived by farmers as the end of forced cotton cultivation, production declined to a hitherto record low level, but more than doubled on a yearly average during the second half of the 1960s, culmInating in 59,000 tons in 1969/70. This rapid production increase was due both to substantial improvements in yields and political pressure to grow cotton under the Bokassa regime. Yields per ha more than doubled between 1965 and 1970 because farmers increasingly observed the agricultural calendar and applied fertilizer and insecticides more systematically. The expanded use of animal traction in cotton cultivation during that period also helped increase yields. Between 1970 and 1980 cotton production fell by more than 50 percent because the area under cultivation was steadily shrinking and because average yields, already among the lowest in Africa, dropped from 441 kg/ha to 275 kg/ha, while tney reach 1,000 kg/ha in neighboring Camerooon under similar soil and climatic conditions.

45. The decline of cotton production in the 1970s and early 1980s was caused by a rapid deterioration of applied research, productivity programs and extension services following the "agrarian reform" in 1970, a significant decline of producer prices in real terms in the second half of the 1970s and an inefficient cotton marketing agency ("Societe Centrafricaine de D6veloppement Agricole", SOCADA). Created in 1980 as a mixed company and owned by the Government and a French company ("Companie Frangaise pour le - 19 -

Developpement des Fibres Textiles", CFDT), SOCADAhas been plagued from the beginning by serious mismanagement, overstaffing, excessively high productionand transportationcosts, and labor grievances, which resulted in large annualoperating deficits which had to be financed by expensive short-termbank credits. At the end of 1982, SOCADA'sdeficits had accumulated to CFAF 2.5 billion (US$7.4 million),or approximatelyone fifth of aggregateexport earningsfrom cotton during 1980-82. In many instances SOCADAfailed to collectthe cottonalready harvested because it lacked trucks,spare parts or gasoline. When the politicalturmoil in the late 1970s and early 1980s and pressureby oppositionparties on farmersnot to grow cottonwas added to these problems,production fell to a record low of 17,000tons in 1981/82.

46. In order to raise cottonproduction and its attractivenessto farmers, the Government has recently begun to imple-_nt comprehensive reforms. In 1982, it began to promote cotton and food crop productionwith an integratedrural developmentproject with financialassistance from the World Bank, France (FAC and CCCE), EuropeanDevelopment Fund (EDF),and the Arab Bank for EconomicDevelopment in Africa (BADEA). The projectconcen- trates on the most productivecotton zones and is expectedto reach some 61,000 farm famllies, or about one third of the cotton zone's total population, cultivatingsome 32,000ha of cottonaad 67.000ha of food crops. The cotton producerprice doubledin nominalterms between 1980 and 1985, while estimatedretail pricesappear to have risen by some 40Z over the same period,and the Governmentintends to periodicallyreview cotton producerprices in view of world market prices and productioncosts in the CAR. Since the Governmenthas also begun to graduallyreduce fertilizer subsidies,net producerprices may not be high enough to ensure adequate returnsper man-day to overcomethe farmers'hesitation to grow cottonin the medium- and long-terms. Measures to raise productivity (yields and returns per man-day) and improve marketing and extension services as well as living conditions in the cotton zone are therefore criticalfor the successof the Government'scotton program. SOCADA'soverhead costs have been reducedby suspendingseed-crushing operations, reducing the number of ginneriesfrom 18 to 5, and reducingboth the permanentand seasonallabor force. Other cost reducingmeasures include subcontracting cotton lint transportto the private sectorand replacingSOCADA's old vehiclefleet. Frenchfinancial assistance has enabled SOCADA to repay its accumulated debts and to recoverits initialworking capital. The combinedeffect of these measuresand the slightimprovement of world market prices for cotton in 1983 and 1984 have resultedin declininglosses and a profit in 1985, which enables SOCADAto contributeto agriculturaldevelopment expenditures.

47. As a result of thesemeasures, cotton production and yieldsmore than doubledfrom 22,600tons in 1980/81to 46,300tons in 1984/85,and from 276 kg/ha to 572 kg/ha,respectively.

48. Cottoncontributes only some 3% to value-addedin agriculture, about one percent to GDP and about 15Z to merchandiseexport earnings. Its importancefor the economylies in providingemployment to some 190,000 - 20 - families in the cotton zone. High international and domestic transportation costs and comparatively high overhead costs of SOCADA translate, however, into a producer price equivalent to only about one third of the cotton world market price and very low incomes for cotton farmers. Assum- ing average yields of 570 kg/ha, a family unit earns about 28,000 CFAF a year, or somewhat less than one fourth of the CAR's per capita income in 1984. Assuming that auto-consumption represents between half and two thirds of the farmer's total income, the latter varies between CFAF 40.000 and CFAF 75,000 a year on average, which is three to five times less than the industrial annual minimum wage income (SMIG). The tax burden (per capita tax and various other taxes), amounting to some 10% of total income and some 25% of monetary income, is very heavy given the low income levels. Farmers therefore devote the greater part of their time to hunting, fishing and food crops.

49. Coffee is the CAR's most important cash crop both in terms of value-added (56% of cash crop production) and foreign exchange earnings (about 25% of merchandise exports). It is cultivated in Eaute-Sangha and Lobaye in the southwest forest zone, and Basse Kotto and M'Bomou in the central south. Production has increased from 9,000-10,000 tons a year during the late 1960s to some 12,000 tons during the second half of the 1970s and reached a peak of 17,400 tons in 1982/83. Annual production varies significantly under the influence of climatic conditions, as during the 1983/84 drought, when output declined by 80Z compared to 1981 and 1982. Production consists almost entirely of high-quality Robusta, and no problems are incountered in selling total production to Europe, the largest share being absorbed by France.

50. Coffee is grown by some 47,000 smallholders (family plantations with about 160,000 people in total) on some 50,000 ha, and about 50 industrial estates. Smallholders account for approximately three quarters of total annual production, and their number has increased by roughly one third since 1978 reflecting the Government's policy to promote family production and fcrmers' response to strong producer price increases following the doubling of coffee world market prices in real terms in the second half of the 1970s. The number of estates which are predominantly operated by expatriates has been declining throughout the 1970s and aarly 1980s. Many plantation owners left the CAR in the wake of the "agrarian reform"' and because of labor shortages experienced in Haute-Sangha, when laborers became interested in diamond digging- in this area. In recent years, industrial producers have abandoned plantations because of difficulties in obtaining bank credits and also because of substantial losses due to thefts. Consequently, the share of total coffee production from industrial plantations has declined to about one quarter of total production. Planta- tion owners employ approximately 20,000 salaried workers, mostly on a part- time basis.

51. In spite of some applied research and technical assistance in the framework of foreign-financedprojects, yields have remained low. They amount to about 260 kg/ha on smallholdings and 400 kg/ha on plantations compared to a technical potential of 800 kg/ha. Unselected planting - 21 - material, traditional technology and poor extension services are responsible for the low yields.

52. Coffee is collected and marketed by private traders, cooperatives and, in some cases, exporters. Some 100 private licensed traders, half of whom are foreigners, collect about 80% of total annual coffee production. In the past, six cooperatives collected, as the smallholders'marketing associations, over 70% of coffee production. Because of poor management, a burdensome and expensive administration and long delays in payments to the farmers they have, however, degenerated into inefficient institutions under the control of the "Direction de l'Action Cooperative, de la Commercialisa- tion et du Credit Agricole" (DACCCA). Smallholders have therefore lost confidence in the cooperatives and increasingly turned to industrial plantations for processing their coffee. At present, cooperatives collect less than 20% of production, and during the 1983/84 harvest they collected only 524 tons of coffee compared to a combined processing capacity of 10,000 tons. Low capacity utilization, malfunctioning processing equipment and high personnel costs led to considerable operating deficits, and accumulated debts amounted to CFAF 400 million during 1978-84. Some 15 companies, two of which are dominant and recently also the Price Stabiliza- tion Fund ("Caisse de Stabilisation et de Perequation des Produits Agricoles", CAISTAB) export coffee mostly to France and other European countries. The CAR's coffee export quota amounts to 16,000 tons a year, and in years of low production considerable quantities from Cameroon are being reexported by the CAR.

53. Coffee prices ex-Bangui are fixed by means of a negotiated price scale ("barame") which determines transportation,insurance costs and fiscal duties, and is based nn daily coffee price quotations in Le Havre; producer prices are fixed by the 1Ministry of Commerce and Industry. The difference between the f.o.b. price in Bangui ("valeur nu-bascule a Bangui") and the actual producer floor price represents the commercial margin (and implicit taxation of the farmer) which is distributed between the national budget (60%) and CAISTAB (40%). During 1980-85, the prices paid by exporters for shelled coffee ("cafe marchand") in Bangui, which take into account domestic processing, marketing, and transportation costs, have averaged 46% of the export parity price in Bangui, which is equivalent to the world market price after international transportation,marketing, and insurance costs have been accounted for.

54. The Government's specific institutions for promoting coffee production consist of a coffee development agency ("Agence de Developpement de la Zone Cafeiare", ADECAF) and CAISTAB. Although ADECAF has succeeded in raising the number of smallholders, its promotional efforts have only led to modest improvements in output and yields. It supplies only small amounts of inputs -- about 73 tons of fertilizers and 60,000 liters of insecticides for a total cultivated area of about 50,000 ha in 1984 -- and large parts of its annual expenditures are spent on salaries, vehicles for functionaries and administrativebuildings rather than on measures in support of farmers. CAISTAB has been plagued with similar inefficiencies. In spite of substantial revenues from coffee exports which must have - 22 -

accumulated over the past years, only insignificant amounts have been spent on promoting coffee production and supporting smallholders.

55. Coffee production will continue to be an important source of income for the farmer, and of foreign exchange and fiscal revenue for the Government. The Government therefore intends to expand production considerably in the medium-term through promotion of family plantations and rehabilitation of some industrial plantations. The European Economic Community is expected to continue to support family coffee production in the eastern and Basse Kotto regions, and the African Development Bank in the western and central regions. In view of the low yields these projects are expected to emphasize research, improved production techniques and extension services in order to raise production.

56. In its efforts to raise coffee production, the Government should improve the coffee sector's performance by influencing the following three parameters: (i) pricing policy and taxation; (ii) production strategy; and (iii) institutions and marketing.

57. The heavy taxation of the coffee producer in the form of comparatively low producer prices has provided the Government (including CAISTAB) with very substantial fiscal revenues, and reflects the Government's prime concern with securing budgetary revenue. By pursuing maximization of fiscal revenues other objectives such as raising production, farmers' income and foreign exchange earnings have, however, been neglected. While it is correct to assume that higher producer prices would result in lower fiscal revenues in the short-term, the medium- and long-term effect of higher producer prices depends on the price elasticity of supply for coffee. In view of the fact that some plantations have been neglected and not been harvested for some time, and that cultivated surfaces and production could be increased rather easily, a comparatively high price elasticity can be assumed. A reduction in the implicit taxation by 50Z could result in a production increase of 70 or 80X in the medium-term, and farmers" incomes and foreign exchange earnings would increase accordingly. It is not possible to quantify the induced consumption or investment following the farmers' increased income, but it can be assumed that the farmers' propensity to consume is quite high, and that, at least initially, most if not all of the increased income would be consumed rather than invested. Eventually, however, farmers can be expected to invest in coffee production, since higher production, income, and consumption levels can only be achieved after yields per ha have been increased.

58. Coffee producers' high propensity to consume could be used as an argument in favor of relatively low producer prices and implicit high taxation, since it could be argued that the Government will use the tax revenues for investment and agricultural development rather than consumption purposes. Experience in the CAR has shown, however, that this is not the case, and that in fact most of the government revenues from coffee are used for current expenditures unrelated to development. Virtually all public investments, including agricultural projects, are financed by foreign aid. Even if all additional income transferred to - 23 -

coffee producers in the form of higher prices would be consumed, it could be assumed that it would have a greater impact on production and eventually investment than is the case with low producer prices and high implicit taxation. Furthermore, the state could encourage private savings and investment by supporting village communities and cofinancing schemes which would induce farmers to invest rather than consume. If successful, the need for foreign financing would be reduced and external debt service decline.

59. As regards production strategy, the Government favors the further expansion of smallholdings. While this strategy appears to have been successful in expanding production, it is less obvious that production could not have been expanded significantly faster had industrial planters not abandoned or neglected their estates. The Government's strategy therefore should be twofold, consisting of help in raising yields on simallholdings by an appropriate price policy combined with improved production techniques, and the preservation of industrial plantations, where yields are considerably higher than on smallholdings. In addition Central Africans should be trained to manage plantations if expatriates, for various reasons, find it unattractive to continue with coffee production.

60. Institutional and marketing reforms would have important impacts on the performance of the coffee sector. ADECAFand CAISTABshould be transformed into development agencies which support coffee production by providing _xtension services, inputs and disseminating research and price informati=n. CAISTABshould not be involved in coffee exports and instead concentrate on its price stabilization role. Cooperatives should become genuine producers t associations, management of which would have to be selected by the membership. If the coffee cooperatives cannotbe transformed into efficient units they should be abolished and be replaced by pre-cooperative groups ("Groupements d'Inter^ets Ruraux", GIR) which appear to have been operating successfully in recent years.

61. Tobacco is grown by smallholders in the southern part of the country. Traditionally the high-quality "de cape" tobacco, used for cigars and grown in the southwest (Haute-SanghafLobaye) subsidized the production of the uneconomical low-quality "de coupe" tobacco which was used for cigarettes and pipes and grown in the southeast (Basse Kotto and M'Bomou). Production increased from 800-900 tons a year in the 1960s to a peak of 2,700 tons in 1977, but began to decline in 1978 when the world harvest of oriental leaf tobacco reached a record level and two thirds of the CAR's harvest could not be sold. In the early 1980s, sold production of "de cape" tobacco averaged 730 tons a year, and production of "de coupe" tobacco has been stopped in 1983. During 1980-84 exports earnings from tobacco amounted to 3% of merchandise export earnings a year, compared to 6% during most of the 1970s. Tobacco growers are supported by the "Societe - 24 -

Centrafricainedes Tabacs" (SCAT)51 a mixed companywhich provides extensionservices and appliedresearch, and organizesthe collection, processing,and export of the tobacco. With its completevertical organizationand its relativeindependence from the Government,the company is probablythe most efficientagricultural development agency.

62. Livestock-raisingis a relativelyrecent economicactivity in the CAR, beginningsome 50 years ago with the immigrationof pastoralistsfrom Nigeria,Cameroon, and Chad. In the early 1980s value-addedhad been estimatedto amount to CFAF 6 billion,or about 16% of value-addedin agriculture. The Rinderpestvaccination campaign of 1983 resulted, however,in a more reliableestimation of the cattlepopulation: it varies from 1.9 millionhead in the rainy season to 2.2 millionhead in the dry season when cattle from Chad migrate in search of pasture in CAR.

63. This is double the earlierestimates and is causedby a permanent immigration of cattle from Chad and Cameroon, and the closure of the Nigerianmarket. It would also point to a much larger (14%) contribution of livestockto GDP and value-addedin agriculture(34Z). Cattleraising is concentratedin the northwestpart of the countryand is almost exclusively in the hands of 20,000pastoralist families (250,000 people) of the Fulani tribe. Farmers in the two northwesternprovinces of Ouham and Ouham-Pendeown cattle for animal traction (some 3,000 pairs) and farmers throughout the country own goats and chickens. The CAR is self-sufficient in red meat. The estimatedoff-take rate is approximately10-llX. Roughly 40% of the off-takeis consumedin the CAR and the rest is exportedto Cameroonand Nigeria. However,approximately the same number of slaughter cattle is imported each year from Sudan. Annual meat consumption has been estimatedat some 15 kg per capitawhich is about averagefor Central Africa. Milk productionis the primarygoal of day-to-dayherd management, since milk is used as a staple food and an important source of income by the Fulani. All officialslaughter is under the controlof the state-owned slaughterhouse corporation ("Societe d'Etat de Gestion des Abattoirs", SEGA) which administersthe recentlyconstructed slaughterhouse in Bangui with an annualcapacity of about 50,000animals currently operating at 70% of its capacity.

64. The Ministry of Rural Developmenp is in charge of promoting livestock raising through its Livestock Services and supervises the activities of the diagnostic laboratories in Bambari and Bouar, the National Livestock Technical College at Bouar, the slaughterhouses and its network of 250 extension agents. The Fulani producers are organized through the National Herders Association ("Association Nationale des Eleveurs Centra- fricains", ANEC), which is in charge of selling inputs to them. External donors including France, EDF, UNDP, the World Bank, and the African Devel- opment Bank have attempted to improve animal health services.

5/ Formerly, "Franco-Centrafricaine des Tabacs" (FCAT).

g - 25 -

AgriculturalInstitutions

65. The Ministryof Rural Developmentwith its varioussubdivisions and agencies is responsible for guiding and monitoring the country's overallagricultural development strategy, preparing and implementing sectoralpolicies, and allocatingdevelopment funds to the various agricultural projects. Althoughit has undergonefrequent reorganizations and changes in its missions,it fulfillsits role inadequately.It suffers from heavy overstaffing,lack of professionalcompetence, and a critical shortageof developmentfunds needed to supportagricultural projects. Its capacityto collectstatistical data, to prepareand implementpolicy measures,or to coordinatewithin the Ministryand betweenthe latterand the various agricultural develnpment agencies and institutions is particularly weak.

66. Present agricultural institutions are the result of a combination of past institutional developments, current sectoral policies, and the design of Individualdevelopment projects. They do not necessarilyreflect the Government's development objectives in agriculture though existing institutions and structures have increasingly been adjusted to new situations (SOCADA,for example) and new ones ("Agence Centrafricaine pour le DEveloppement de l'Ouham-Pende," ACADOP,for example) reflect more adequately sectoral or projectobjectives. In general, however, agricultural Inst.tutions tend to be overcentralized, respond only inadequately to the needs of their ultimate benef ciaries, and perform unsatisfactorily when measured by their declared objectives and purpose.

67. Before 1970. agricultural development was entrusted to Regional Development Offices ("Offices REgionaux de Developpement", ORD) vhich were responsible for extension services, commercialization and cooperatives. The Livestock Office ("Office de Developpement de 1'Elevage", ODEL) had similar functions for the livestock subsector. Following their dissolution in connection with the "agricultural reform" in 1970. the Ministry of Agriculture became responsible for extension services vhilb a national office, ONCPA(para. 42), was in charge of the commercialization of all agricultural products. The latter was, however, never substantially involved in cash crops, and was abolished in 1974 due to mismanagement, a shortage of funds to buy products, and lack of products offered to it. The 1970s saw also the emergence of vertical and horizontal (or regional) development agencies reflecting development approaches centered on cash crops exclusively (vertical), and those based on integrated siconomic and social development (horizontal). The tobacco and palm tree companies are examples of the vertical approach, and are in charge of all activities from production and transformation to commercialization. The coffee and cotton development agencies also concentrated originally on promoting only their respectivecash crops,but it soon became clear that they had to get involved in other aspects of rural life if they wanted to achieve their coffee or cottonproduction objectlves. In addition to promoting cash crops, they are thereforenow also responsiblefor supportingfood crop production and marketing, cooperatives and improving and maintaiuing the rural road network in their respective production zones. Other producer - 26 - organizations, such as ANEC, which at present performs relatively iimited tasks in the framework of the livestock projects, will be encouraged to participate more fully in designing and implementing development projects. The Government intends to continue to make use of these different types of agencies for developing agriculture and give them full administrative and financial autonomy. In order to make them efficient organizations their management, financial and technical performance and impact on development objectives will have to be closely monitored and improved, if necessary.

68. The Agricultural Prlce Stabilization Fund (CAISTAB) is the country's main rural financial intermediary. It is funded by taxes on export crops and is supposed to regulate and stabilize producer prices for export crops, monitor their quality and commercialization, and provide financial support to agricultural development projects. It is also responsible for applying international price stabilization and commercialization agreements in the CAR. In reality, few agricultural institutions play their role effectively and in accordance with their purposes. CAISTAB, for example, has unreasonably high overheads and at times appears to function primarily as an agricultural taxation device rather than a price stabilization agency. Its revenues from coffee exports appear to have been mostly used for purposes unrelated to promoting agricultural production, and its working mechanism appears to impede the expansion of coffee production through insufficient incentives in the form of low producer prices. Major Agricultural Developmet Constraints

69. The CAR"s agricultural development is being constrained by the following factors: (i) heavy taxation of the farmer and unfavorable terms of trade for the rural economy in general; (ii) excessive government intervention and regulation; (iii) low level of technology; (iv) narrow national market; and (v) inadequate training of the farmer. These factors reinforce each other and prevent farmers from producing significantly beyond their subsistence needs and result at times in malnutrition and food deficits in certain parts of the population.

70. The farmers' unfavorable terms of trade are most clearly reflected in the development of producer prices. In the past, producer prices tended to decline in real terms and had a negative impact on production. The average producer price for seed cotton, for example, only doubled from CFAF 29/kg to CFAF 59/kg between 1970 and 1980, whereas retail prices for sugar and rice quadrupled resulting in a significant decline in farmers' real income and disincentive to grow cotton. Coffee producer prices, already low by comparison with neighboring countries, declined in real terms during the late 1970s and again in the early 1980s after they had been improved in 1979/80 as a lagged response to the boom in world market prices in 1976/77. Official producer prices for food crops, conceived as min-imum prices but in reality applied as maximum prices when the Government succeeded in enforcing them, provided similar disincentives to food crop producers. Even when the Government does not succeeded in enforcing official food crop floor prices (as is mostly the case now), the farmer is faced with a marketing system of licensed buyers ("acheteurs agrees") which - 27 -

discourages competition;moreover, local authorities often pressure farmers to sell their produce to these buyers at official prices. Given the low agricultural productivity and the very low remuneration for his work, the farmer produces barely beyond his subsistence needs, or only enough to buy products of basic necessity or "luxury" products such as bicycles or radios. This attitude, reinforced by high prices of consumer goods, prevents the development of a market for goods and services which is a necessary condition for economic growth.

71. The Government's intervention in agricultural production and marketing in the form of regulating producer prices, levying a per capita tax, providing fertilizer and other inputs, restrictions on the free movement of commodities among regions and to Bangui. and deciding about the location of development projects without much involvement of the pcpulation groups concerned, has created a feeling of non-responsibility at the village level. The villages are hardly recognized as economic or administrative units, have little or no investment funds at their disposal, and have become dependent on the state and urban centers. The Government appears to be more interested in the transfer of resources from rural areas to the state level and the mechanical functioning of its administration rather than providing services to the rural population. The vertical structure of most development projects for which the Government has opted for practical reasons tends to reach only a limited spectrum of economic interactions, and large parts of the rural population are neither represented nor involved in the Government's development projects. The resulting demoralization is particularly evident and consequential with regard to women, because of the dominant role they traditionally play in agriculture in general and food supply in particular.

72. Agricultural output per farmer is very low. The two-principal export crops, coffee and cotton, have low yields relative to neighboring countries with similar climatic conditions. Although estimates of food crop yields, particular cassava, are extremely weak, they are also presumed to be low in view of the traditional technology used. The natural incentive to intensify production (raise output per hectare) is weak in most parts of the country due to low population density, the relative abundance of land, and the various disincentives and constraints to increasing productions, mentioned above.

73. The CAR's small market, its landlocked position, and inadequate internal road network also hamper the development of markets for agricultural surpluses. High international and domestic transport costs limit the transport of food crops to urban centers, reduce the profitability of export crops, and render consumer goods in rural areas expensive, especially since there is little competition among merchants. The virtual disappearance of consumer goods in rural areas in the late 1970s due to the lack of cash income and the complete dilapidation of the country-b infrastructure was only the extreme case of a general development problem for the CAR's agriculture.

74. As a consequence of the overstaff'ng of the Ministry of Rural Development, insufficient funds are available for supporting agricultural - 28 - development. Extension agents lack equipment, vehicles and demonstration material. But more importantly, they are not capable of teaching and assisting farmers in mastering modern agricultural techniques since they have not been trained in them. The curricula of agricultural training facilities and schools are not geared to the manpover needs of the CAR and do not take into account the predominantly rural character of its economy. Insecure and unqualified extension agents therefore limit themselves to policing and controlling farmers rather than assisting them in improving cultivation techniques and productivity. Farmers resent this situation and respond with disinterest or even boycott.

75. The degradation of rural living conditions, the lack of adequate health and educational facilities, and the shortage of investment funds at village levels needed to improve their situation has resulted in a disillu- sion of the young rural population and its exodus to Bangui and other urban areas. While living conditions and employment possibilities are by no means easy in urban centers, the latter at least offer to young Central Africans the hope of improving their situation. In contrast, the Govern- ment's long-standing neglect of the rural population's interest has offered little hope for change.

Agricultural Objectives, Policies, and Programs

76. The CAR's population has been projected to grow to 6 million people by the year 2017. some 2 million of which would live in rural and 4 million in urban areas. This implies that in 30 years each agriculturally productive person will have to feed four urban inhabitants compared to a ratio of one rural producer to somewhat less than one urban inhabitant today. Only a combination of policies which succeeds in very significantly increasing agricultural productivity, and reducing the rural exodus by making living conditions considerably more attractive can reverse this trend and achieve a more sustainable balance.

77. In general, the Government's present policies aim at increasing agricultural production and exports in order to guarantee food self- sufficiency and raise the farmers' and state's income. The Gover.nent's agricultural strategy is based on an integrated rural development approach, reliance on autonomous development agencies and public or mixed enterprises, and on commercialization by the private sector (except for cotton and tobacco) supported by cooperatives. Agricultural policies are being carried out with the help of development agencies (para. 67), improved training of agricultural staff and extension agents at project levels and regional training centers, marketing, price policy and agricultural research. Annual and medium-term production goals have been set for all major crops and diversificationefforts, another government objective, include the resumption of kenaf cultivation for the production of oags, the introduction of pepper, cacao, soja and vegetable production for domestic consumption and exports. Medium-term action programs for the 1980s include integrated development projects for cotton, coffee, livestock and for the wild life reservation regions in the north of the country (Bamingui- - 29 -

Bangoran and Vakaga), agro-industrial projects such as the palm oil project, and improved commercialization of various agricultural products.

78. Although the Government's agricultural development objectives are rather comprehensive in theory, progress towards achieving them has been one-sided. Government has been successful in increasing cotton production and exports with the help of a well-coordinated policy package (para. 47). Considerably less progress has, however, been achieved in such vital areas as food crop production and marketing, reorientation of agricultural training and improvement of extension services, rural living conditions or involving the rural population in decision-making about their own affairs and interests. Virtually no progress has been made towards reforming and restructuring the Ministry of Rural Development so that it would be in a position to respond to the rural population's needs.

79. In reaction to the poor services provided to the rural population by inefficient and wasteful government agencies, cooperative groups have become involved in the production and marketing of both food and cash crops, provision of tools and other input and distribution and sale of consumer goods in rural areas where regular commercial channels have been lacking. During the 1960s some 70 GIR cooperatives were set up but disappeared almost completely during the 1970s following the "agrarian reform" and the general deterioration in the economic environment. Since 1980, the Government has again been encouraging the formation of GIRs and their number had grown to 156 units by 1983. In recent years their members have marketed close to one fifth of cotton production for which SOCADA pays them a bonus.

Forestry

80. The forestry sector plays an important role in the CAR's economy. The dense semi-deciduous tropical forests in the southwest corner of the country and, to a smaller extent, to the northeast of Bangassou covering 3.4 million ha, or 5.5Z of the CAR's surface, are considered to be among the richest in Africa. Some 2.7 million hectares are exploitable but only about half of them have been inventoried so far. Besides sapelli, a particularly valuable species, the forests contain important concentrations of ayous and limba. In Sangha Economique, M'Baiki and Haute-Sangha, trees over 62 cm in diameter grow at a density of 20 to 45 ml/ha. In 1970, the Government estimated the potentially exploitable production volume at 87 million m3, some 75% of which are limba, aous and sapelli. In recent years, the latter two species have accounted for approximately four fifths of exploited volumes. Forest companies at present harvest about 15 m 3 per ha on average.

81. The forestry sector's contribution to GDP has accounted for approximately 3% in the late 1970s and early 1980s, or some 6-9% if the traditional part of the sector is included. The sector's contribution to the state budget amounts to somewhat more than one billion CFAF, or almost 3% of budgetary revenues. Over the past five years somewhat more than one fifth of the CAR's foreign exchange revenues has been earned by the - 30 - forestry sector. During the 1970s, direct employment in the sector has almost doubled and reached a peak of 4,300 persons in 1979, representing about one fifth of salaried employment in the modern sector outside public administration. Since then employment in the forestry sector has declined due to the closing of several companies and also increased productivity. In 1981, employment amounted to 3,400 persons or about 12% of salaried employment in the non-public modern sector. Employment in the sector is not expected to increase substantially over the next few years, since enterprises can handle a production increase with existingcapacities. According to a recent estimate, another 40,000 people benefit indirectly from the sector.

82. Modern forestry production dates from 1945 when several companies began producing timber for domestic consumption. Production developed slowly and averaged some 100,000 mS in logs in the early 1960s, but more than tripled between 1970 and 1980, with relative peaks of 399,000 e 3 and 369,000 m3 in 1973 and 1978, respectively. The production jump in the 1970s was caused not only by the favorable development of world timber prices, but also by a better knowledge of the forests and their production potential gained through pre-investment inventories, as well as by conces- sion agreements which stipulated, among other things, minimum production and processing levels. Timber exports commenced in the 1950s, but went mainly to Zaire; from the late 1960s on, logs were exported to Europe which buys 50-70% of the CAR's log production. Today virtually all logs produced are sold in Europe. Sawnwood production has averaged76,000 m 3 a year on average during the second half of the 1970s and in the early 1980s, of which somewhat less than half has been sold on the domestic market.

83. At present, eight private companies are operating in the CARand share a total concessioned area of almost 1 million ha, and individual concessions, usually granted for 15 years. vary between 17,000 and 173,000 ha. In addition,almost 500.000 ha are held in reserves by four companies. During the 1970s. the state was involved in wood production through public and mixed enterprises. These companies were often mismanaged, made heavy losses, or virtually ceased to operate. In accordance with its re- privatization policy, the Government recently withdrew from the mixed companies and sold the state company to a private entrepreneur. All companies are processing logs, two of them produce peeled and sliced veneer, and one also produces plywood. In 1984, of the total volume transformed, 85.7% was sawnwood, 2.2Z sliced and veneer,and 12.1% plywood.

84. High transportation costs raise significantly the f.o.b. sales price of wood originating in the CAR; transport costs account for roughly half of the sales price of red wood transported on barges, and for 42% if transported by floating rafts. Depending on the world market price. companies often experience losses amounting to about 30Z of the sales price Pointe-Noire (Congo). The cost/price relationship for sawnwood is markedly better, since transportation costs account for only about 30% of the average sales price for red wood. This explains in part the comparatively high percentage of wood processed in the CAR, which has risen from 67% in 1981 to 74% in 1984. - 31 -

85. Timber is also used in the traditional sector of the economy, mainly for the construction of pirogues (dugout canoes), firewood, and brick-making. In recent years consumption of firewood has been estimated at about 2 million m 3 a year assuming that the rural population (1.7 million) consumes about twice as much firewood as the urban population (0.7 million). Charcoal is also produced in an artisanal fashion mainly in forests close to large urban centers, and according to a recent study consumption of charcoal in Bangui amounts to about 12 tons a day. Produc- tion of pole wood has recently averaged about 200,000 ms a year.

86. On the domestic market prices for sawn lumber are fixed by the Government. Current prices hardly cover logging, transportation,and processing costs, and some companies would experience losses. Hence there are few incentives to supply the domestic market. It appears, however, that the officially determined prices are frequently not observed, and retail prices for both white and red wood often include profit margins ranging from 50 to 90% instead of the 12% profit margin included in the official prices. Information on domestic wood consumption is scarce, but it has been estimated that in 1980 apparent consumption amounted to about 3 3 77,000 m equivalent in logs or an an average of 117 m log equivalent per 1,000 persons, assuming that most of the wood is consumed in urban centers, or to 34 m 3 per 1,000 persons counting the total population.

87. The demand for tropical wood on the world market is expected to continue to increase during the 1980s, and timber (aapelli) prices have been projected to rise over the next ten years. The CAR's forestry production could be doubled compared to current production levels, provided transportation bottlenecks could be overcome and forestry administration strengthened. To this end, the Government intends to take policy measures aimed at raising the forestry sector's value-added, budgetary receipts, and foreign exchange earnings. They include: (i) a revision and simplification of the tax system; (ii) a revision of the forestry code with the aim of stimulating private investment, (iii) liberalization of domestic prices; and (iv) strengthening all aspects of forest administration, including a photographic forest inventory.

Mining

88. The CAR produces and exports diamonds and gold. Official diamond production has fallen from about 550,000 carats in the late 1960s to some 300,000 carats in the early 1980s. In recent years, export earnings from diamonds have stagnated around CFAF 8-9 billion a year, or almost 30% of merchandise exports, compared to 50% during most of the past two decades. Even at this reduced level, diamonds are today the CAR's most important source of foreign exchange earnings. In addition, a large portion of the production -- between 100,000 and 300,000 carats according to Government estimates - is exported illegally to avoid export taxes which had remained very high (20%) over many years. Tax revenues from official diamond production amounted to CFAF 1.5 billion in 1982, or 4.2% of total budgetary revenue. - 32 -

89. Diamond production takes place in alluvial fields in the eastern part of the country around Bria (Haute-Kotto) and in the west around Carnot (Haute-Sangha). No kimberlite pipes have been found to date. Diamond production by private foreign companies began in the early 1930s and remained in their hands until Independence. Production Increased from 70,000 carats in 1960 to 636,000 carats in 1968, more than 85% of which were produced by artisanal diggers, after the Government had opened up the diamond industry to artisanal diggers in 1961. Today, diamond production is dominated by 15-20,000 artisanal diggers who produce with very simple equipment about 90% of total production which they sell to some 120 middle- men called "collectors", 9 buying offices (6 of which are currently active) and 7 artisanal mining companies (5 of which are currently active); the latter account for the remaining production. None of the mining operations in the CAR is adequately organized or technically efficient. Compared to most other diamond-producing countries the CAR has a major advantage in the fact that roughly three quarters of its production has recently consisted of gem quality diamonds, the rest of industrial bort. The high value of the gems, the difficulty of maintaiuing security within widespread areas of the diamond fields, the CAR's vast and open borders, high export taxes (until recently) and weak government controls have led to the intensive smuggiing. Currency problems, which are often the main reason for diamond smuggling in countries with overvalued currencies, do not play a role in the CAR's unrecorded diamond exports.

90. Some 120 diamond collectors, about 10% of whom appear to be dominating the industry with individual capitals averaging about US$200,000, frequently provide artisanal diggers with basic equipment and also with food and consumer goods. The diggers find themselves often in a weak bargaining position because they have only limited knowledge of the value of diamonds or consumer goods. Buying offices have the right to buy diamonds directly from diggers but most of the domestic trade is handled by the collectors since the buying offices are not well represented in the diamond areas. Contrary to what might be expected, the large number of diamond buyers ("collectors", buying offices and artisanal companies) does not result in competitive diamond prices for artisans. On the contrary, the close relationship between diggers and "collectors" and the direct dependency of the former on the latter virtually excludes competition. The diggers receive lower prices per carat when the number of "collectors" increases since the latter tend to protect their overhead costs. This tends to raise further the sellers' temptation to deal outside official channels.

91. Almost all officially exported diamonds (about 97%) are exported in raw form. However, in 1964, the Government established a national diamond-cutting and polishing enterprise ("Comptoir National du Diamant", CND) in partnership with an American private company (the Government holds a 51% interest, the partner 49%). Tne initial target was to process 40,000 carats per year, but slow progress in training Central Africans in diamond cutting and CND's limited financial resources for buying raw stones have resulted in a processing volume of only 3,000-4,000 carats, or about one percent of official diamond production over the past few years. - 33 -

92. The Government is aware of the current inefficiencies and irregu- larities in the diamond sector and has taken several steps to revive diamond production and raise budgetary revenue from the industry. It has begun to revise the mining legislation which is expected to cover mining operations, marketing, taxation and control and security. The diamond export tax was reduced from 20% in 1983 to 14% in 1984 and 12% in 1985, and consequently official diamond production in 1984 increased by 14% in weight, and by 33% in value, about half of which is due to the production increase, and the other half to the appreciation of the US dollar against the CFA franc (15%) and increased diamond prices (2%). Two brigades of mining inspectors have been dispatched to the diamond areas but their efficiency has been very limited due to a shortage of vehicles, spare parts and fuel. An independent diamond evaluator is assisting the High Commission for Mining and Geology in evaluating diamonds and assessing the appropriate tax base, monitoring diamond prices on the domestic and international markets, designing production policies and implementing anti- smuggling measures.

93. Additional legislative, administrative and institutional changes and reforms in diamond production and marketing will be required if production is to expand significantly. In the past. artisanal production methods appear to have been given preference over industrial mining methods. Recently, the Government has chosen a more balanced approach by promoting industrial mining but allowing, at the same time and under certain conditions, artisanal diggers to continue to operate in areas concessioned to mining companies. In order to stimulate the interest of prospective investors, the High Commission for Mining and Geology has begun and should continue to give high priority to extracting and compiling the information on the diamond sector which has been accumulating in the country's archives over the years but has not yet been systematically evaluated.

94. Marketing procedures in the diamond sector should also be improved. In the medium-term, "collectors" should be gradually eliminated and substituted by buying agents controlled by the Government in order to facilitate control and improve prices paid to diggers. To the same end, buying offices should receive exclusive rights to acquire diamonds directly from diggers with the "collectors"'eligible to act as their subagents. Mining companies, however, should not be allowed to act as buyers since their function consists of prospecting and producing. The Government should also determine whether it is technically feasible and economically advisable to raise the perLentage of cut diamonds in total diamond exports through the national diamond cutting enterprise (CND). In order to achieve a marked improvement in the diamond sector, substantial additional technical expertise will be required. To what extent the Bank can be of assistance in these efforts is subject to ongoing discussions.

95. The CAR's other mining resources include gold, iron, uranium, and petroleum. Gold production has averaged about 60 kg during 1981-83 but rose to 236 kg in 1984 and 156 kg in the first five months of 1985, mainly due to the promotion of gold production with the help of a newly established gold-buying office. As in the case of diamonds, the volume of - 34 -

fraudulent exports is suspected to be substantial. Uranium has been found in the region of Bakouma (900 km northeast of Bangui), and reserves have been estimated at about 20,000 tons. High infrastructure and exploitation cost in a particularly isolated area and unfavorable world market prices have, however, rendered the project uneconomical. Iron is currently not exploited because production costs would be too high. A new feasibility study for cement production is underway.

96. Exploration for petroleum near the border with Chad has been going on since the late 1970s. A five-year exploration permit had been granted in 1973 to a consortium headed by Continental Oil Company CAR (CONOCO CAR) and SHELL Company. It was renewed in 1978 for another five years and a second time in 1983 for five years. EXXON, having replaced CONOCO as the lead operator, is expected to start drilling on a test basis during the 1985/86 dry season.

Manufacturing

97. Manufacturing, still in an embryonic development stage, accounts for about 6% of GDP and about half of total salaried employment in the modern sector. It comprises mainly processing of agricultural and forestry products, textiles, food and beverages, chemical products, footwear and assembly of bicycles, motorcycles and vehicles. In spite of the CAR's geographical development constraints, industrial production expanded slowly but steadily between 1967 and 1978 in line with rising agricultural production and forestry, which provided the monetary demand for manufactured output. During this period several new enterprises were established, many of which with government participation. A diamond-cuttingplant, textile factories, several forestry companies, a fruit juice company and a ciga- rette factory are examples of this "industrialization"policy by which the Government intended to complement agricultural production and promote the CAR's economic development. A car assembly plant (GACOA), also completed in 1978. was expected to export to neighboring countries, but has been producing at very low levels for the domestic market only. Between 1967 and 1977 overall industrial employment appears to have risen from 12,600 to 14,400 employees, or at a rate of about 1.3% a year which amounts to roughly one quarter of the average urban population growth rate during this period. Most of the additional employment in industry was due to increased wood production and processing. The latter was also mainly responsible for the increase in value-added which tripled between 1967 and 1977 in nominal terms. In 1977 the textile and wood-processing industries accounted for over half of total employment, value-added and investment in industry.

98. The decline of agricultural production and the CAR's economy in general in the late 1970s and early 1980s led to a stagnation or decline in manufactured output of most industries. Increased bottlenecks and transport difficulties on the CAR's international transport routes, a rapid deterioration of the domestic infrastructure, a shortage of spare parts and inputs and the decline of the population's monetary income curtailed industrial production. In addition, political instabilities and direct interference into the operations and misuse of enterprises' funds by - 35 - previous administrations resulted in a loss of confidence of the business community in the country and the departure of many foreign entrepreneurs. Virtually all manufacturing industries experienced significant production declines in 1979, and have been operating at very low capacity levels since. Production of sawnwood, footwear, textiles arndassembly of bicycles declined by more than 40% on average, output of unbleached textiles declined by some 42% in 1979 and textile enterprises suffered from the rapid fall in cotton production, which led to the closure of the two textile enterprises (ICAT and CIOT) in 1979. Shoe production (BATA) also declined sharply in 1979 and has continued to fall in the early 1980s; in 1982, shoe production reached only about half the level achieved in 1978. Beer plants and the factory producing aluminum household articles, for example, operated at levels well below half of their capacities. Since 1979 a few new enterprises have been created, old ones revitalized or existing ones expanded. A new beer plant began production in 1982. and SICPAD which produces flour, oil and soap had briefly resumed production in 1982. Other new ventures include a plastic footwear plant, a chemical plant for car batteries and the "Centre Agricole de Bangui" (CAB) which produces poultry and meat products. One of the closed textile factories (ICAT) has recently reopened.

99. The development of small- and medium-size enterprises in the CAR has been hampered by structural factors such as the country's landlocked position and small size of the market, its generally low level of development and the Government's inadequate policy measures regarding manufacturing. The countrv's small national market, its long distances to export markets and import sources represent the CAR's single most important obstacle to developing viable manufacturing industries. High international transportationcosts exclude an export-oriented industrial strategy. They provide, however, a certain protection for domestic industries, and the expansion of manufacturing output during the late 1960s and most of the 1970s appear to have been partly due to this natural protection. The comparatively strong growth in agriculture during this period and its decline in recent years are, however, the most important factors underlying the relative strength and weakness of industrial production over the past two decades. Import substitution has been only moderately successful because the small domestic market prevented the occurrence of economies of scale, wage costs are comparatively high, and the long and uncontrollable borders with neighboring countries facilitate unrecorded entry of goods into the CAR. Also, the collection of import duties has traditionally been very inefficient and in many cases prices of domestically produced industrial products are not competitive with those of imported products.

100. A second set of factors responsible for the rather weak industrial sector stems from the low level of economic integration between the various sectors and shortage of entrepreneurial talent. Industrial production of the CAR's small enterprises is geared directly to consumer demand, very little to supplying agricultural implements, and linkages between industrial activities are weak or nonexistent. Apart from processing cotton, coffee and timber, manufacturing in the CAR consists of industries which cater to the needs of low-income rural and urban population and - 36 - require comparatively little entrance capital and a low level of standard- ization. Almost all manufacturing enterprises are located in Bangui or close to it, because the capital provides the largest market and a minimal industrial infrastructure; it is also the national point of entry for imported inputs needed by manufacturing enterprises. The generally low level of managerial skills and lack of indigenous entrepreneurshipin the CAR has also been, as in many African countries, a major constraint on establishing industrial enterprises.

101. The Government's industrial policy often appears to aim primarily at the creation of employment without paying sufficient attention to the economic viability of enterprises. When textile and forestry companies, for example, experienced losses due to lack of demand or input supply problems in the late 1970s, the Government participated in their capital and management which intensified rather than alleviated both the enterprises' and the state's budgetary problems. Public enterprises, created in large numbers during the 1970s, also left little room for private enterprises and private investment declined. Other industrial complexes such as the sugar factory in Ouaka, the planned kenaf plant or the oil and flower plant (SICPAD), for example, are ventures which are not based on sound cost calculations and market analysis, and are not likely to operate on a profitable basis. The Government's concern with employment in sectors other than public administration is, of course, well justified. The CAR's obstacles to industrial development, listed above, make it. however, imperative that profitability considerations be given first priority in any industrial policy.

102. The Government's direct instruments to promote manufacturing and private foreign investment in the CAR consist of a public promoting agency, investment code and price policy. In 1977, the Government created a public office for the promotion of small- and medium-sized enterprises. The office had financial autonomy but was administrativelypart of the Ministry of Commerce and Industry. It lacked funds and its staff was insufficiently qualified to evaluate project proposals. Financial and technical assistance provided by the European Community and International Labour Organiza- tion was discontinued when it became obvious that local banks were not prepared to finance projects without government guarantees. In 1984, the office was dissolved and replaced by a similar office ("Centre d'Assistance aux PME Centrafricaines", CAPMEC) whose situation regarding its function, staff and problems appears, however, to have only marginally improved. The Government is currently trying, with assistance from UNDP/ILO and the World Bank, to give CAPMECan organizational structure more suited for promoting private enterprises in CAR.

103. Although the investment code is very liberal in providing tax incentives and customs duty exemptions for promoting foreign investment, it has in practice only inadequately played its intended role. The criteria according to which enterprises become eligible for public support -- investment amount, number of jobs created and "social" importance of activity -- are those applied in the UDEAC context, but they do not reflect the specific conditions of the CAR. National small-scale enterprises - 37 - usually do not meet these criteria and therefore do not qualify for tax benefits. The code does not promote reinvestment, rehabilitation or extension of existing facilities.

104. The cumbersome system of price regulations (paras. 27 and 28) tends to result in high prices and inefficient allocation of resources. The country's natural protection is therefore often negated by uncompetitive domestic prices which facilitates official and unrecorded imports of products from neighboring countries.

105. The CAR's membership in UDEAC provides it with an enlarged market, specialized economic development and harmonized tariffs and investment policies. The CAR's manufacturing enterprises thus have easy access to markets in neighboring UDEAC-member countries, but the constraints mentioned above appear to have outweighed this advantage.

106. A revitalization of industrial production in the CAR depends: (i) on a turnabout of agricultural production to sustained growth; and (ii) a small- and medium-size enterprise program which addresses directly the constraints the industrial sector has been facing. The recent political stabilization and resumption of growth in agriculture are expected to provide the needed support for resuming industrial production, expanding employment and raising value-added. Experience in other developing countries has shown that small industries depend highly on, and respond to, demand in rural markets. The Government's emphasis on agriculture in its overall development strategy is therefore, if it results in improved productivity and increased rural incomes, indirectly also the most efficient and least costly means to foster manufacturing production. Expanding agricultural production and incomes could, therefore, have a threefold impact on manufacturing: enterprises could provide much-needed agricultural implements, supply consumer goods to rural households, and generate domestic savings.

107. While a growing agricultural production is a necessary condition for revitalizing manufacturing in the CAR, two additional conditions are required for the latter's survival and careful expansion. First, the Government has to overcome its present inconsistencies in its industrial policy and agree on a strategy which realistically takes into account the CAR's present and future development constraints. Second, promotional policy measures should be guided by two overriding general principles: (i) very selective allocation of public resources in the form of public investment funds, current expenditures, or foregone budgetary revenues; and (ii) manufacturing itself and pricing of products should be left tc the private sector. The selection of industries deserving supporting policies and incentives should begin with an analysis of industries and enterprises which were operating successfully in the past. But enterprises should be revitalized only after their viability has been proven in light of present and future production and market conditions. The fact that an enterprise operated successfully in the past does not automatically mean that it can do so after many years of changes. SICPAD, for example, an enterprise which resumed production of vegetable oil and flour in 1981 after being out - 38 -

of operation for several years, is experiencing serious financial difficulties becauseproduction costs were underestimated,capacity utilization is considerablylower than anticipated,and becauseof input supply problems. The textileindustry, wood proedissing,footwear, beverages, mechanical repair,fabrication of simpleagricultural equipment, and food processing are among the industries which have the best potential to operate successfully. A systematictariff review for these and other domesticallymanu- facturedproducts should be undertaken with the aim of determining the degree of protectionand the economicviability of variousenterprises. Other complementarypolicy measures which coild help overcomeindustrial developmentconstraints include: (i) appropriateinvestment incentives; (ii) road infrastructureto rural markets; (iii) betterbanking and credit facilities;and (iv) educationprograms which focus on providinguniversal basic literacy,numerical and entrepreneurialskills.

Energy

108. Virtuallyall energyconsumed in privatehouseholds is generated by fuel wood from forestsand bushes. Electricityis being generatedby the country'swater resourcesand importedfuel. Over the past twenty years importsof petroleumproducts have more than doubled,reflecting both increasedmanufacturing and motorization.

109. Importand distributionof petroleumproducts is the responsibility of TOCAGES ("TotalCentrafricaine de Gestion"),a mixed companyin which the state (75%) and six French petroleum companies (25Z) share capital. The companyis managedby TOTAL which holds 5% of capital. In late 1983,TOCAGES absorbedCENTRA-RYDRO ("Centrafricaine d'Hydrocarbures") thereby replacing an arrangement by which TOCAGEShad bought the stock of CENTRA-HYDROand rented its equipment and material. Prices for petroleum products in the CAR are very high -- in 1983 the price of gasoline was equivalent to approximately US$4.80 per gallon. The substantial depreciation of the CFA franc vis-a-via the US dollar over the past three years has been compensated by a significant decline of the world market price for petroleumover the same period,with the result that in 1983 c.i.f. prices for petroleumpaid by TOCAGESwere close to those paid in 1981. Petroleum productsare comparativelyexpensive in the CAR becauseof long transportation routes,limited navigation periods of the OubanguiRiver and the monopolistic costing and pricingbehavior of TOCAGES. The comianyhas few incentives to reduce its operating costs in the CAR (accounting for about 20% of TOCAGES'turnover for all petroleum products combined), reduce importprices of petroleumbought on world markets (accounting for some 64% of the domesticprice) or the transport and transit costs in neighboring countries (accounting for about 16%). TOCAGES'operating costs in the CAR are very high, because the company is inefficieni. and overstaffed, but also because it bears high finance charges for reserve stocks. In neighboring Cameroon, for example, the personnel employed by the oil distributing company numbers less than half than that of its counterpart in the CAR, but distributesmore than three times the volume of petroleumproducts distributed by TOCAGES. TOCAGES'distribution costs, in particularurban delivery costs,are two to three times higher than in Cameroon or other African - 39 - countries. Since the OubanguiRiver is navigableonly from May/Juneto December,the CAR has to build up sufficientreserve stocks (approximately 40,000 ms in 1983)which entailfinancing costs amountingto about 20% of internaldistribution costs. While the buildingup of petroleumreserves is necessaryto reducethe CAR's vulnerability(and costs)with regardto petroleumsupplies, the size of the reservestock and its financingcosts are not independentfrom the reliabilityof the CAR's externaltransport routes.

110. The CAR is likely to be faced with comparativelyhigh hydrocarbon prices in the short- and medium-termfuture because of its landlocked positionand difficulttransport routes. A combinationof the geographical situation,of a singlepetroleum company, and a lack of transparencyin import prices,tariffs and practicesin the oil businessincrease, however, the risk toward inflatedhydrocarbon prices in the CAR. This risk and petroleumprices could be considerablyreduced if the Governmentand TOCAGESwould agree on a set of clearlydefined objectives which shouldbe based on a nationalenergy policy. TOCAGES'objectives would have to include: (i) provision of needed petroleum imports at least cost; (ii) productivitycriteria; and (iii) profitmargins which would be a function of cost-reducingefforts rather than allowingthe companyto make guaranteed profitscalculated as a percentageof the c.i.f.import costs of petroleumproducts in Bangui. Trainingand transferof knowledgeto CentralAfricans would also have to be statedexplicitly.

111. Electricityis providedby two hydroelectricplants in Boali, 80 .omfrom Bangui,with a total capacityof almost 19 MW and a thermalplant of 13 MW in Bangui. There are also eleven small thermal plants in the provinces with a total capacity of almost 34 MW, but Bangui,with approximately 17% of the total population,accounts for 99% of the country'selectricity consumption. Even in Bangui about 100 customersout of a total of some 6,200 customersaccount for roughlyhalf of all consumed electricity. Over the past four years, recordedelectricity consumption has averaged 51 million kwh which is equivalent to some three quarters of the production level. There appears to exist some excess production of electricity,but some of the electricityproduced is lost during transport or consumedwithout being paid for or recorded. ENERCA ("Societed'Energie Centrafricaine"),the public enterprisein charge of producingand distributingelectricity has rehabilitatedthe existingproduction capacity. In a secondphase the enterpriseintends to increasethe productioncapacity and then expand the distributionnetwork. Substantial tariff increasesin 1981 and 1983,a reductionin operatingcosts througha reductionin the number of employeesand financialand technicalassistance from France are expectedto financethe medium-termrehabilitation program amountingto some CFAF 5 billionover the next few years.

Transport

112. Internationaltransport routes. The CAR's internationaland domestictransport is influenced by three factors: (i) the country's - 40 - access to the ocean only through its neighboring countries Congo and Cameroon; (ii) low traffic density; and (iii) poorly functioning international transport chLins. Long transit delays in these chains combined with high transportation and insurance costs (amounting to up to 40% of total import costs) render imports ex3ensive and exports less competitive. Total transport costs for timber exports, for psample, are about four times higher than those from southern Congo, and two to three times higher than the average cost of rail transport for Cameroonian timber. Improved efficiency and reduction of transport costs on existing transport chains for the CAR's external trade of less than 300,000 tons a year, deserve therefore high priority.

113. The CAR is served by two major corridors to the sea: the Trans- Equatorial route to Pointe-Noire (Congo) and the Cameroonian route to Douala. In recent years more than four fifths of the CAR's foreign trade tonnage movea on the Trans-Equatorial route, almost one tenth on the Cameroonian route, and roughly 5Z by air. The Trans-Equatorial route is the least-cost route for bulky products such as timber, cotton, cement, and petroleum, and will remain so for the foreseeable future. The Cameroonian route is the preferred route for coffee exports and containerized imports of high intrinsic value. Air transport is used for high-value exports and imports, but will remain a minor transport mode.

114. River transport is restricted during some four months of low water levels on the Oubanguiriver and eight to nine months on some of the tributary rivers, Lobaye and Sangha. An additional constraint on the Oubangui river remains in the form of a physical obstacle at Zinga, located some 80 km downstream from Bangui: rocks in the river prevent the passage of convoys at water levels less than one meter during the low water season. During this period, barges coming from or going to Bangui must be lightened for travel north of Zinga and be reloaded at the Port of Zinga. Further breaching of the rock formation is not feasible, since the rock formation acts as a natural retainer dam, allowing navigation to occur at low water levels between Bangui and Zinga. A longer-term solution may be to develop the port of Zinga as CAR's main navigation terminal. Should this prove to be practicable, an all-weather road from Bangui to Zinga and some modernization of port infrastructure would be required. The Congolese part of the Trans-Equatorial route is managed by the "Agence Transcongolaise des Communications" (ATC) of which the railway, "Chemin de Per Congo-Ocean" (CFCO), from Brazzaville to Pointe-Noire forms a part. A shortage of locomotives, spare parts, and poor service by ATC have in the past resulted in long delays for CAR's transit traffic. Current efforts to realign the Congolese railway system, the addition of locomotives, and strengthening of ATC's management are expected to reduce significantly the railway's long turnaround times and contribute to a reduction in total transit time which may range upward of two months. Total freight costs between Bangui and Pointe-Noire range between CFAF 10,000 and CFAF 34,000 per ton/km depending on the type of commodities. Although relatively high for a river/rail combination they amount on average to about half of the transport costs on the Cameroonian route. But this advantage is partly offset by higher shipping charges in Pointe-Noire, higher financial and insurance charges - 41 - due to considerably longer transit time (16 to 26 days longer than on the Cameroonian route) and by the poor quality of service.

115. Until 1969, traffic on the Trans-Equatorial route was managed by private shipping companies and an interstate agency ("Agence Trans- equatoriale ces Communications", ATEC) jointly owned by Congo, CAR, Chad, and Gabon, which was in charge of maintaining the river system and the ports of Bangui, Brazzaville, and Pointe-Noire, as well as running the railway from Brazzaville to Pointe-Noire. In 1969, ATEC was nationalized and divided into two state enterprises: the ACCF ("Agence Centrafricaine de Communications Fluviales") in the CAR and ATC in Congo. Both companies performed very unsatisfactorily and operated at losses. Unfavorable river conditions, declining timber exports, and falling cotton transit traffic from Chad, and inefficient management led to a sharp decline in total tonnage transported by ACCF's fleet from almost 300,000 tons a year during 1970-75 to about 160,000 tons in 1979, and has recovered only to some 210,000 tons a year since then (combined traffic of Bangui, Zinga and Sangha ports, i.e. Nola and Jalo). Traffic in the port of Bangui alone with a capacity of 300,003 tons, which has accounted for more than two thirds of ACCF's total transported tonnage, declined by more than 50% during the 1970s. This, together with very high operating costs and virtually unrevised tariffs over many years, led to ever-increasing operating deficits resulting in severe financial difficulties - in spite of a rehabilitation and modernization program launched in 1975176 with financial and technical support from several foreign donors.

116. In 1980, the Government created -- in accordance with its stated policy of partial re-privatization of inefficient state enterprises - a mixed company, SOCATRAF (`Socift6 Centrafricaine de Transports Fluviaux") which is owned by the state (51Z) and other partners (49%), the most important of which is SAGA TRANSPORT, a French company. SOCATRAF is renting ACCF's fleet and equipment, but runs the latter's operations as a private company. Transport service and the new company's performance have improved significantly over the past few years. but operating costs have remained very high mainly because the contract between the state (ACCF) and SOCATRAF fails to provide for incentives for the latter to reduce operating costs. Also, ACCF continues to have annual operating costs of about CFAF 50 million, although it has stopped providing a real service since 1980. It should therefore be dissolved as an independent unit and be absorbed by SOCATRAF.

117. The Trans-Cameroonianroute provides two main options: (i) by road from Bangui to Douala via Bouar, Garoua Boulal, Bertoua and Yaounde (1,498 km); and (ii) by road from Bangui to Ngaoundere via Garoua Boulal, and from Ngaoundgr6 to Douala by rail (Trans-Africanroute, 1,807 km). Transit time by road ranges from two to four weeks, and by road/rail it may extend to two months due to waiting time for rail cars. Transport charges are about the same for both Cameroonian routes. Since the commodities transported via Douala have generally a higher value compared to those transported on the rivers, the relative value share of the Cameroonian corridor in the CAR's foreign trade is higher than its volume share. The - 42 -

Cameroonian route provides also a security for essential supplies when the Trans-Equatorial route is temporarily blocked.

118. In its desire to reduce the high transport costs via Cameroon, the Government envisages the construction of an additional road known as "route du quatrieme parallele" which would link Bangui with the port in Kribi (1,163 km) via Yamando, Nola and Yokadouma. Since the construction of this road requires work both on the Cameroonian and Central African side, and no bilateral accord has yet been reached, the Government has decided to build the road in progressive steps. As a first step, it plans to build the piece Boda-Bambio-Yamando (147 km) in order to open up the agricultural region around Bambio. Construction on a 20 km section of this piece has recently begun but no financing has yet been secured for the remaining 127 km. Rather than initiating construction of poorly justified new roads, the Government should concentrate on improving the existing transport chains, including the performance of the transport agencies in charge of managing foreign trade traffic.

119. A decision on the CAR's optimal international transport routes and most economical transport modes would have to be taken in the framework of a coordinated regional transport system encompassing the CAR, Congo, Cameroon, and Chad. This framework does not exist at present. The national transport policies need to take into account transit traffic from the CAR, and the CAR's transport policy has to take into account the traffic situation and policy of its neighbors. Decisions about how much of total traffic should be transported by river/rail or the roads, about tariff policy or forms of operational management cannot be made without making assumptions about the total expected transport volume in the region. The absence of a coordinated regional transport system tends to inflate the CAR's transport costs above the already high levels. By entrusting the river transport to a private operator the Government has established a basis for reducing the CAR's international transport costs. In order to achieve a significant reduction in transport costs, SOCATRAF's remuneration for delivered services should be made dependent not only on the total transported tonnage, but also on cost reductions actually achieved. Since the CAR's total international traffic is expected to increase only gradually with a slow economic recovery over the next few years, SOCATRAF's capacity is likely to be underutilized for some time.

120. Domestic transport. Domestic transport is handled predominantly by road. From east to west, the country is linked by the road from Yubu (on the border with Sudan) via Bangassou to Garoua-Boulat (on the border with Cameroon). The section between Bangassou and Garoua-BoulaI is part of the Trans-African Highway. From south to north, the country is linked with Chad by two minor roads. The classified road network consists of approximately 9,000 km of which only some 450 km are paved. The unclassified network (about 11,000 km) consists of feeder roads and earth tracks.

121. Bangui:is the focal point of the network, and traffic density and the level of development of the road network vary considerably throughout the country. Around the capital and in the Oubangui river area in general, - 43 - and also in the cotton areas in the northwestern part of the country, the roads are in better condition and traffic density is higher. Between Bangui and its suburb Yimbi, traffic amounts to about 2,100 vehicles per day while that between Bangui and the regional center of M'Baiki averages about 600 vehicles a day. On most other roads, however, traffic is excep- tionally modest, with fewer than 20 vehicles per day. At the end of 1981, some 4,500 private and commercial cars and about 5,500 trucks and buses had been registered in the CAR, which amounts to a motorization degree of 4.3 vehicles per 1,000 inhabitants compared to 11.4 cars in Cameroon with a total network roughly one third larger than that of the CAR. The domestic transport fleet appears to be sufficiently large to handle internal traffic, but the rather poor condition of vehicles and roads suggests that a larger number of comnercial vehicles will be needed once agricultural production has recovered from its current depressed levels. The CAR's transport capacity is sufficient, but there is increasing competition by the better organized Cameroonian commercial vehicles and trucks.

122. During the 1970s virtually no road maintenance took place, and in some areas roads are still in poor condition, but since 1980 the Government has been rehabilitating and maintaining a priority road network, and as a result, some 4,700 km of national and regional roads (or somewhat less than half of the maintainable network) are in good or very good condition. Regular road rehabilitation and maintenance was made possible through technical and financial assistance from foreign donors, including the Bank, and the creation of the Road Fund. The Fund is financed by a levy on motor fuels which has been increased over the past few years, but its sources (CFAF 1.3 billion in 1984 and CFAF 1.7 billion in 1985) have proven to be sufficient only for the most important roads; the CAR's very limited financial, technical and human resources do not permit a larger coverage of the road network which is spread over a large territory.

123. The international airport at Bangui, served by several international airlines, handles about 90% of total air traffic. The lengthening of the runway to accommodate Boeing 747 airplanes has recently been completed. Bangui is linked to Europe and other regional centers including N'Djamena, Brazzaville, and Kinshasa by regular passenger flights. The country has also eleven secondary airports which can accommodate the DC-4, fifteen tertiary airports which can accommodate the DC-3, and 14 public and twenty-two private airstrips accommodating light aircraft only, of which some twenty exist in the CAR. Although the country's geographic location, its scattered population, and the relatively high costs to build and maintain a road network should favor the development and operation of domestic air transport for both passengers and freight, the country's organizational capacity appears to be too weak to run a domestic airline. Following earlier unsuccessful attempts, the Government created in 1980 a new domestic airline, Inter-RCA, which operated two DC-3 and one Piper airplane. The company's airplanes are no longer operational, the airline is poorly managed and has virtually become defunct due to inefficient services and high operating costs. - 44 -

Education

124. The Central African Republic's school system is similar to that of other former French colonies in West Africa. It consists of six years of primary education and four years of lower-secondary education followed by three years of upper general secondary or technical education. These three years lead to the baccalaureate and entrance to institutions of higher learning, including the university. Special Institutions such as the Interprofessional Center for Vocational Training and Upgrading or vocational centers for agriculturalists prepare students for practical jobs in specific fields.

125. Over the past two decades the Central African Republic has succeeded in raising very significantly the number of students at all levels. Althoughthe speed at which new studentswere enrolledin primary schoolshas slowed down considerablyin recentyears (between2,500 and 3,000 new studentsper year in the late 1970s and early 1980s comparedto about 13,000new studentsa year during most of the 1960s),enrollments have been growing during the past ten years at average rates of more than 5% for primary education, 1OZ for lower secondary education, and almost 20% for upper-secondaryeducation. Enrollmentin primary educationhas risen twice as fast as the population,and in the lower-secondarycycle it almost doubled in the mid-1970s. In the 1980/81 school year, 246,174 (or 10Z of the total population) of the 384,000 children between the age of 6 and 11 were enrolled in primary schools, which amounts to an enrollment ratio of 64% for primary schools - one of the highest in West Africa. Access to technical schools has risen equally rapidly, and the number of university students has increased to 2,000 students in 1982 from 72 students in 1971 when the universitywas opened. TrheCAR spendsabout one fifth of its budget on education(25% of budgetaryrevenues in 1983).

126. The impressiveprogress in quantitativeterms cannot,however. concealthat the educationalsystem and policyhave failedto meet other importantobjectives. First, the administrationof the system is very weak, disorganizedand unable to ensure proper managementof personnel, facilities and equipment. Second, students are inadequately trained in subjects of their most likely employment, i.e., agriculture and technical fields. Approximately 95% of the studentsare pursuingdisciplines of general education with curricula which are too academic, especially in light of the widespread shortage of technically skilled workers. The shortage of students trained in practical fields continues to contribute to the very low productivity level in agriculture and small-scale industry. In order to make education more responsive to the CAR's needs, teaching materials and methods should be reoriented towards more practical and technical knowledge and skills. Third, the education budget has been unevenly distributed giving priority to higher-level education, and ne- glecting the lower, particularly the primary education level. As a consequence of the long-standing neglect of primary education and of expanding the student population more rapidly than educational funds, the educational quality in general and that of primary education in particular is very low. The past emphasis on secondary and higher education at the expense of - 45 -

primary education is also reflected in the trend of allocating both domestic and foreign funds to education: funds allocated to higher education increased from some 9% in 1974 to almost 21% in 1981, and in recent years most of the external funds available for capital expendituresin education went to secondary and higher education. More than 90% of the state's educational funds are spent on teachers' salaries and scholarships and less than 10X on teaching materials, construction, and maintenance of schools. In 1980, for example,only US$13,000were earmarkedfor buildingschools, which was not enough to build even one school. In primaryeducation teachingmaterial is hardly available,pupils lack even rudimentarysup- plies, schoolsare in poor condition,and teachersare often poorly trained to handle overcrowded classrooms (67 pupils on average). As a result, the quality of instruction has become very low, student attendance is declining, and drop-out rates are high (one fifth of students drop out at the end of the first year, and roughly half of the students abandon school by the end of the third grade). In 1980/81, the repetition rate in Grade 6 was 42%, and only 39% of the childrenpassed the examinationpermitting entry to lower-secondary education. The situation is more serious in rural areas where enrollment ratios are only half of those in Bangui and drop-out rates twice as high. Following the economic decline during the 1970s, rural areas were often left without consumer goods and regular communication with the capital, and teachers became even more reluctant to instruct in rural areas than is usually the case. The substantial increase in secondary school enrollments without commensurate increases in funding has also resulted in a decline of the quality in secondary education. Between 1973 and 1980, for example, the percentage of students who passed the final examination fell from 60Z to 39% of students in the final years of the lower-secondary schools (Grades 7-10) and from 44% to 36% of students in the final years of the upper-secondary schools (Grades 11-12). The teaching of mathematics and science has been affected more adversely than other subjects, because they require more materials and equipment.

127. The CAR's budgetary allocations on education are not likely to be increasedin real terms over the next few years. The fact that four fifths of educationalcapital expenditures are financed by external donors has made the Governmentconscious of the urgent need to improvethe qualityand efficiencyof the educationalsystem and to limit the automaticentrance of university graduates into the civil service. Based on the overallNational Action Plan, 1982-85, on a long-term educational development plan, and followingdiscussions with foreigndonors, the Government'seducational objectivesat presentaim at: (i) improvingprimary education in general and access to primaryschools in rural areas in particularby reallocating resources from secondary and higher education to primary education,by improvingteachers' qualifications, revising curricula, increasing the student/teacher ratio, orgAn-iing multi-grade teaching in rural areas and double-shift in cities, and building classrooms; (ii) improving the quality of technical education and vocational training; (iii) reducing educational costs by replacingexpensive expatriate teachers in secondary and higher educationby local teachersonce they have been appropriatelytrained; and (iv) developingthe Government'sadministrative and institutionalcapacity to plan and administerthe country'seducational system. To implement - 46 - these objectivesthe Governmenthas begun to build close to 500 new classrooms in rural areas, a primary teacher school in Bambari,a lower- secondary teacher college in Bangui, and four regionaleducation centers to train "in-service" primary teachers, and approximately 30 of the existing, but dilapidated sc,hools in rural areas will be rehabilitated over the next few years. Enrollment in secondary and higher education has been frozen, while that in primary schools is expected to increase at an annual rate of 5% a year. In order to integrate primary schools better into rural life, the Government has also prepared an education reform, formally adopted in May 1984. The main elementsof the reformwhich would be implementedunder the guidanceof the NationalPedagogical Institute are: (i) the National Language - Sangho - will be the teaching language for the two first years of the six-year primary cycle; (ii) the four-year lower secondary cycle will be professionallyoriented (prevocationaltraining); (iii) the first ten years (primary and lower secondary) will apply a practically-oriented curriculum, and include subjectsrelevant to villagelife; and (iv) only the best studentswill be allowedaccess to secondaryand higher education. The cost implicationsof the proposedreform have not yet been evaluated, but it is assumedthat the reconversionof all the lower secondaryschools into prevocationaltraining centers will be very expensive. Furtherwork will thus have to be done on the reform and the Government intends to associate the Bank and UNESCOin its efforts to promote a new and more effective education system. Future discussions are likely to focus on the best ways to: (i) reallocate to primary education and vocational training part of the funds used to finance expenditures in secondary and higher education; (ii) improve the administration and planning of the system; and (iii) reorient curricula to future employment possibilities.

V. RESOURCEMOBILIZATION AND ALLOCATION

Institutional Framework

128. The CAR's economic development has been guided only very loosely with the help of indicative development plans. Multi-year plans or investment programs have been prepared since 1948, but they have not been comprehensive and lacked macroeconomic and sectoral strategies and policies. Overall economic and sectoral growth objectives were seldom stated, and little effort was made to choose between developmental priorities or to show trade-offs and implications of development alternatives. Investment programs typically presented lists of projects to be implemented over specific periods. Their implementation rate tended to be low because the programs were too ambitious and projects were included in development programs with no appropriate financing in sight. Moreover, since virtually all investment is financed by external sources, Central Africans were little involved in the initiation of development activities, and therefore acquired the necessary skills only slowly.

129. There seems to be no institutionalized procedureon how to determinenational development priorities; sectoral or projectpriorities tend to be set through a collective osmosis from individual ministries, the - 47 -

High Commission for Planning, the Presidency, external private investors, and official financing agencies. Even after the adoption of an investment plan by the Council of Ministers, substantial deviations from it are not uncommon. The High Commission for Planning has overall responsibility for economic planning, preparing, and monitoring investment projects, but it can only inadequately play its coordination role because of its limited knowledge regarding the preparation and implementation status of projects, reflecting poor cooperation from the individual ministries. The performance of routine administrative tasks has greatly improved since the end of the Bokassa regime, and a certain degree of investment implementation capacity has been restored, but specific shortcomings remain:

(a) civil servants are frequently moved from one ministry or position to another, and high-level officials rarely remain in the same position for an extended period of time. In anticipation of the frequent transfers, officials show little interest in acquiring the required knowledge and skills, and they tend to be unfamiliar with their respective fields of responsibility and job require- ments;

(b) the political and administrative responsibility of individual ministries and public offices in many cases has not been clearly defined, and their mandates change or overlap as a result of frequent changes in the ministries' leadership. Management of the parapublic sector, for example, has until recently been under the responsibilities of the Ministry of Industry and Commerce, a special office for monitoring and rehabilitating public enterprises and a competing office in the Presidency; and

(c) almost all high-level civil servants travel extensively abroad which frustrates coordinated decision-making. The uneconomical use of civil servants aggravates the problem of very scarce skilled cadres, increases the need for expensive expatriate technical assistance personnel, the impact of whom is often greatly reduced by the described practices in public administration.

Investment Plans and Financing

130. The CAR's public investments have traditionally been financed by external sources. The budget does not contain investments financed by foreign funds and therefore does not shape the level or composition of the investment program. Capital expenditure listed in the budget represent only the Government's minimal contribution to externally-financedprojects.

131. After Independence, governments were not prepared for development planning and experimented with short-term plans (Preliminary Investment Plan 1960-62 and Interim Development Plan 1965-66), before they returned to Four- and Five-Year Plans at the end of the 1960s and throughout the 1970s. The two investment plans covering the period between 1971 and 1980 foresaw that somewhat less than one quarter of public investment funds would be - 48 - allocated to agr4:ulture, about one fifth to industry, and the rest to infrastructure and social affairs. In reality. however, agriculture received only 17% of actual total public investment expenditures. Industry's share amounted to 33% reflecting the industrializationpolicy pursued during the 1970s (Appendix, Table SA 40). Plan implementation ratios were generally low during the 1960s, but increased significantly during the 1970s, which appears to be due to somewhat more realistic investment programs, and also to the fact that industry's share in total actual investment expenditure had increased.

132. The governments following the Bokassa regime have correctly defined rehabilitation of the agricultural sector, reconstruction and maintenance of a priority road network, strengthening education, and redressing the large fiscal imbalances as the most urgent development priorities. The two short-term plans which have been enacted since 1980 (Reconstruction Plan, 1980-81 and National Action Program, 1982-85), reflect these priorities. Between 1980 and 1984, investments in rural development accounted for almost 302 of total investment, infrastructure for 38%, industry for 24%, and education, health and other social sectors for 8% (Table 5.1). Recently agriculture's share in total investment has been increasing because preparation and implementation of projects has been improving. The relatively large investments in infrastructure in the early 1980s are due to substantial reconstruction of the road network much of which in support of agriculture. Industry's relatively high share is due to the rehabilitation of the electricity supply system. - 49 -

Table 5.1: CAR - Investment Program, 1980-85 1/

(in millions of current CFAF)

------Actual ------Proj. 1980 % 1981 ' 1982 % 1983 % 1984 v 1985 '

Rural Development

Agriculture 1,663 3,062 2,795 6,109 9,629 13,495 Livestock 457 633 532 788 883 1,463 Fish Breeding 141 315 411 408 264 126 Forestry 470 652 1.045 646 524 715

Sub-Total 2,731 23 4,662 28 4,783 27 7,951 28 11,300 37 15,799 35 Industry

Mines & Geology 550 1,796 3,175 1,511 437 630 Manufacturing 2,609 2,659 971 1,933 2,225 4,506 Energy & Water 90 180 1,330 1,268 1,185 3,291 Tourism 85 154 107 426 439 657 Sub-Total : 3,334 28 4,789 29 5,583 32 5,138 18 4,286 14 9,084 20 Infrastructure

Road Network 4,810 4,045 3,385 7,656 9,382 10,173 River Transport 625 465 942 - 12 12 Air Transport 75 125 90 970 1,161 453 Transport - - - 1,538 637 304 Telecommunications 10 730 812 1,368 522 3.149

Sub-Total : 5,520 47 5,365 33 5,229 30 11,532 40 11,714 38 14,091 31

Social Affairs

Urban Development - 180 20 - - - Educational Investments 151 378 1,209 1,346 1,597 1,139 Public Health 98 642 664 1,972 681 2,962 PublicAdministration - 475 - 635 1.335 2.327

Sub-Total : 249 2 1,675 10 1,893 U 3,953 14 3,613 12 6,428 14 TOTAL RECORDED INVESDTENT 11,834 100 16,491 100 17,488 100 28,574 100 30,913 100 45,402 100

1/ Technical assistance not directly related to investment projects excluded. Contains some but not all private investments.

Source: Statistical Appendix, Table SA 38.

Public Finance

133. The CAR's centralized public finance system comprises the central government, local authorities ("prefectures" and communities), autonomous agencies, and state enterprises. Local authoritiesreceive virtually all their resources from earmarked central government revenue. Central - 50 - government operations include the Treasury, the Public Debt Agency ("Caisse Autonome d'Amortissement des Dettes de 1'Etat", CAADE), the Recovery Fund ("Fonds de Relance") and the Road Fund ("Ponds Routiers"). The CAADE receives Its funds for public,domestic and foreigndebt servicingfrom earmarked taxes on diamond exports and beer consumption and also from budgetary transfers; the Recovery Fund and the Road Fund from taxes on gasolineconsumption. The Treasury'sliquid assets are depositedwith the CentralBank, and the total of short- and medium-termadvances of the banking systemto the Treasury is limited to a BEACstatutory ceiling of 20% of the precedingyear's domesticbudgetary receipts.

134. The level and the structureof budgetaryrevenues and expenditures are similarto other countriesat comparabledevelopment stages. Budgetaryrevenues, averaging about 14% of GDP, consistof importduties, internalturnover taxes, and payrolltaxes; income taxes on both companies and individuals are only of minor importance. During the 1970s and early 1980s tax revenues have averaged more than 95% of budgetary revenues, with taxes on international trade (close to 40%), on goods and services, and on incomeand profits (about21% each) accountingfor the bulk of budgetary revenue. Importduties have accountedfor well over one third of tax revenue. Budgetaryexpenditures have averagedsomewhat less than one fifth of GDP; they have, however,declined significantly from 25% of GDP during the early 1970s to around 18% during the late 1970s and early 1980s,due mainly to a reductionof the Government'scontribution to investments, arrearsin interestpayments on the public debt and a stabilizationof transferpayments. The Government'srecent success in controllingsalary paymentsin the civil servicehas furtherreduced budgetary expenditure to about 15% of GDP in 1984 and 1985. Currentexpenditures have traditionally accounted for over 90% of total budgetary expenditure leaving only minimal amounts for domestic contributions to developmental outlays. - 51 -

Table 5.2:'CAR - Fiscal Developments,1971-85 (in billions of current CFAF)

Annual Average est. proj. 1971-75 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

1. Budgetary Revenue 11.7 13.6 16.8 17.8 20.1 21.7 24.9 35.8 36.2 39.6 42.4

Tax Revenue 11.2 13.0 16.0 17.0 19.3 20.9 23.2 30.8 30.9 33.2 36.4 Taxes on InternationalTrade 4.2 4.9 6.8 7.1 8.8 10.5 11.6 12.8 13.5 14.5 15.7 Taxes on Goods & Services 2.8 3.4 4.0 3.5 4.1 4.2 4.8 7.8 7.4 7.9 8.8 Taxes on Net Income & Profits 2.7 3.0 3.3 3.9 4.0 4.1 4.5 7.4 7.0 7.5 8.2 Other Taxes 1.5 1.7 1.9 2.5 2.4 2.1 2.3 2.8 3.0 3.3 3.7 Non-Tax Revenue 0.5 0.6 0.8 0.8 0.8 0.8 1.7 5.0 5.3 6.4 6.0 2. Current Expenditure 14.3 17.6 21.0 22.7 27.4 29.4 32.9 37.4 39.4 37.0 38.5

Wages & Salaries 7.7 10.8 12.7 12.6 17.2 18.7 21.7 23.7 23.9 23.4 23.8 Materials & Supplies 3.5 3.8 4.6 4.6 7.2 6.8 6.6 6.7 7.4 5.4 6.2 Scheduled Interest Payments 0.7 0.9 1.0 2.9 0.9 1.0 1.0 2.9 3.3 3.4 4.5 Transfers & Subsidies 2.4 2.1 2.7. 2.6 2.1 2.9 3.6 4.1 4.8 4.8 4.0

3. Current Surplus/Deficit -2.6 -4.0 -4.2 -4.9 -7.3 -7.7 -8.0 -1.6 -3.2 2.6 3.9

4. Capital Expenditure a/ 1.6 1.3 1.9 2.2 0.5 1.0 2.2 2.7 3.8 2.7 4.6

5. Budgetary Expenditure (2+4) 15.9 18.9 22.9 24.9 27.9 30.4 35.1 40.1 43.2 39.7 43.1

6. Overall BudRetarv -Surplus/Deficit -4.2 -5.3 -6.1 -7.1 -7.8 -8.7 -10.2 -4.3 -7.0 -0.1 -0.7

7. Financing 4.2 5.3 6.1 7.1 7.8 8.7 10.2 4.3 7.0 0.1 0.7 Domestic 1.3 0.3 0.4 2.3 0.4 0.6 4.1 -1.5 2.1 0.8 2.2 Foreign (net) 1.4 2.1 3.2 1.6 7.1 7.5 8.8 5.6 4.0 3.1 0.5 of which Grants (1.0) (1.8) (1.6) (1.0) (5.8) (7.4) (5.6) (5.0) (3.4) (3.5) (3.5) Arrears 1.5 2.9 2.5 3.2 0.3 0.6 -2.7 0.2 0.9 -3.8 -2.0

a/ Investments financed by foreign sources excluded.

Source: Central African authorities. - 52 -

Table 5.3: CAR - Fiscal Performance Indicators, 1971-85

(in percent)

Annual Average est. proj. 1971-75 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

1. Relation to GDP

Budgetary Revenue 18.4 12.7 13.6 13.1 13.3 12.9 13.2 16.5 15.7 15.2 14.6 Tax Revenue 17.6 12.1 13.0 12.5 12.8 12.4 12.3 14.2 13.4 12.8 12.5 Budgetary Expenditure 25.0 17.7 18.5 18.3 18.5 18.1 18.6 18.5 18.8 15.3 14.8 Current Expenditure 22.5 16.4 17.0 16.7 18.2 17.5 17.4 17.3 17.1 14.2 13.2 Wages & Salaries 12.1 10.1 10.3 9.2 11.4 11.4 11.5 10.9 10.4 9.0 8.2 Capital Expenditure 2.5 1.2 1.5 1.6 0.3 0.6 1.2 1.2 1.7 1.0 1.6 Current SurpluasDeficit -4.1 -3.7 -3.4 -3.6 -4.8 -4.6 -4.2 -0.7 -1.4 1.0 1.3 Budgetary Surplus/Deficit 6.6 5.0 4.9 5.2 5.2 5.2 5.4 2.0 3.0 0.04 0.2

2. Relation to Expenditure & Revenue

Curr.Expend.|Budg.Expend. 89.9 93.1 91.7 91.2 98.2 96.7 93.7 93.3 91.2 93.2 89.3 Capital Expend./Budg.Expend. 10.1 6.9 8.3 8.8 1.8 3.3 6.3 6.7 8.8 6.8 10.7 Capital Expend.IBudg.Revenue 13.7 9.6 11.3 12.4 2.5 4.6 8.8 7.5 10.5 6.8 10.8 Wages & Salaries/Budg.Expend. 48.4 57.1 55.5 50.6 61.6 61.5 61.8 59.1 55.3 58.9 55.2 Wages & Salaries/Curr.Expend. 53.8 61.4 60.5 55.5 62.8 63.6 66.0 63.4 60.7 63.2 61.8 Wages & Salaries/Budg.Revenue 65.8 79.4 75.6 70.8 85.6 86.2 87.1 66.2 66.0 59.1 56.1 Budg.RevenuetCurr.Expend. 81.8 77.3 80.0 78.4 73.4 73.8 75.7 95.7 91.9 107.0 110.1

1971-75 1976-79 1970-79 1980-85 1976-85 3. Annual Growth Rates

Budgetary Revenue 4.8 13.9 8.9 14.3 13.5 Budgetary Expenditure 7.4 13.8 10.7 7.2 9.6 Wages & Salaries 11.3 16.8 13.3 4.9 9.2

Source: Central African authorities.

135. Budgetary deficits which have declined from 5X of GDP during the secondhalf of the 1970sto 3% during 1980-84are the resultof both insufficientrevenue collection and excessivegovernment recurrent spending. In fact, between 1970 and 1978 tax revenuesincreased at an annual averagerate of only 8.72 comparedto an annual nominalGDP growth of 13.42. The weak revenueperformance reflects lax enforcingof existing taxes, a lack of new tax measures, and a generous system of tax incentives. Although the CAR's system of withholding taxes on wages and salaries and the purchase tax as a means of withholding business income tax provide a basis for proper identification of taxpayers, there are strong indications that taxpayeridentification is not carriedout vigorously. Tax statistics and accountingprocedures are inadequateand render controland cross- checkingdifficult. Severalattempts to survey real estate or to reassess taxablebases of old buildingscould rot be completed. But even when identified,taxpayers are seldom put under pressureto fulfilltheir tax - 53 - obligations. The taxation of civil servants' incomes has been very low during the 1970s averaging less than 6% on average. A change in the taxation system towards a progressive system, as applied in many other developing countries, would not only result in a more equitable distributionof the tax burden,but it would also generateadditional tax revenue.

136. Throughoutthe 1970s currentexpenditures rose faster than budgetaryrevenues, and coverageof currentexpenditure by budgetary revenue declinedfrom about 90% on averageduring the late 1960s and early 1970s to 75% during 1978-81. Trends in budgetaryexpenditures have reflected two important phenomena: (i) the rapid growth in employment in the civil service throughoutthe 1970s; (ii) and substantialsalary increases between 1979 and 1982. The near-doublingin the number of civil servants from 14,000to 26,000between 1967-1978was accompaniedby a triplingof the wage bill in nominal terms. This increasereflects both the long- standingpolicy of employingalmost automaticallycollege and university graduates and the disappearance of employment opportunities in the private sector. Since 1979, the wage bill has again almost doubled (excluding public enterprises)because the post-Bokassagovernments granted substantial wage increaseswhich were consideredto be justified,since only marginalor no salaryadjustments had been awardedduring 1976-78. The share of civil servants' salaries in current expenditures has risen from approximately 542 during 1971-75 to 64% during 1979-82.

137. Since 1982, the Governmenthas drasticallyreduced budgetary deficits and virtually balanced the budget in 1984 (Table 5.2) due both to increasedrevenues and expenditurecontrol. Budgetaryrevenues rose by almost 44% in 1982 and nearly doubledbetween 1980 and 1985 due to several tax increases,a reductionof customsduty exemptionsand a strengthened tax collection. A surchargetax had been levied on civil servants' salariesin 1982 and 1983, and in 1984 the Governmentbegan to implementa tax reformwhich had been proposedby the IMF in 1977. On the expenditure side, the Government'sefforts have been even more impressive. In 1983, the number of civil servantswas reducedby 340 (net basis) and as of 1984 recruitmentinto the civil serviceis to take place on the basis of competitiveexams for universitygraduates. Moreover,recruitment of civil servantsis to be allowedonly on conditionthat the projectedincrease in salary paymentsresulting from such recruitmentdoes not exceedone third of the savingsresulting from prior reductionsin the number of civil servants. Since 1982, salarypayments have been stabilizedin nominal terms and declinedin real terms, and accountedon averagefor 64% of budgetaryrevenue during 1982-84compared to 86% during 1979-81. Conse- quently, a slight surplus has been achieved in the current budget in 1984.

ParapublicSector

138. Public or mixed enterprises have been prevalent in many sectors of the CAR's modera economy. Following Independence and especially during Bokassa's regime public enterprises were created in large numbers, because it was felt that industrializationcould be better advancedif enterprises - 54 - were under the state's full control. Creation of employment, in particular, was thought to be best achieved through public enterprises. While both objectives appeared to have been promoted for a few years during the 1970s, it has become obvious that only very l-iited success has been achieved in genuinely expanding industrial production and employment. The CAR's shortage of entrepreneurial skills, the neglect of productivity considerations and concurrent deterioration of the state's public finances resulted in the collapse of most public enterprises at the end of the 1973s. The heavy deficits and accumulated debts represent now a major obstacle to the country's reconstruction efforts. In 1983 and 1984, the number of employees in public enterprises has been reduced but further reductions are needed in order to alleviate the drain on the budget. Public enterprises not only absorb local entrepreneurs without using fully their skills, but they also prevent private domestic and foreign entrepreneurs from playing their proper role. The declining share of private in total investment from the late 1960s to the late 1970s is a reflection of the state's misguided industrial policy. - 55 -

Table 5.4: CAR- ParapublicSector, 1983

No. of State Wage Total Profit Value Enter- }nter- Mixed Public Bill Revenue /Loss Added prises prises Enterprises Offices ^playees - ll ------

Transport 4 ACCF BARC 598 929 1,354 32 1,362 SOCAtAF IN-RCA

Enersy 2 ENERCA TOCAGES 1,006 1,405 17,727 -82 3,758

Mines& Industry 9 ICA CENTRACUIR 782 827 3,969 -543- 1,006 SEGA CICI SNE CND MANUCACIC URCA SICPAD

bRriculture 7 CENTRAPALMCAROMBOIS ACADOP 1,633 2,088 6,033 -1,181U ,300 tinciuding (SOCEFI)1/CENIRAGRO ADECAF forestry) SCkT SOCADA

Comerce & Hotels 2 LCA SCET-SAFARI 12 10 14 9

Finances & Banks 3 (BNCD)1/ (BCI)1/ 437 1,207 4,526 -537 1,578 UBAC BIAO BCAD

------

Services 4 SIRIRI OCAZOUR OCPT 1,217 1,227 1,479 -3,862 796 SOCAU

ITOAL 31 11 20 3 5,673 7,695 35,104 -6,157 11,809

1/ Inoperative and in liquidation. Source: Central African authorities. i 139. The inadequate relationship between the state mid the parapublic sector and the severe restriction of public enterprises' autonomy have been a major sourceof public enterprises'mismanagement and malfunctioning. Originally,a 1963 law foresawthat enterpriseswould operateunder state control (ntutelage"), but that enterprise managers would be in charge of - 56 - the daily operations. In reality, however, state controllers do not exist and the supervising ministers frequently interfere in enterprises' daily operations as presidents of the board of directors or in similar capacities. The High Commission for Public and Mixed Enterprises should address these problems and develop a uTnified policy and approach for the enterprises and their respective supervising ministries. Middle- and high- level managers are usually nominated by the supervising ministry, which also controls all financial activities with the help of financial controllers on the enterprises' payrolls. In many cases managers are civil servants who have been detached from the various ministries, and enterprises are often managed by applying purely administrative principles suitable to public offices rather than economic and financial performance criteria. In order to enable public enterprises to attract qualified personnel and as a precondition for high-level performance, it is essential that their general directors be given the right and power to choose among the candi- dates for the various posts presented to them by the Government, and that they have the right to reject a candidate if his qualifications and experience are inadequate with regard to the post to be filled.

140. In the early 1980s, the parapublic sector comprised 14 public, 21 mixed enterprises, and 17 public offices (Appendix, Table SA 29). Out of these 52 enterprises and offices several mixed enterprises have only very small state participation, others have been dissolved, and 10 public offices have an administrative rather than productive character, so that the 34 remaining enterprises and offices constitute in reality the parapublic sector (Table 5.4). In 1983, their total revenue has been estimated at some CFAF 35.0 billion and their value-added amounted to about 5Z of GDP. The sector's total losses in that year have been estimated at roughly CFAF 6 billion, or 17Z of budgetary revenue. Employment in the parapublic sector amounts to somewhat less than one fifth of total employment in the modern sector, or some 20% of employment in the civil service. On average, the ratio of "cadres" to workers is considerably higher in the public than in the private sector (6.1% compared to 3.7%), and there are significantly fewer expatriates in public and mixed than in private enterprises (ratio of one expatriate "cadre" to four nationals compared to a ratio of three to two in the private sector). The 11 State Enterprises have registered the biggest operating loss (estimated at some 20% of their revenue), while the two other groups have nearly balanced their operating accounts or made a small profit. Public offices with an industrial and commercial character have registered profits mainly because the Social Security Office's ("Of- fice Centrafricain de Securite Sociale", OCCS) income surpasses its payments.

141. Since 1980, governments have begun rehabilitating the parapublic sector by redefining the function of public and mixed enterprises in the economy so that government intervention would be strictly limited to enterprises considered to be strategic such as postal and telecommunications services, mining, energy, and water resources, to large industrial and agricultural projects, and to areas where private initiative is lacking or insufficient. The Government's rehabilitation program for public and mixed enterprises aims at full or partial re-privatization of enterprises - 57 - whose activities should be performed by private entrepreneurs, liquidation of nonviable enterprises, and return to financial stability and elimination of subsidies of those enterprises which appear to be able to survive. Several public and mixed enterprises such as the three state banks (BCI, BND, BNCD) the National Transport Company (CNTR), the National Housing Agency (SNH) and Lorombois-, for example, have been closed and are in the process of being liquidated, after they have been inoperative for several years. SOCEFI, the state forestry company, which has not been in operation since 1982, has recently been sold to a private entrepreneur. The Govern- ment's search for private partners has been successful in productive sectors: the oil- and soap-producing company (SICPAD), the textile company (UCATEX)and the palm oil company (CENTRAPAIK)are now being managed by private companies with only minor state participation. Other enterprises such as the transport company (ACCF) or the company in charge of importing and distributing petroleum products (TOCAGES)have signed management contracts with private partners who run these public enterprises in accordance with profit-oriented principles.

142. The Government has begun to address the sector's financial difficulties with the help of a rehabilitation program which includes debt consolidation, improvement of the liquidity situation, and provision of capital needed for the enterprises' operations and investments. Over many years, the state not only failed to pay for goods and services it received from the various enterprises, but it also ordered cash advances to the Treasury from enterprises and public offices with liquid funds (OCCS, CAISTAB, CENTRA-HYDRO,for example). Enterprises were therefore increasingly unable to pay their taxes, to contribute to the social security system, and to honor bills due to other enterprises. Consequently, a general liquidity crisis in the parapublic sector had developed at the end of the 1970s. In 1981 and 1982 part of the enterprises' debt has been consolidated with the help of a CFAF 5 billionloan from France,but the Government estimated that an additional CFAF 6 billion would be needed to cover enterprises'deficits and the state'sinternal debt. In a second step, the liquidity of many enterprises has been improved by raising substantially prices and fees charged for products and services, which had remained unchanged for many years, and by lowering production costs through staff reductions. While these Lmnediate measures have had a positive impact on the parapublic sector's financial situation, they have not been sufficient for guaranteeing profitable operations for public and mixed enterprises in the future, because many enterprises are undercapitalized and need substantial capital increases, reconstitution of equipment and buildings before they can be expected to become viable enterprises. To this end. the Government has created a Recovery Fund ("Fonds de Relance") which was funded for the first time in 1983 with the help of French aid and since then by earmarked taxes on petroleum products. Most of its funds have, however, been used to consolidate past accumulated debts of SOCADA, the state banks, and other enterprises.

143. In general, privatization of public or mixed enterprises pro- gresses only slowly - partly because private enterprises are still hesi- tant to return to the CAR, and partly because the Government lacks the - 58 - determination and skills necessary to realize its re-privatizationprogram. On a technical level, a High Commission for the Development and Organiza- tion of Public and Mixed Enterprises was created in 1981 and attached to the Presidency in order to better prepare and organize the rehabilitation of the parapublic sector. The High Commission has prepared a diagnostic of the sector, proposed concrete rehabilitationmeasures and provided technical assistance to the various enterprises in accounting and financial management. In spite of its high-level assignment, the Commission however, has not succeeded in becoming the state's overall authority which would establish the enterprises' autonomy and guide their rehabilitation efforts, mainly because many ministries have continued to consider interference in the enterprises' affairs their prerogative and the High Commission does not have control over funds without which most enterprises cannot be rehabilitated. The frequent changes in responsibilities for the parapublic sector between the High Commission and the Ministry of Industry and Commerce, or other policy units in the Presidency, reflect the discrepancy between the Government's intention to render enterprises more autonomous and responsible for their activities and the ministries' acquired attitudes to be involved in the enterprises' operations, and continue to represent an important obstacle to the sector's rehabilitation.

Monetary and Credit Developments

144. The CAR is a member of the Central African monetary union and together with Cameroon, Chad, Gabon, Equatorial Guinea and the Congo it shares a common currency, the CFA franc, which is issued by a common central bank, the Banque des Etats de 1'Afrique Centrale (BEAC). The CFA franc is fully convertible into French francs at a fixed rate of CFAF 1 = F 0.02. The area's monetary policy is formulated by the BEAC's Board of Directors assisted by a National Monetary Committee in each country which overseas policy implemqntation, assesses credit needs and proposes rediscount ceilings to the BEAC Board. The Central Bank controls monetary policy with the help of rediscount ceilings, four bank coefficients (reserve coefficient, liquidity ratio, ratio of deposits to non-rediscountable credit and the ratio of own resources) and interest rates. The Board of Directors sets annual ceilings on short- and medium-term rediscountable credit for the CAR. Within these ceilings subceilings for individual banks are set by the National Monetary Committee. In recent years actual redis- counts amounted to less than half of the established levels and rediscount ceilings have therefore not played an important role in controlling monetary policy. Interest rates have remained comparatively low and basically unchanged in spite of their rapid increase on foreign financial markets during the past several years. As a mamber of the monetary union, the CAR cannot unilaterally change the basic rediscount rate, but it can determine the differentials between the basic rate and interest rates applicable to commercial banks. With regard to credit to the Government the Central Bank is obliged to limit its annual credits to 20% of the domestic budgetary revenue of the previous year. I

145. In addition to the Central Bank, the banking system comprises two commercial banks and an agricultural development bank plus three state - 59 -

banks which have been inoperative for some tiiimand are currently being liquidated. The two commercial banks, "Banque Internationalepour l'Afrique Occidentale" (BIAO) and "Union Bancaire en Afrique Centrale" (UBAC), are under foreign management and have been operating prudently and at substantial profits. The BIAO is a foreign bank with several sharehold- ers and UBAC is a mixed company with the state holding 60% of its capital. Operating procedures reflect those of their mother banks which not only control the banks' activities, but also require submission of the most important credits for their approval. In 1984, a new agricultural development bank, "Banque de Credit Agricole et de D&veloppement" (BCAD), was established with financial and technical assistance from Credit Agricole (France). The state holds 33% of its capital, a middle eastern investment company, Credit Agricole and a consulting firm share the rest. At present BCAD operates primarily as a commercial bank and its only resources consist of its capital. In the future, it expects to engage also in development activities. The Treasury and the Postal Checking System also perform some banking operations.

146. The CAR economy is characterized by a low penetration with banking services, very low levels of bank deposits and inadequate investment financing. Banking activities are concentrated in the capital, and there are only six banking outlets in the whole country for 2.5 million people. Only two of the six outlets can be considered operational (those of the BIAO and UBAC) and only one outlet exists outside Bangui. The 55 Post Offices perform rudimentary financial activities but dispose of only very limited resources. A large part of the CAR's population is therefore excluded from using the financing system. In addition to lacking a regional representation, the banking system suffers also from inadequate services in Bangui, slow transfer of funds, high commissions, long lines at bank counters, and limited personal credit facilities. Between 1974 and 1983, the volume of demand and time deposits as a percentage of GDP has declined from somewhat less than 8% to 5.5%, reflecting the general decline in economic activities and credit demand from the private sector. The banking system also succeeds to a much lower degree than other developing countries in the region to cover its credits by deposits. In the late 1970s and early 1980s deposits covered only about half of the total credit volume awarded by the banks. A long history of unfortunate experiences in the banking sector during the 1970s appears to be at the root of this low deposit/credit ratio: the failure of the state development bank in 1973-74, the unavailability of deposits made at the Post Offices in 1973, the state's failure to repay vouchers issued to cotton farmers in 1973-74, the collapse of the state commercial banks in 1978-79 and in 1981-82, and the state's very reluctant and only partial compensation of losses incurred by the public during the 1979 political riots. Checks are hardly used for settling business transactions and civil servants withdraw within two or three days their salaries credited to their accounts. At the same time substantial credit volumes at very high interest rates are effected on parallel markets in Bangui and other urban centers. - 60 -

Table 5.5: CAR - Compositiou of Short-Term Credits, December 31, 1981 (in percent of total)

Credits (percent of total) CAR Cameroon Congo Gabon

Agriculture 9.2 3.9 2.5 5.7 Mining - 1.4 15.4 6.2 Manufacturing 10.6 25.9 24.1 13.2 Public Works 2.3 10.2 6.6 29.4 Domestic Commerce 57.6 32.9 33.6 29.0 Export Commerce 10.4 6.4 5.1 3.1 Services 2.3 9.6 6.6 8.6 Other 7.6 9.7 6.1 4.8

100.0 100.0 100.0 100.0

Source: Central African authorities and staff estimates.

147. Credit and monetarydevelopments have, of course,closely re- flectedeconomic activities in general,and budgetarysituations in particular. Between 1965 and 1976, a periodof economicgrowth, domestic credit expandedat an averageannual rate of about 16% or roughlytwice as fast as GDP in nominal terms. Between 1974 and 1983. when the economy deteriorated, credit demand and time deposits declined from about 8% of GDP to 5.5%. Short-term credits have accounted on average for 80 to 90% of the total credit volume to the private sector with an increasing trend from the late 1960s throughout the 1970s and early 1980s, which can be explained by the virtual absence of a functioning development bank, and the predominance of external funding of development expenditures. Domestic commerce and International trade have traditionally received well over two thirds of total short-term credits, the rest going to manufacturing, the textile company in particular, agriculture and housing. In 1979, credit to the private sector declined by 14% when political disturbances translated into an abrupt decline of economic activities. Credit to the Government, which enjoyed overall creditory positions during 1965-70,rapidly increased from CFAF 1 billion, or about 8% of budgetary expenditure in 1971 to almost CFAF 12 billion, or 43Z in 1979. - 61 -

Table 5.6: CAR - Monetary Survey, 1975-85

(in billions of CFAF; end of period)

proj. 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 Dec.

Forei;n Assets (net) -4.8 0.9 -1.1 -2.5 3.4 6.2 8.4 5.4 7.0 13.2 14.7

Central Bank -1.7 2.0 3.1 0.9 5.9 8.2 10.1 4.0 3.7 9.7 11.2 Deposit Money Banks 1.7 3.4 0.6 1.6 2.4 2.8 3.0 1.5 3.3 3.5 3.5 Postal Debit -4.8 -4.5 -4.8 -5.0 -5.0 -4.8 -4.8 - - - -

Domestic Credit 22.5 22.6 25.5 30.2 27.4 36.6 41.4 41.0 42.1 40.7 45.5

Claims on Government (net) 9.0 9.7 10.8 12.0 11.8 13.1 16.9 10.7 11.3 10.1 12.5 Claims on Private Sector 13.5 12.9 14.7 18.2 15.6 23.5 24.4 30.4 30.8 30.6 33.0 Broad Money 13.7 19.4 20.5 22.5 27.1 36.6 45.3 42.9 48.0 51.7 58.0

Currency in Circulation 7.5 9.0 11.1 13.4 17.9 24.4 32.0 31.2 34.4 36.8 - Demand & time Deposits a/ 6.2 10.4 9.4 9.1 9.2 12.3 13.4 11.7 13.6 14.9 - Other Items (net) 4.0 4.1 3.9 5.2 3.6 6.1 4.4 3.7 1.1 2.2 2.2

a/ Including deposits with postal checking system.

Source: Central African authorities and DMF projections.

148. The strong expansionin creditvolume in 1980 and 1981 reflected the financing of enterprises' resumed activities (petroleum imports in particular) and the Government's financing needs. It did not, however, continuein the subsequentyears, for both total domestic credit and private sector creditexpansion stagnated between 1982 and 1984. Net foreign assets of the banking system, which included the postal debt until 1980, have become positive in 1979 and have risen rapidly thereafter.

Balance of Payments

149. The deterioration of the balanceof paymentsin the late 1970s and early 1980s reflects the CAR's economic decline in general, its weak- ened agricultural export capacity in particular, the recent reconstruction efforts and the declineof terms of trade. Throughmost of the 1970sthe trade balance remained positive as imports could be kept below only slowly - 62 -

Table 5.7: CAR - Balance of Payments, 1975-85 (in billions of current CFAF)

ITWE 1975 1979 1980 1981 1982 1983 1984 1985 proj.

Exports (GW-FS) 18.4 35.2 44.0 48.5 50.5 58.0 65.2 74.0 Merchandise (fob) 12.4 27.9 32.7 34.5 37.0 44.3 50.1 56.9 Non-Factor Services 6.0 7.3 11.3 14.0 13.0 13.7 15.1 17.1

Imports (G*NFS) 34.2 52.3 72.0 68.5 92.3 100.7 105.5 114.2 Merchandise (fob) 17.8 29.6 41.6 42.4 53.4 59.1 62.6 69.8 Non-Factor Services 16.4 22.7 30.4 26.1 38.9 41.6 42.9 44.4 Resource Balance -15.8 -17.1 -28.0 -20.0 -42.3 -42.7 -40.3 -40.2

Net Factor Income -0.1 0.2 0.5 1.3 5.4 5.1 4.6 5.6

Net Current Transfers -0.4 -2.6 -4.0 -3.8 -5.6 -5.7 -5.7 -5.8

Current Balance -16.3 -19.5 -31.5 -22.5 -42.5 -43.3 -41.4 -40.4

M & LI Capital Inflow Direct Investment 1.2 7.3 1.0 1.9 2.5 3.0 3.5 4.0 Official Grant Aid 3.6 19.4 21.4 22.3 28.7 26.0 25.0 25.0

Net M & LT Loans (DRS) 2.1 2.7 8.4 8.6 5.5 8.3 11.9 13.8 Disbursements 2.9 2.8 8.6 9.3 6.2 12.5 14.7 20.2 Repayments -0.8 -0.1 -0.2 -0.8 -0.8 -4.3 -2.8 -6.4

Other M & LT (net) 0.8 0.6 2.7 0.5 0.8 1.2 0.8 0.6

Net Credit from IMP 0.6 -0.7 -0.2 4.8 0.7 1.7 -0.6 0.2

Net Short-Term Capital 1.7 -0.3 1.9 -1.3 2.7 -1.0 1.2 1.4

Capital Flows (net) - 0.6 0.7 0.5 2.7 2.6 3.4 -

Errors & omissions 1.5 -8.0 -4.5 -16.1 -11.8 -1.9 1.0 -3.6

Change in Reserve Level -0.2 -2.1 0.1 1.3 10.7 3.4 -4.8 -1.0 (- indicates increase)

Memoranda Items

Net Foreign Assets -4.8 3.4 6.2 8.4 5.4 7.0 13.2 14.7 Gross International Reserves 0.8 9.4 11.6 18.8 15.2 17.8 24.5 27.1 Equivalent Months' Imports 0.3 2.2 1.9 3.3 2.0 2.1 2.8 2.8

Source: Central African authorities and staff estimates. Statistical Appendix, Table SI 4. growing exports. The absence of significant food imports, comparatively low investments and a decline in foreign aid flows, with which capital goods could have been financed, and rather favorable world market prices for the CAR's export commodities are responsible for this situation. The - 63 - overall balance of payments also remained mostly positive or was only slightly negative during this period, since the current account deficits were financedby substantialpublic transfersand privatecapital inflows. Since 1980, importshave reached,however, considerably higher levels in connectionwith the economicreconstruction efforts while exportsexpanded only graduallydue to the loD',-standing neglect of agriculture and unfavorable world market prices for cotton, timber and coffee. Between 1976-79 and 1980-84, the average annual currentaccount deficits consequently more than doubledin nominalterms and rose from 11% to 17% of GDP. Foreign reservesalso declinedbetween 1980 and 1983 but have risen in 1984, due mainly to significantly increased net official aid disbursements.

150. Exports. The CAR's weak export performance - between 1976 and 1984, real merchandise exports grew at an average annual rate of only 2%, and stagnatedduring 1980-84- has contributedsignificantly to the very poor overalleconomic performance. Between 1975/76and 1981/82cotton productionfell by 50% and, in spite of a recoverywhich appears to have begun in 1983, averageannual production in the early 1980s has remained considerablybelow the levelsachieved in the late 1970.. The production declinewas accompaniedby a fall of real world market prices:average prices during the early 1980swere almost 20% lower in real terms than durlng the early 1970s. Althoughcoffee productionhas increasedby some 36% betweenthe early 1970s and early 1980s,the CAR's gain from the world market price surge during 1976-79was limitedas its coffeeproduction virtuallystagnated during this period. While productionhas increased since 1979, in response to a lagged improvementin domestic producer prices,world coffeeprices have fallen;during 1981-83real world market prices were one quarterlower than the precedingthree years. Timber exportswhich had risen stronglyduring the late 1960s and early 1970s have stagnated and declined since the mid- and late-1970sfollowing the decline in demand for hardwood induced by the recession in industrialized countries in 1974, and also due to difficulties experienced in evacuating wood via international transport routes. Continuing evacuation difficulties and comparatively low world market prices during 1982-84 have resulted in a relative decline in timber's share in the CAR's export earnings. Official diamond exports, which had risen rapidlyduring the 1960shave declinedor stagnated since the late 1960s and accounted for somewhat less than one fourth of total exports earnings on average during 1981-83, compared to almost half of total merchandiseexports in the late 19609. However,they have begun to increase significantly in 1984 followingthe Government's policy changes (para.92).

151. Imports. The CAR's importsof goods and non-factorservices rose less than one percenta year in real terms during the 1970s,reflecting the slow growthof GDP in generaland low investment levels in particular. Information on the composition of merchandise imports is lacking but it appears that low food imports also contributed to limiting imports. Following the resumption of foreign aid in 1980, Imports increased by 26% - 64 -

Table 5.8: CAR - Composition of Merchandise Exports, 1966-85 (in percent)

Average 1966-70 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 proj.

1. Coffee 19.0 18.9 33.2 32.0 25.3 25.7 24.4 21.0 26.8 33.1 20.6 23.4 2. Cotton 21.8 18.8 21.8 14.6 8.9 8.0 11.7 15.4 7.4 12.7 18.0 17.9

3. Diamonds 47.8 23.6 17.5 22.9 37.7 34.3 31.1 26.1 24.4 23.2 27.9 27.4

4. Timber - 24.0 20.4 20.4 19.6 22.6 21.8 28.0 21.2 19.0 20.2 20.0

5. Tobacco - 1.6 2.0 3.5 4.7 3.5 3.3 3.6 3.2 2.1 2.6 2.3

6. Other - 13.1 5.1 6.5 3.7 5.9 7.7 5.9 17.0 9.9 10.8 9.0 TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Sources: Central African authorities and staff estimates.

due primarily to a catching-up effect in materials, equipment and consumer goods which had been imported in insufficient quantities during proceeding years. Imports have risen from 35Z of GDP during 1975-79 to 43Z during 1981-84, but nevertheless stagnated In real terms over the same period, mainly because a rather large share of imports is tied to investment projects which have been implemented at a slow pace. 152. Industrialcountries in WesternEurope and the United Stateshave traditionallyaccounted for well over three quartersof the CAR's international trade (Appendix, Table SA 37; Chart SAI). More than half of the CAR's imports originate in France which buys about a quarter of the CAR's exports. The CAR's exports to other African countries have declined during the 1970s, while its imports from Africa have increased over the same period due to increased petroleum imports from Nigeria.

External Debt

153. Over the past decade the externalmedium- and long-term debt has outpaced the country's debt-servicing capacity, and irregular debt servicing and rescheduling have become a major obstacle to regaining credibility with international creditors and thereby to economic development. As mentioned earlier, the CAR's development programs have been financed by external rather t1 n domestic sources. Since domestic savings are very small and expectedto grow only very slowly,foreign private and official funds will continueto play a dominantrole in flinancinginvestments for some time. It is thereforevery importantthat the Governmentdevelops a - 65 - medium-term debt-contracting strategy which takes into account the CAR's development priorities and realistic debt-servicing capacity.

154. The public and publicly guaranteed external debt outstanding and disbursed has risen from CFAF 6.8 billion in 1970 to CFAF 16.8 billion in 1979, and CFAF 98.1 billion at the end of 1984 (US$224 million), or from 14% of GDP in 1970 to 38% in 1984. Commitments and disbursements have developed in an irregular pattern over the past 15 years, reflecting both the pace of project implementation and political ikstabilities. The CAR's annual disbursed aid per capita (US$74 on average during 1980-84) is low in comparison with other West African countries, but for several reasons the country did not succeed in servicing its debt regularly. First, disbursements, which doubled between the first and second half of the 1970s, were frequently made for unsound and poorly prepared projects incapable of debt servicing. When economic management progressively deteriorated during the last years of the Bokassa regime and disbursements from France declined rapidly, the Government resorted to contracting expensive private loans. In 1979, for example, medium- and long-term disbursements from France amounted to only one quarter of their levels in the early and mid-1970s, and the share of private credit disbursements in total disbursements rose from some 25% to 50% between the early and late 1970s. Budgetary revenue, on the other hand, grew only slowly and irregularly due to declining economic activities and lax tax collection. The previous governments gave low priorities to debt servicing, and at the end of 1979 arrears had accumulated to about one fifth of total disbursed public debt. The post- Bokassa governments have made substantial progress in addressing the CAR's public debt problem. The Autonomous Debt Amortization Fund (CAADE) in the Ministry of Finance, which monitors foreign debt contracting, has been reorganized, and the debt has recently been regularly serviced with earmarked government revenue (taxes on beer consumption and diamond exports) and budgetary allocations.

155. In 1981 and 1983, the CAR received debt relief from creditor countries under Paris Club agreements. In 1983, participating creditors rescheduled US$21.3 million, or 10% of total disbursed public debt in 1983, US$9.7 million of which represented arrears built up in 1982, and US$11.6 million maturities due in 1983. The resulting total debt service amounted then to US$19 million in 1983 compared to US$36.3 million before rescheduling, excluding IMF charges, (19% of budgetary revenues vs. 37%). While the 1983 debt rescheduling resulted in substantial debt relief, the CAR's debt service problems are expected to continue over the next few years. Pro- jected debt service payments between 1985 and 1990 average about US$30 million a year (including IMF charges), or roughly one third of projected annual budgetary revenues, without taking into account debt service on new borrowings, although the latter are expected to be contracted on highly concessional terms. Part of the large debt service payments due in the next few years result from repurchases and service charges of IMF funds in connection with stabilization programs; they amount to roughly one quarter of total projected debt service between 1985 and 1990. - 66 -

156. The short-term solutions to the CAR's debt servicing problem provided by the Paris Club meetings do not address the country's structural problem, which results from the fact that the public debt has accumulated over many years to a substantial stock because it has not been serviced regularly, and many of the projects for which foreign financing had been contracted are incapable of servicing their debt. Because of the CAR's poor debt servicing record and poor economic management in the past, creditor countries appear only to be ready to reschedule the debt over short periods and in connection with financial stabilization efforts supported by IMF programs. The high debt service payments are made at the expense of capital expenditures since it is politically very difficult to reduce further current expenditures, especially for wages and salaries. Frequent bilateral or multilateral debt rescheduling could eventually lead to a diminished credibility with the international donor community, which in turn could result in lower foreign aid. A solution to this dilemma would require important political decisions from both the Government and the creditors. First, the Government would have to service the public debt fully and regularly. Second, only sound investment projects which fit into the country's overall and sectoral development strategies should be presented to the donor community for external financing. Once these two conditions prevail the creditors should be prepared to extend the debt rescheduling periods, thereby softening the annual debt service burden and freeing government revenues for investment purposes.

VI. DEVELOPMENTPROSPECTS AND POLICY RECOMMENDATIONS

157. The Central African Republic finds itself at present in a very difficult economic and financial situation. The country's natural disad- vantages for economic development -- its landlocked position and a small population dispersed over a large area - have been aggravated by serious economic mismanagement over many years. The long-standing neglect of the agricultural sector, and an almost complete disregard for cost and productivity concerns in the public sector, have resulted in low output and a loss of financial credibility. The fact that the meager agricultural surpluses have been used for consumption rather than development purposes, and foreign finance has substituted for rather than supplemented domestic savings must be of serious concern to both the Government and the donor community. The recession-inducedreduction in demand for the CAR's primary exports during the early 1980s has not aided the Government's recent efforts to rehabilitate the economy. The drought in 1983/84 has meant a further setback to resuming economic growth. Although the economy has grown since 1984, average annual per capita income has declined over the past five years.

158. In spite of t'lis bleak background, the CAR's prospects are good for returning to a path of economic growth and achieving a modest but sustainable rise in per capita income in the medium- and long-term. This assessment is based on the country's good agricultural resource base, supplemented by mineral resources (diamonds), a labor force whose level of productivity and performance could be raised rather quickly, and on the - 67 - assumptionthat appropriatemacroeconomic and sectoralpolicies can be designedand implemented. The growth scenariodescribed below (pars. 177) assumesalso that sound developmentand fiscalpolicies will generate sufficientlylarge foreignaid flows needed to complementdomestically financedinvestments, and that the qualityof foreignassistance will improve.

Rural-basedDevelopment Strategy

159. The proposeddevelopment strategy is determinedby the following main characteristicsof the CAR economy:(i) comparativelyearly stage of developmentand, therefore,dominance of the agriculturalsector; (ii) low level of agriculturalproductivity; (iii) relatively unskilled labor force; (iv) the country'slandlocked position; and (v) a small populationdis- persed over a large area.

160. Agriculture'scontribution to GDP and employmentmake it the centerpieceof the CAR's developmentstrategy in the short and medium term. Agriculturehas to develop to a significantlymore advancedstage, so that it can supply the foodstuffsand raw materialsneeded in the other sectors, provide the necessary surplus for development purposes, earn the necessary foreign exchange, and provide employment as well as a market for products of other expanding sectors. Agriculture should therefore be the priority sector in terms of allocation of developmentfunds and skilledhuman resources. This does not mean that other sectorssuch as manufacturingor privateservices should not be given any attentionby policymakers at this stage; it implies,however, that their developmenthas to follow that of agriculture, since the other sectors cannot develop without a strong agricultural base. In the past, governments were aware of agriculture's central role for the CAR's economic development but this awareness was not accompanied by appropriate action, and results were negative. The attemptedindustrialization through the creationof publicenterprises during the 1970s also failed in part becauseit was not supportedby an expandingagricultural sector.

161. Agriculturecan serve as the country'sengine of economicdevelopment only if its productivitycan be substantiallyraised. Since progresstowards improved agricultural productivity would advanceoverall economicdevelopment more than any other singlefactor, the country'shuman and financialresources should be concentrated on designing policies and investments aimed at raising productivity efficiently and directly. Systematic and persistenttraining of agriculturalpersonnel, appropriate institutionsto utilizeskilled personnel and a correctincentive structure are the most important instrumentsfor bringingabout an improvementin agriculture'sperformance. Since the obstacleacaused by the absenceor neglect of these factorsare also most difficultto overcome,they deserve the Government'sand foreigndonors' highest attention. In order to achievea lastingincrease in agriculturalproductivity, interdependent policy measuresand investmentshave to supporteach other. An improvement of the rural well-beingby providingthe rural populationwith access to - 68 - safe water, health facilities, better educational opportunities and consumer goods, for example, will have a full impact on agricultural productivity only if farmersare facing appropriate production incentives. Research and development on high-yielding crop varieties are as important as the pres- ence of well-functloning marketing arrangements, credit markets and the availability of an adequate transport infrastructure. In general, a significant increase in the farmer's purchasing power, improvement of his living conditions and full participation in decision-making concerning his interests must be the final test for the appropriateness of all policy measures.

162. After having decided how much of the country's total investment budget should be allocated to agriculture over a given period, the Govern- ment has also to make strategic choices about the intra-sectoral distribution of investment funds. Investments and various policy instruments have different impacts on productivity, output and employment for different crops or regions, and the costs associated with them depend upon the technologies applied. Factors that are wholly or partly beyond the Govern- ment's control, such as the world market prices for the CAR's commodities, international transport costs, agricultural input prices or the CAR's relatively low degree of economic integration, make these choices sore complicated and require a careful analysis and a systematic decision-making process. In order to be able to achieve a higher agricultural productivity with the least costs, comparative studies on the various policy instruments and investments should be carried out so that the Government can concentrate its efforts on the most appropriate crops, regions, policy instruments and technologies. Since this information is at present not available, the development strategy outlined below remains rather general.

Increased Food Production 163. The CAR's favorable climatic and soil conditions make the food subsector the most-suited sector for creating additional employment and monetary Income. Increased food production is needed to feed an increasing urban population and to alleviate the pressure on the balance of payments through reduced food imports and, possibly, food exports to neighboring countries. Since domestic production costs of food can be expected to rise at a slowerpace than overallconsumer prices, acceleration of food output will also contribute to an easing of inflationary pressures. This will enable the Government and private entrepreneurs to stabilize urban wages and salaries without which the CAR's budgetary difficulties cannot be solved and manufacturing in import substitution cannot become competitive. Initially, labor-intensive production techniques should be applied in agriculture in order to absorb the rural labor force. In the medium term, productivity in food production can be excpectedto rise through specialization, increased mechanization, agricultural training, improved extension services, and research and development.

164. The creation of rural employment and incomes through increased agricultural output can, however, only become a successful stimulant for economic growth if it is accompanied and supported simultaneously by other - 69 - policy measures. First and most importantly, the living conditions in form of access to safe water, health, and education facilities have to be improved significantly. Second, Imports of foodstuffs and other basic consumer goods that ran be produced economically in the CAR or replaced by other local products should be discouraged by import duties and consumption taxes - within the limits of the UDEACatatutes. Third, the Government should continue to give high priority to maintaining roads in support of agricultural production and marketing.

Export-led Development

165. The Government should give equal attention to export promotlon and import substitution in its development strategy. However,at this development stage and over the next few years increased agricultural exports rather than manufacturing in substitution for imports will be the main source of economic growth and employment. The country has experience in exporting primary commodities and diamonds, and at present funds applied to expand exports would probably earn more foreign excbange than could be saved by applying the same funds to import substitution activities. The Government should therefore continue its export-promoting policies aid define additional policy measures to further raise quantities and qualities of export commodities. The various policy measures recently introduced to raise cotton production, for example, have already resulted in substantial increases in production and yields over the past three years. In view of the CAR's precarious budgetary situation and the rather unfavorable outlook for world market prices for cotton over the next decade, the rural development agency in the cotton zone (SOCADA) will have to improve its efficiency. Improvements in the organization and control of diamond exports and in legislation, as well as additional measures .Ne Government is considering following a comprehensive diamond sector report, are expected to strengthen further the recovery of diamond exports which appears to have begun in 1983. Timber exports have stagnated or declined over the past few years due to stagnating economies in Europe, worsening river and rail transport conditions, and only slow progress in strengthening the national forest administration and legislation. A substantial expansion of timber exports requires intensive training of national cadres, identification of new markets, a review of the forestry lfa and incentives, a forestrysurvey, and a joint effort with t'e Congo to improve river and rail trtansport routes.

166. The Government's export-promotingpolicy measures should concen- trLte on traditional exports where the country has experience and where significant expansions may be achieved by the improved use of existing investments and where productivity increases require relatively small additional capital outlays. But it should also make special efforts to upgrade its exports by Frocessing its commodities further and thereby increase the value-added, employment and foreign exchange earnings. To this end, roots such as cassava, and meat and poultry could be exported to the Congo and Zaire, and millet and sorghum to Chad. Attention should also be paid to increased diamond cutting and expanding gold production and exports. - 70 -

167. Increased export earnings and tax revenues by themselves are of course no guarantee for economic growth. Agricultural exports can play their appropriate development role only if they contribute to creating or strengthening of economic linkages within agriculture and with other sectors. Agricultural export earnings and tax revenues rhould therefore be translated Into investments needed to raise agricultural productivity, improve the rural infrastructure and into demand for manufactured goods. They should initially be used to import machinery and tools as direct agricultural inputs, and investment goods for setting up domestic manufacturing enterprises capable of supplying agriculture with simple machinery and tools. The upgrading and diversification of exports would also provide opportunities for training the labor force, the skills of which could, over time, be employed in import-substituting activities.

Import Substitution 1

168. In its efforts to create employment and stimulate industrial growth the Government feels that it should give greater emphasis to import substitution and develop the domestic market. Unsatisfactory economic growth rates during the late 1970s and early 1980s, the country's landlocked position, the natural barrier provided by high-cost transport routes, and the Government's wish to reduce dependence on the international economy appear to suggest that an inward-looking approach may indeed be the appropriate development strategy for the CAR. The CAR's very small market, both in terms of popuJlation size and income level, high domestic transportation costs, low level of economic integration and scarcity of skilled people require, however, a very careful selection of industries suitable for import substitution. By definition, import substitution policies tend to limit production to the size of the domestic market which in the case of the CAR means low production levels, smnll quantities of imported inputs, absence of economies of scale, and high production costs. Lack of competition among enterprises also does not favor efficient and low-cost production. Since the level of industrial activities is still very low in CAR, most inputs for import-substituting enterprises will have to be Imported which tends to increase re-ther than decrease dependence on foreign markets. Import substitution policies should therefore encourage manufacturing closely related to the country's traditional agricultural production and those with a comparatively low level of technology such as textiles, shoes, office furniture, bicycles, and beverages. The decision to produce packag- ing material from kenaf for coffee and other agricultural products, cement, sugar, palm oil, soap, diary products, potatoes, tomatoes, and other European-type vegetables should be taken only after their economic feasibility has been clearly demonstrated. In order to avoid costly subsidizing of uneconomic enterprises, Import substitution manufacturing should be left to the private sector. The Government's most appropriate support to import substitution consists in refralning as much as possible from administrative and bureaucratic interference, simplifying import facilities, and providing general incentives such as transport, electricity and communication facilities, as well as an adequately trained labor force. - 71 -

169. Importsubstitution should be seen as a means to strengthenthe domesticmarket throughregional development poles aroundsecondary urban centers. In order to reducerural to urban migration,employment pressure on the civil service and costs for infrastructure, health and education facilities in the capital, and create employment in rural areas, the Government should consider providing incentives for entrepreneurs in agricultural production centers where rising income levels will generate a demand for basic consumer goods. Even unsophisticated and appropriate production techniques require, however, certain minimum infrastructure investments far beyond the rural communities' financing capacity. The Government should therefore help raise ru-.al incomes through improved producer prices and allocate central budgetary investment funds to the community level. Village cooperatives should be encouraged to develop mechanisms by which higher incomes and budgetary allocations could be channeled to investment priorities. Since the initial costs of creating such regionaldevelopment poles would be high, their promotionwould initially have to be limited to a few regions with the best development potential. These investments are likely to have higher economic returns than those decided upon by governments or foreign donors because project priorities would be chosen by and implemented through the direct involvement of the communities or cooperatives which tend to know their needs best. This development approach of creating employment, income, and investablesavings through regional development poles implies,however, a changein attitudeand relationshipbetween the state and the rural communities. The Governmentwill have to recognizethe villagesand cooperativesas key entitiesin chargeof economicand socialdevelopment. Therefore, they will have to be systematically encouraged to become responsible decision-makers and be given the funds needed to invest.

External Assistance

170. The policy reforms mentioned above can only be introduced gradually and will only with delays result in increased output, foreign exchange and investments. The funds required to finance the investments, agricultural inputs and training in support of policies aimed at improving the CAR's economic performance surpass its financing capacity. Additional foreign capitalinflow can, however,only be expectedto be channeledto the CAR if private investors and official donors can be convinced that the Governmentwill implementappropriate agricultural, fiscal and overall economic policies.

171. The Government's commitment to clearly stated development objectives and its political will to carry out policy measures to achieve agreed upon goals are by far the most importantprerequisite for a successful developmentstrategy. In the past this commitmenthas often been lacking and deviationsfrom declaredor implicitobjectives have not been uncommon. Part of this problem stems from the fact that the governmentshave often failed to lay out and agree upon a developmentstrategy or even on short- term economic programs. Faced with the large number, urgency and complexi- ty of problems and the difficulties to evaluate policy instruments and trade-offs between the various sub-objectives, the authorities have tended - 72 - to postpone decisions about choices and to propose broad and general development objectives, without listing them in an order of priority or specifying them. The scarcity of statistical data and the low priority given to systematic data collection add to this problem. Progress towards general objectives often cannot be identified or is slow. Ad-hoc decisions in response to internal and external pressures have become a method for addressing medium-term problems and create an impression of lack of leadership. Appropriate policy decisions, such as stimulating agricultural production through producer price increases, or reducing current budget expenditure by restraining the recruitment of civil servants, for example, frequently do not become fully effective, because counteracting measures, such as promotions in the civil service and supplying fertilizer to cotton farmers free and irrespective of their productivity, are implemented at the same time. The absence of an official development strategy or program has also made it more difficult for bilateral and international aid agencies to design and implement assistance programs.

172. The Government is aware of these deficiencies and in March 1984 decided to create a Coordination Committee whose purpose it is to elaborate economic and financial adjustment programs. Measures proposed by the Committee will be presented to the President and submitted to the Council of Ministers for approval. In the past, similar committees such as the National Planning Council and the Planning Commissions Units of the individual mfnistries have not been very effective in coordinating national development activities for the reasons mentioned above. The scenario of economic growth projected in the following paragraphs assumes that the Coordination Committee succeeds in preparing a realistic adjustment program which will be approved by the Government and then be implemented. Such a program, and the political process through which it is to be generated, are vital not only for the mobilization of the necessary technical and financial support from the international community but also for the preparation of a medium-term development plan for 1986-90.

173. The scarcity of administrative skills restricts the preparation and implementation of appropriate policies even more than the shortage of funds. Training and focused education will raise the CAR's administrative and managerial capacity, however, only in the medium- and long-term. The CARwill therefore have to continue to rely on foreign technical assistance for some time. At present, the CAR's human resources are often wasted. The uneconomical use of human resources in the civil service by frequent changes in position or lack of guidance is aggravated by an inefficient use of foreign technical assistance which is due to several factors: (i) civil servants, because of their unfamiliarity with their subject matter, often feel insecure and hesitate to engage in a real training process with expatriate technical experts; (ii) foreign technical experts often resign themselves to "just doing their job," because they are not provided with a counterpart seriously interested in being trained, or because the counterpart is moved to another position once he or she has mastered the subject matter; and (iii) foreign technical experts acquire a monopoly position of knowledge and skills, which stands in the way of transferring the latter because the Central African counterparts distrust their policy advice. It - 73 -

Is therefore not uncommon that foreign technical advice is either disre- garded or that importaat technical and policy advice positions provided for by foreign donors are not filled over extended periods of time. In the future, the primary thrust of technical assistance progrms must therefore lie in training Central Africans with the aim of steadily reducing the need for expensive-foreign techuical assistance. This can be achieved only if administrators assign clear and well-designed tasks to their Central African staff, and promotions and salary increases are made dependent upon continued good performance rather than upon political or other criteria. This implies also that the turnover rate in civil service assignments be drastically reduced. At the same time, the systematic training and guidance of Central Africans by foreign technical experts will have to become as important as their technical expertise for evaluating the latter's performance. Nor ProblemAreas

174. The CAR's economic problems, which have developed over many years, cannot be expected to disappear overnight - even after appropriate policies have been put in place. But well-defined adjustment and action programs are a precondition for overcoming the most urgent development obstacles and attracting the necessary foreign aid and technical assistance. The following four main problem areas deserve the Government's highest and immediate attention:

(a) low level of agricultural production and exports; (b) need for coherentoverall and sectoraldevelopment strategies and investment programs including institutional rehabilitation;

(c) priority to be given to a reduction in unsustainable level of public current expenditure due to a vastly oversized civil -service; and

(d) action required to remedy the malfunctioning international transport routes.

Problpms in other areas, such as population growth rate, health, and education will have to be addressedat the same tine. Although the CAR is not denselypopulated, the comparativelyhigh populationgrowth rates (2.5% a year) act as deterrentto improvementin the stagnating or only slowly growing economy and will make efforts to correct the other problems cited above considerably more difficult. The needed reorientation of the education system towards the CAR's economic and social reality and future employment possibilities, and improvements in the health system would also benefit from policies resulting in lower population growth rates.

Medium-term Action Program

175. The Government, aware that the economy could not return to a path of economic growth if past uncontrolled development trends were allowed to - 74 - continue, has taken corrective measures to revitalize the economy. While these measures are steps in the right direction, the magnitude and complex- ity of the structural problems require more fundamental and systematic policy changes and, more importantly, a comprehensive action program. In addressing the country's development obstacles, the Government is confront- ed with a difficult dilemma: on the one hand, the economic &ituation can only be expected to improve significantly by the end of this decade if several key issues in all problemareas are addressedwithout further delay; on the other hand, the CAR's limited financial resources and administrative capacity have allowed the Government in the past only a piecemeal approach which has &ZLea resultedin postponing fundamental reforms. The international community and foreign technical assistance will therefore have to assistthe country in designing policy reforms and implementing the action program. Aid coordination should therefore take place during the early stages of investment programming, project preparation, and ideally cover whole sectors and development strategies.

176. The Government's action program should focus on the following four points:

(a) strengthenthe decision-makingprocess and developmentplanning and institutionsas a basis for desiRningoverall and sectoral developmentstrategies and investmentprograms;

(b) raise the volume and efficiencyof investmentthrough improved project implementation,application of stricterprofitability criteriain selectingnew projectsand making more efficientuse of existingassets;

(c) raise agriculturalproduction and exportsthrough economic incentives and improved performance of agricultural development agencies; and

(d) improve fiscal performance and public sactor management through rigorouscontrol of currentexpenditure, improved tax collection, better financialplanning, and rehabilitationand re- privatization of public enterprises; foreign-financed investments budget should be integrated in the national budget.

A. Political Decision-Making, Development Planning and Institutional Framework

1. There are no easy solutions to overcoming the CAR's current economic crisis and the necessary adjustments will be painful. Foreignaid can help ease the effectsof the adjustmentprocess by supportingthe Government'sreform and action program,but the Central Africans themselves will have to carry the burden of the development efforts. The Government shouldtherefore reach political agreement on overall and sectoralstrategies and the investmentprogram, for only agreed-uponobjectives can be pursuedby appropriatepolicies and supportedby the population, - 75 -

public agencies,and foreigndonors. Privateinvestments are also facilitatedif entrepreneursare informedabout the Govern- ment's developmentstrategies and philosophies.

2. Sectoralstrategies are the direct outcomeof the Government's politicaldecision-making process and must have the approvaland full supportof all ministriesand public agencies. The CAR's sectoralstrategies and policiesshould be guidedby the general developmentstrategy outlined in paras. 159-173. In addition, the Governmentshould abolish all price controlswhere the private market mechanism functions and reduce public interference in economic activities to areas where private initiative cannot be expectedto producedesirable results. Agriculturalproduc- tion, manufacturing,banking, transport, and commerceshould be left to the privatesector.

3. The best developmentstrategies and policiesare useless if they are not properlyimplemented. At present,the CAR's ministries, high commissions,public institutionsand agenciesoften lack the politicalauthority, task orientation,and technicalcapacity to design and implementstrategies and investmentprograms. The Government should therefore raise the efficiency of its administrative apparatus by setting clear objectives and work programs for the individual ministries and agencies, and by linking performance evaluation criteria for civil servants to progress achieved towards these objectives. The High Commission for Planning, the Coordinating Committee for Economic and Financial Policy, and the Ministry of Economy and Finance should become the Government's key institutions for preparing the investment program and reform policies. The High Commission for Planning should, in close cooperation with the planning units in the technical ministries, prepare a national investment program which is to be discussedand approved by the Coordinating Committee before submittingit to the Governmentfor approval. No investment project should even be considered for inclusiaru in the national investment program unless it has been evaluatedby the technical services of the individual ministries and the High Commission for Planning. The Coordinating Committee should become the country's only and decisive body for evaluating and approving the national investment program, and present it for political approval to the Vovernment.

4. The Government should strengthen the link between investment planning and budgeting. All investment projects under execution should have their corresponding budgetary line in the capital budget. Domestically and foreign-financedinvestments should be integrated into one capitalbudget. The Government'sapproval of the annual national budget would thus guarantee consistency and prudent financial development planning. - 76 -

B. InvestmentProgramming

1. In order to achieve an average annual GDP growth rate of about 3% until the end of the 1980s.the volume of investmentwill have to be raised to 15% of GDP (comparedto an averageannual level of somewhat less than 9% during 1980-83). Improvedinvestment planning, more timely project implementation, and the stabilization of the state's public finances are expected to result in increased foreign aid flows, private foreign investment, and domestic savings. The investment code and other administrative instruments should provide the necessary incentives for attracting private foreign investment. 2. In addition to raising the share of investment expenditure in total expenditure, the efficiency of investment will have to be raised significantly in order to achieve the projected growth rate. To this end, the Government's investment policy should include the following elements: (i) application of strict rate of return criteria for all new investment projects (i.e. acceptable rates of return); (ii) better use of existing facilities through meeting recurrent costs, regular maintenance, and additional marginal capital expenditure if required to bring the investment to planned anticipated profitability; (iii) discontinuation of demonstrablyunprofitable projects; and (iv) Improved aid coordination.

C. Agricultural Production and Exports

1. Strengtheningof economic incentives, removing of marketing constraints,and completeabolition of all coercive methods are the key to a lastingincrease in agriculturalproduction and productivity. Farmers and herders shouldbe allowedto pursue their own economic interests and the Government should help strengthen their confidence in the private market mechanism by allowing supply and demand to determine prices and supporting market operations through an improved road network and diffusion of market information through state media.

2. Food crops. With regard to food crops the Government should pursue the following comprehensive program: (i) simple tools, high-quality seeds and planting material should be made available to farmers; (ii) together with the donor community it should address the problem of cassava pests and diseases through applied research; (iii) food crop prices should be determined by market conditions and the practice of imposing low producer prices on farmersby local administratorsfavoring food crop tradersshould be abolished;(iv) food crop traders'entry into the market shouldbe free and licensing of traders by the Ministryof Rural Development should be abolished; and (v) the Government should also prepare a study on the profile and functioning of the market for food crops and small consumergoods in order to introduce - 77 -

policy reforms aimed at strengthening farmers' position as sellers and buyers through increased competition among traders. Farmers should be encouraged to express their interests through cooperatives (GIR) which should be strengthened and progressively be entrustedwith developmentresponsibilities.

3. Cash crops. Cotton productionshould be furtherraised through: (i) continued upward adjustment of producer prices and a systematic reductionof SOCADA'soperating costs to be achievedthrough eliminating input subsidies, and improved accounting, programming, budgeting and cost control; (ii) improvedproductivity through use of insecticides, adherence to the crop calendar; and (iii) effective extension services. Coffee production, supported by ADECAFand CAISTAB, should be structured vertically like cottonproduction and ADECAFshould support the procluction, marketingand exportsof coffeeby private traders. CAISTAB's handlingof coffee exportsshould be discontinued.Coffee producerprices shouldbe reviewedwith the aim of providlg adequateincentives for raising productio-

4. Livestock. The Government should limit its intervention ', the livestocksector to supervisionand health controlof the private traders'marketing organization and help promotea self-financing systemof animalhealth care. 5. Forestry. Priorityshould be given to the elaborationof a new simplifiedtax regime and laws governingforest concessions, improvement of the transport system for evacuation of timber, preparationof a nationalforestry inventory, and reorganization and strengtheningof the forestry administration and management, including better training of personnel. These measures should be accompanied by policies which would encourage the modernization of forest companies, the creation of small companiesusing wood, and the productionof energyfrom waste from forestsand sawmills. Prices of timberproducts on the domesticmarket should be determined by supply and demand.

6. Agro-industries. Given the CAR's early stage of development, the low level of economic integr:tion within the country and its many other handicaps for developing a viable manufacturing base, the Governmentshould, with the help of foreigndonors, identify possiUilitiesfor small-scaleenterprises. Tex. .:e manufacturing, palm oil, dairy productsappear to be prow.'ig; areas where productionmay becomeprofitable. Small proces;..agmills for rice and cassavaflour, milk processingand jaggeries(-ugar) probablyhave a good potentialand shouldbe operatedby private entrepreneurs.No manufacturingproject should, however, be includedin the investmentprogram unless its econaomicviability has been proven beyond any doubt. In their currentdesigns, the sugar and kenaf projectsdo not meet this criterion. Foreign - 78 -

financing agencies should help the Government raise the quality of feasibility studies.

7. Financial Management in Agriculture. Agriculture generates budget revenuesand now consumesthe largestshare of the country's development expenditures. Yet the Government's knowledge about financial flows within the agricultural sector is very limited. CAISTAB, for example, receives, by statutory agreement with SOCADA,80% of the latter's net profits without meeting its commitment to finance SOCADA'soperating deficits, nor to compensate SOCADAfor input subsidies. Part of the CAISTAB's income is used to promote coffee production and other agricultural products, but little is known about the use of the largest part of its funds from coffee taxation. The purpose and function of the CAISTABshould be reexamined and its resources should be placed under the Government's direct control.

D. Fiscal Performance and Public Sector Management

1. Actions required by the Government in this area fall under the following four categories: increase in government revenues, reduction of current budgetary expenditures, reform of the parapublic sector, and prudent external debt management.

2. The Government should raise budgetary revenue through: (i) full Implementation of the tax reform proposed by tl.e nMF; (ii) further strengthening of tax collection including the diamond export tax and substantial tax arrears; and (iii) periodic adjustment of fees and user charges for Government services to economically justified levels. A strict policy regarding exemptions from customs duties and taxes should also be imposed.

3. Current budgetary expenditures should be reduced t" the absolute minimum required for the public administration's normal functioning. The Government's decree to reduce the number of civil servants should be strictly applied, salaries should be frozen over the next few years, and scholarships should be further curtailed.

4. A comprehensive reform program should be prepared in the parapublic sector. Its main components should be: (i) introduction of strict cost control and accounting procedures; (ii) reduction of budgetary subsidies; (iii) adjustment of user fees; (iv) rehabilitation of equipment and machinery, and (v) training programs for managers. Private management arrangements in public enterprises should be intensified and periodically reviewed, and the Govern- ment should continue its re-privatization policy.

5. Highest priority should be given to regular and timely external debt servicing in order to restore the CAR's financial credibility with foreign donors. The Government should contract foreign - 79 -

debts only on highly concessionary terms and efforts should be made to negotiate longer repayment terms on the existing public debt during multilateral and bilateral debt rescheduling.

Macroeconomic Adjustment Scenario 177. Gross domesticproduct has been projectedby the Bank to grow at an averageannual rate of 3.7% between 1985 and 1990, and 4.2% during 1985-95,compared to less than half a percentbetween 1980-85. The projected growth rates imply an increasein per capitaincome, since the populationhas been projectedto grow at an averageannual rate of 2.9% between 1985 and 1995. Consequently,per capita incomehas been projected to rise by 1.3% on averagebetween 1985 and 1995. Privateconsumption has been projectedto grow at an annual averagerate of 2.9% during the second half of the 1980s and 3.7% between 1985 and 1995,vhile governmentconsumption will have to be limited to an averageannual growthof less than one percent. Information on income distribution between rural and urban population is lacking but the projections imply that the rural population will enjoy higher consumption growth rates than the urban population due to fiscal and sectoral policies over the next few years. The projected GDP growth rates are based on the following assumptions:

(a) investment has been projected to almost double from an average 8.1% of GDP in the early 1980s to 15.7% in 1990, and 17% by 1995;

(b) The capital/output ratio is expected to improve significantly. In order to raise the efficiency of investments the share of projects in the productive sectors will have to rise relative to that in infrastructure, and projects will have to be prepared and implemented more efficiently, including repair and maintenance of existin& facilities;

(c) in general,foreign financing is not expectedto become a constraint to the projected investment volume. Foreign official and private investment financing has been projected to triple between 1985 and 1995, and to !.ncrease by approximately 60X between 1985 and 1990; and (d) exportsin real termshave been projectedto grow at an average annualrate of almost 52 between 1985 and 1990 and 4.5% during 1985-95,compared to less than half a percentduring 1980-84,or 4.3% during 1970-79. Real importshave been projectedto in- creaseat averageannual rates of 3.4Z during 1985-90,and 3.5Z between1985 and 1995, comparedwith less than one percent between1970 and 1979. As a result,the CAR's currentaccount deficit would decline from 17% of GDP during 1980-84 to about 13% in 1990 and 11% in 1995. - 80 -

Table 6.1: CAR - Projections of GDP Expenditures, 1985-95 (in billions of CFAF)

Adjustment Scenario Pessimistic Trend Scenario 1985 1981 1990 1995 1985 1987 1990 1995

at current prices at current prices Consumption 285.5 361.5 502.5 875.2 292.6 366.9 512.8 824.2 Gross Domestic Investment 45.4 51.8 80.9 158.3 36.0 43.1 62.8 110.0 Exports of Goods & NFS 74.0 91.7 125.8 193.9 74.0 86.4 100.8 148.8 less Imports of Goods & NFS 114.2 142.1 194.4 296.2 114.2 142.1 194.4 296.2

GDP at Market Price 290.7 362.9 514.7 931.3 288.4 354.3 482.0 786.8

at constant 1977 prices at constant 1977 prices

Consumption I16.1 120.4 131.6 160.6 116.1 121.5 133.4 15P.4 Gross Domestic Investment 15.4 18.4 22.8 31.1 14.5 15.3 17.7 21.6 Exports of Goods & NFS 43.2 47.3 54.3 67.1 43.2 46.3 48.3 50.4 less Imports of Goods & NFS 53.8 57.3 63.5 75.9 53.8 57.3 63.5 75.° GDP at Market Price 120.9 128.9 145.1 182.9 120.0 125.8 135.9 154.5

GDP deflator (C977- 100) 240.3 281.6 354.7 509.1 240.3 281.6 354.7 509.1 Average GDP growth rate 2.6 3.3 4.2 5.2 2.6 2.4 2.6 2.6

Source: Central African authorities and staff estimates.

178. The substantial increase in investment projected in the second balf o'J the 1980s implies that: (i) both the Government and the private sector will be able to identify and implement a large investment program; afnr (ii, the required financing can be mobilized. The CAR's large develop- me&nt needs, on the one hand, and its good resource base, on the otner hand, have alloved the Governwent to present an increasing number of sound projects to foreign donors and private investors over the past few years. While it is true that in the past the authorities or foreign Investors have at times proposed unsound and ill-prepared projects, our scenario is based on the assumption that the Government will succeed in overcoming this problem to a significant extent in the future. The technical assistance provided by the Bank and other donors are expected to accelerate project preparation and implementation.

179. The Government's fiscal policy has the most important Impact on the availability and volume of investment financLnp. Significant growth of public savings after d-bt service payments are a precondition for raising total investment expenditure and achieving economic. growth over the next few years. They would enable the Government to finance part of public investments, and induce additional foreign-financed investment because of the positive effect budgetary surpluses would have on foreign donors and - 81 - private investors. Part of the budgetary support currently provided by France might then be channeled to more directly productive purposes.

180. The following crucial parameters will be governed by the Govern- ment's fiscal policy towards achieving public savings: (i) budgetary revenue; (ii) the civil servantswage bill; and (iII) the public debt service. While all three of these parameters are amenable to policy actions with different degrees of efficiency,and possibly in the listed order, it is the wage bill of the public administration which offers the largestscope of impacton the size of public savings.

181. Projectionsof governmentsavings in the second half of the 1980s and early 1990s are based on the assumptionof steadilygrowing budget revenues,only slowly rising nominalwage bills after 1985 and substantial debt relieffor the rest of the decade. Budgetaryrevenues which have been projectedto continueto grow due to the implementationof a tax reformand substantialimprovements in tax collection,are expectedto grow slightly faster than GDP in nominal terms during 1985-95. The civil servants' nominalwage bill has been projected to grow only about half as fast as nominal GDP during 1985-95 and would decline from almost 64% of current expenditure in 1980 to 62Z in 1990 and 53% in 1995. Thls can only be achieved if the Government's recent decree to limit the hiring of university graduates into the civil service will be enforced. The CAR's projected debt service payments. though expected to remain high over the next few years, have been projected to decline from 242 of budgetaryrevenue in 1985 to 18% in 1990 and 13% in 1995, due to assumeddebt relief and higher budgetaryrevenues. Increasedbudgetary revenues and stabilizedcurrent expenditure would result in a volume of government savings, which by 1995 could finance about one fifth of projected public investment. - 82 -

Table 6.2: CAR - Projections of Public Finances, 1985-95

(in billions of current CFAF)

Adjustment Scenario Pessimistic Trend Scenario _95 1987 199V 1991985 1987 1990 1995

Budgetary Revem" 42.4 50.1 68.3 140.0 42.4 48.0 62.0 90.0 Current Expenditure a/ 38.5 43.3 51.5 90.0 38.5 48.6 63.0 91.5 of which: Wages & Silaries (23.8) (26.0) (32.0) (48.0) (23.8) (30.9) (39.7) (57.4) Budgetary Savings a/ 3.9 6.8 16.8 50.0 3.9 -0.6 -1_0 -L-5 Other Public Savis bJ 0.6 0.9 1.2 2.4 0.6 -0.5 -1.2 -2.0 Public Savings aJ 77 IR" 3rz Z.3S less Debt Service c/ -10.1 -10.2 -12.4. -18.0 -15.2 -12.8 -14.0 -20.0 Investable Surplus -5.6 -2.5 5.6 34.4 -10.7 -13.9 -16.2 -23.5

MemorandumItems (in Percent) (in Peroent) Budgetary Revenue/GDP 14.6 13.8 13.3 15.0 14.6 13.2 12.0 9.7 Debt Service/Budgetary Revenue 23.8 20.3 18.2 12.9 35.8 26.7 22.6 22.2 Wages & Salaries/ Current Expenditures a/ 61.8 60.0 62.1 53.3 61.8 63.6 63.0 62.7

/ Excluding interest payments on public debt. */ Public and mixd enterprises savings. i/Assuming debt relief durIng 1985-90.

Source: Central African authorities and staff estinates. - 83 -

Table 6.3: CAR - Investm ent Financing, 1980-95 L

(in billions of current CFAF)

1980 1983 1984 1985 1987 1990 1995 - Actuals --- Projections -- --

Total Investment 11.8 28.6 30.9 45.4 51.8 80.9 158.3

Public Investment 8.3 22.9 24.7 36.3 40.4 56.6 107.6 Private Investment 3.5 5.7 6.18 9.1 11.4 24.3 50.7 Financing

Domestic Public Capital Expenditure 1.0 3.8 3.9 4.5 6.0 10.5 30.0 M & L Term Loans (disbursements) 3.5 11.3 12.4 23.4 23.6 30.0 66.0 Investmoent Grants 3.8 7.7 7.9 8.9 10.1 18.0 26.0 Private Foreign Investment 2.6 5.0 5.1 5.8 8.3 14.4 22.0 Private Domestic Investment 0.9 0.8 1.6 2.8 3.8 8.0 14.3

11 Flnancing amounts do not always coincide with corresponding data in the balance of payments. Investment grants and private domestic investment expenditures are staff estimates.

Source: Central African authorities and staff estimates.

182. Public expenditure control through a reduction of the civil servants' wage bill should be achieved by further reducing the number of civil servants and reassigning them from Bangui to secondary cities and rural areas where significantly lover salary levels would not result in declined standards of living. Such a policy can, however, only succeed if employment opportunities in agriculture and manufacturing can be created at a high rate over the next decade. The scenario presented here assumes average annual increases in agricultural output of 5.1% between 1985 and 1995 compared to only 1.6% during 1975-85, and of 3% in industry compared to 1.3% over the same period. A lack of statistical data on actual and projected unemployment, or the labor intensity of the various agricultural and manufacturing activities to be promoted, prevents us from estimating the number of new jobs which would need to be created over the next ten years in order to provide young Central Africans with employment and reduce the pressure on the civil service. However, it is clear that the high growth rates in agriculture and manufacturing which are required to absorb new entrants into the job market can only be achieved with high investment rates. If the Government continues to succeed in stabilizing current expenditure, foreign donors should increase their financial and technical assistance to the CAR so that the required investment levels can be realized. 183. The CAR's balance of payments situation has been projected to improve over the next decade. The improvement is expected to result from - 84 - the Government's export promotion policies. an increased control of diamond exports and improved iternational transport routes. The projected rise in imports reflects the expected growth of imported capital and equipment goods associated with the projected rise of investment aTd consumption in connection with the projected GDP growth. The projected improvement of the current account assime that no further depreciation of the CFA franc vis- a-vIs the US dollar. which amounted to 107% between 1980 and 1984, will take place for the rest of the decede. The Government's export promotion efforts are expected to result in a reduction of the resource gap over the next two.years, but the projected slowing down of export growth and acceleration of import growth towards the end of,the decade are likely to result in no more than marginal improvement of the CAR's resource gW as a percentage of GDP by 1995. The projected capital inflows assume, however, that the CAR's overall baLance of payment deficits and financing gaps will decline over the next few years and that the country vill be able to accumLlate foreign exchange reserves between 1985 and 1995.

Table 6.4: CAR- P2source Gap Projections, 1980-95 (in billions of CFAFat constant 1977 prices)

1980 1983 1984 1985 1987 1990 1995 -- …Actuals ------Projections

GDP a/ 313.5 104.5 110.8 313.3 I19.3 132.5 166.1 Consumption 126.9 110.2 114.7 116.1 120.4 131.6 W.60.6 DonesticSavings a/ -13.4 -5.7 -;.9 -2.8 -1.2 0.9 5.5 Investment 8.3 13.6 15.0 15.4 18.4 22.8 31.1 PesourceGap a -21.7 -19.3 -18.9 -18.2 -19.6 -21.9 -25.6 Exports(G+NFS) a1 34.2 30.5 32.9 35.6 37.7 41.6 50.3 I-mot (GiNFS)- 55.9 49.8 51.9 53.8 57.3 63.5 75.8 ResourceGap a/ -21.7 -19.3 -19.0 -18.8 -19.6 -21.9 -25.6 Ratios (in percent) ResourceGap/GOP 19.1 18.5 17.1 16.1 16.4 16.5 15.4 Consumption/GDP 211.8 105.4 103.5 102.5 101.0 99.3 96.7 Investment/g)P 7.3 13.0 13.5 13.6 15.4 17.2 18.7 Exports/GDP 30.1 29.2 29.7 31.4 31.6 31.4 30.3 Imports/GDP 49.3 47.6 46.8 47.5 48.0 47.9 45.7 ai Adjustedfor changesin terms of trade by deflating exportswith importprices. Source: Central African authorities andstaff estimates.

Pessimi tic Scenario

184. The CAR's return to a path of economic growth, vhich would guarantee a sustainable increase in per capita incomes in the medium-term, - 85 - is likely to be realized only if the Government takes the required actions (paras. 175 and 176) without delay. Since the decisions to be made are likely to have adverse effects on vested Interest groups. the Government may be tempted to postpone the preparation and implementation of a sound investment and policy action program. In this case, the Government should be fully aware that there are no self-correcting mechnIsms vithin the economy which would operate towards improving economic performance and overcoming the CAR's current structural imbalances.

185. A consolidation of the CAR's public finances is a crucial precondition for reversing the current economic decline. If the Government does not succeed in raising tax revenues,controlling current expenditure. and rescheduling the country's external debt, public savlngs can be expected to become negative again in the second half of the 1980s. which would prevent the state from making any contribution to development expenditures. Continued budgetary deficits would have important consequences for the CAR's investment program and growth prospects. First. part of the CAR's total foreign aid would have to be channeled to consumution rather tban productive purposes. Second, the total amount of foreign aid would be considerably smaller than assumed in the adjustment scenario, since foreign donors and private investors are not likely to come forward with the funds needed for the CAR's economic reconstruction if the country's own domestic savings continue to be Insufficient to finance even most basic investments, recurrent costs and maintenance of existing facilities. Investment would stagnateat about 12% of (DP during 1985-1990, and rise to only 14% by 1995, comparedto 16% in 1990 and 17% by 1985 in the adjustmentscenario. The uncontrolled development scenario would thus result in a steady decline of per capita incom.t between 1985 and 1995. - 86 -

STATISTICALAPPENDIX

The data presented and analyzed in this report should be read with caution, since statistical information is very weak in all arEss. Shortcomings in the collection, processing and presentation of data are particularly evident for food crop production and agricultural yields and prices. There is no systematic collection of data on rural producer and consuner prices, nor on prices in secondary towns. The lack of reliable data on agricultural and manufacturing output, employment, investment and forelgn trade continues to create considerable difficulties for the development of national accounts. The latter are therefore characterized by serious inconsistencies and anoaalies. The Government has begun to Improve the country's statistical.data base with technical assistance from the international cou_unity. - 87 -

CEHTAL AUICAN REPbC

Cbuntry Economic Memorandum Statistical Avlpedix

Table of Conterts

Title

Table SA 1 NationaL Accounts Sumary, 1975-1965, Current CPA Francs

Table Sk 2 National Accounts SUDMary, 1975-1985, Constant 1977 US Dollars Table SI 3 Balance of Payments, 1975-1985, Current US Dollars

Table SI 4 Balance of Payments, 1971-85, Current CFA Francs

Table SI 5 CDP Expenditure and Origin Account at Current and Constant Values, 1970-85

Table SA 6 Gross Domestic Product by Origin at Constant 1977 Prices, 1970-85 Table SA 7 Total Populatin by Sex, 1950-1980

Table Sk 8 Population Projections and Demographie Indicators, 1980-2035

Table 5S 9 : Urban and Rural Population, 1975

Table SA 10 : Populaton Density, 1975

Table SA 11 : Estimated Agricultural Production of Principal Crops, 1970-84 Toble SA 12 : Estimated Crop Areas, 1970-84

Table SI 13 : Estimted Average Yields of Principal Export Crops, 1970-84

Table SA 14 : Official Producer Prices of Selected Aricultural Crops, 1970-85

Table SA 15 : Esttimted Nbcbers of Cattle, 17O-84

Table Sk 16 : Production and Exports of Timber nd Derived Products, 1970-84

Table SA 17 : Official Production and Exports of Diamonds, 1970-85

Table SA 18 : Annual Diamond Production, 1931 - 1984 Table SA 19 : Raw Diamonds Exports, 1982

Table SA 20 : Diamonds Cut by the National Diamond Office, 1975-85 Figure SAl Diamond Marketing Channels

Table SI 212 Production and Exports of Gold, 1980-85

Table SA 22 Production and Consumption of EnerM', 1976-84 Table SA 23 Consumption and Price Structure of Petroleum Products, 1980-B4

Table SI 2'.: Road Network, 1984 Table SA 25 River Transport, 1978-84 Table Sk 26 Air Traffic, 1976-84

Table SI 27 Wholesale and Retail Price Indices, 1978-84 -88-

Table SA 28 : Mi mn--Wages, 1970-81

Table SA 29 : Parapublic Enterprises

Table SA 30 : State and Mixed Enterprises, 1982 Table SA 31 : Budget of the Caisse de Stabilisation et de P6rfquation (CAISIAB), 1978-83

Table SA 32 : Revenues and Expenditures of the Social Security Office (OCSS), 1978-84

Table SA 33 : Manufacturg Capacity, 1976-84

Table SA 31a: Manufacturing Production, 1976-84

Table SA 35 : Export Detail, 1975-1995

Table SA 36 : Import Detail, 1975-1995

Table SA 37 : Direction of Trade, 1971-82 Chart SA3. Direction of Trade 197 and 1982

Table SA 38 : Invest ent Program, 1980-85

Table SA 39 : Investment Program, Grants and Loans, 1980-85

Table SA 40 : Investment Programs and Actual Investment Expenditures, 1971-85

Table SA 41 : External Public Debt by Type of Creditor, as of December 31, 1984

Table SA 42 : Service Payments, Commitments, and Disbursements of Suppliers Credits

Table SA 43 : Service Payments, Commitments, and Disbursements of Financial Institutions

Table SA 44 : Service Payments, Commitments, and Disbursements of IDA

Table SA 45 : Service Payments, Cormitments, and Disbursements of Hultilateral Loan

Table SA 46 : Service Payments, Comitments, and Disbursements of Bilateral Loans Table SA 47 : Service Payments, Commitments, Disbursements and Outstanding Amounts of External Public Debt, Projections - 89 -

Tale SA Is CMR- NATIOGALIICCUIIT 511RY

lie billion of CFAFat carrentprices)

1975 1976 1977 7m 1979 1930 1991 1932 19B3 1994 199S P01.

1. GROSSDONESTIC PROOUCT 90.6 107.0 123.5 136.3 150.9 169.4 I11L. 216.5 230.2 259.9 290.7

2. RESOURCEGAP(1- 15.B 8.5 12.5 15.9 17.1 21.0 20.0 42.3 42. 40.3 40.2 3. IKPURTSGW.FS) 34.2 33.9 45.2 49.6 52.3 72.0 9.5 92.3 100.7 105.5 114.2 4. EIPORTS(1FS) 1B.4 25.4 32.7 33.7 35.2 44.0 48.5 50.0 5B.0 6S.2 74.0

-. TOTALEIPEN0I1U7BS 96.4 115.5 136.0 152.2 148.0 196.4 208.8 259.9 272.9 300.2 330.9

6. COISUHPTION 95.2 102.6 121.6 137.2 153.4 1B4.6 192.3 241.3 244.3 269.3 295.5 7. ENERAL6DVERNENT 13.9 14.6 15.4 19.4 23.3 25.5 28.3 33.3 30.4 33.0 35.6 9. PRIVATE 71.3 88.0 106.2 117.8 130.1 159.1 164.0 209.0 213.9 236.3 249.9

9. IVESTNENT 11.2 12.9 14.4 15.0 14.6 11.S 16.5 17.5 29.4 30.9 45.4

10. WmESTTCSAVING -4.6 4.4 1.9 -0.9 -2.S -16.2 -3.5 -24.8 -14.1 -9.4 5.2 11. NETFACTOR INCOME -0.1 0.3 0.1 0.1 0.2 0.5 1.3 5.4 5.1 4.6 5.6 12. CURRENITTRANSFES -0.4 -0.6 -0.8 -1.0 -2.6 -4.0 -3.9 -5.6 -5.7 -5.7 -5.8 13. NATIONALSAVIN6 -5.1 4.1 1.2 -1.1 -4.9 -19.7 -6.0 -25.0 -14.7 -10.5 5.0

AVERAGEEXCAIIGE RATES: 14. CFAFPER US 214.32 239.98 24.67 225.66 212.72 211.28 271.73 323.f1 391.06 436.96 400.00 15. CFAFPER SIR 260.22 275.91 285.76 272.29 264.79 287.99 334.52 370.92 436.97 470.11 47327

Souces:Central African authorities aod staff estimates. - 90 -

TabllSA 2: CAR- NATIONALACCIUTS SUMMARY

(in millionc of UShllars at constant 1977prices)

1975 1976 1977 2978 17 1990 1931 1932 1983 1984 195 PRDJ.

1. GROSSDOIESTIC PRCDDCT 464.0 483.6 502.7 516.1 502.3 483.2 472.2 474.2 463.2 479.9 492.1 2. TERMSOF TRADE -05.0 -30.9 0.0 -6.9 -12.6 -21.3 -23.4 -27.8 -30.4 -31.5 -31.2 3. GROSSDOMESTIC INCOME 379.0 452.7 502.7 509.2 419.7 461.9 443.8 446.4 432.8 441.4 460.9

4. RESCRCE6AP (5-6) 72.8 31.6 50.9 67.1 59.0 88.S 56.9 78.3 71.1 79.5 74.4 5. INPORTS(G+NFS) 157.5 145.7 184.0 190.1 179.9 227.5 195.0 208.8 202.7 211.3 219.0 6. CPPACITYTOINPORT 94.7 109.1 133.1 122.9 120.9 139.1 139.1 134.5 131.6 131.7 144.6 7. EIPORMTSIGFSI 169.7 140.0 133.1 129.8 133.5 160.4 166.5 138.3 162.0 163.2 175.8

9. TOTALEXPENDITURES 451.8 499.3 553.6 576.4 549.7 550.3 500.7 524.7 503.9 527.9 535.3

9. CONIISTION 397.3 431.1 495.0 519.4 500.3 516.5 459.6 487.2 449.6 466.9 472.6 10. GENERALG61EIUINT 68.0 65.9 62.7 73.3 77.7 73.3 70.9 66.8 57.0 59.4 60.2 11. PRIVATE 329.3 363.1 432.3 446.1 422.5 443.3 38B.7 420.5 391.6 407.5 412.3

12. INVESTNENT 54.5 50.2 58.6 57.0 48.4 33.8 41.1 37.4 S5.4 61.1 62.7

13. DONESTICSAWIM -18.2 21.6 7.7 -10.2 -10.6 -54.7 -15.8 -40.9 -15.8 -18.5 -11.7 14. NETFACTOR INCOME -0.6 1.4 0.4 0.4 0.7 1.4 3.3 11.8 10.3 8.5 9.5 15. CURRENTTRANSFERS -2.3 -2.7 -3.3 -3.8 -8.7 -11.5 -9.5 -12.3 -11.5 -10.5 -9.8 16. NATIONALSAYIN6 -21.1 20.3 4.9 -13.6 -18.6 .7 -22.0 -41.3 -17.0 -20.5 -12.0

CF0FDEFALATORS 11977=100) 17. BROSSWDOESTIC PRODUCT 70.70 90.07 100.00 107.49 122.29 141.87 162.76 185.94 202.29 220.44 240.45 Is. INPIIRTS(G+NFSI M.E37 94.69 100.00 106.21 119.33 129.80 143.01 179.92 202.21 203.29 212.27 19. EXPORTS6+8FWS 44.12 73.84 100.00 105.64 107.32 111.68 119.58 128.53 145.73 162.59 171.30 20. TOTALEXPENDITIMES 96.95 96.09 100.00 107.49 124.63 145.27. 169.76 200.78 220.44 231.46 251.63 21. GOVERNMENTCONSUMPTION 83.23 90.12 100.00 107.78 121.99 141.67 162.64 203.05 217.14 226.03 240.54 22. PRIVATECONSUMPTION *8.13 99.10 100.00 107.4 125.34 146.10 171.73 201.36 22235 236.06 246.69 23. INVESTMEIT 83.59 90.21 100.00 107.14 122.69 142.17 163.37 190.22 210.29 206.00 294.81

24. EXCHANGERATEINDEX 114.6 102.9 100.0 108.9 115.5 116.3 90.4 74.8 64.5 56.2 51.2 (UScents pr CFPF)

Sources: Central AfricanatHarities nd staff estintes. - 91 -

Tble SQ3s CAR- 30ACE OFPATNBM

(in uillios of UShilars at currMt priceu)

ITEN 17 1974 1977 17 197b 19 191 13 1 1984 1595 PMU.

1. EPORTS(S#NFSI 35.9 106.4 133.1 149.3 145.5 26.3 178.5 152.2 152.2 149.2 154.2 2. NERHMOISE(FED 57.9 83.7 114.4 123.2 131.2 154.8 127.0 112.4 114.3 114.7 113.5 3. MM-FAC SERVICES 23.0 22.7 14.7 24.1 34.3 53.5 51.5 39.4 36.0 34.4 35.4

4. IZWRTS(6.+NFS 159.6 141.9 194.0 219.8 245.9 340.8 252.1 210.9 214.3 241.4 237.9 5. NEROMEISE(FED 83.1 77.4 103.3 119.2 139.2 194.9 156.0 2U.5 155.1 143.3 145.4 6. NUN-FACSRSERVICES 74.5 64.5 80.2 100.6 106.7 143.9 94.1 119.4 109.2 98.2 92.5

7. RESOURESEUANCE -73.7 -35.5 -50.9 -70.5 40.4 -132.5 -73.4 -123.7 -112.1 i2.2 -3.8

9. METFACTDR INCIIE -0.5 1.1 0.4 0.4 0.9 2.4 4.8 16.4 13.4 10.5 11.7 9. FACTORRECEIPTS 2.8 2.9 2.3 2.7 2.8 4.3 3.1 22.8 22.0 13.3 26.4 10. FACIORPATNEIITS 3.3 1.9 2.4 2.2 1.9 1.9 3.3 6.4 8.7 7.8 3.8 ii. ilILT INTERESTPRID INCLUDIEFIND DCIAIES) (2.8) (1.2) (2.01 (2.2) 11.43 (1.43 (2.23 14.0) (7.31 16.0 (3.11

12.NET CUNT TRNSFERS -1.9 -1.4 -3.9 -4.4 -12.2 -18.9 -14.0 -17.0 -15.0 -13.0 -12.1 13. lRANSFERRECEIPTS 3.4 8.2 3.1 7.1 11.3 5.2 52 3.7 3.4 3.0 2.7 14. TIRASFERPATIENTS 10.3 9.6 12.0 11.5 23.5 24.1 19.1 20.7 18.4 14.0 14.8

15. DRENTDALINCE -76.1 -3SB -54.4 -74.4 -91.7 -149.1 -82.8 -129.1 -113.4 -94.7 -3.2

H & LT CAPITAL151.5 16. DIRECTINVESTIENT 5.6 3.8 3.7 13.3 34.3 4.7 7.0 7.4 7.9 8.0 8.3 17. OFFICIALGRANT 40.1 45.2 35.4 48.7 91.2 101.3 82.1 17.3 1B.2 57.2 52.1

18. NETH & LT LONS(385) 9.8 3.1 18.4 25.9 12.3 39.6 31.5 16.7 21.7 27.3 23.8 19. DISPESEIITS 13.3 10.0 21.3 23.4 13.1 40.7 34.3 19.0 32.9 33.7 42.1 20. REPAYMETS -3.6 -1.9 -2.9 -2.4 -0.3 -1.1 -2.3 -2.3 -11.2 -4.4 -13.3

21. OTHERN & LT (NET) 3.7 1.7 1.6 1.3 2.3 12.8 1.8 2.4 3.1 2.3 1.3

22. NETCREDIT FRIN INIF 2.3 5.9 0.0 -0.9 -3.3 -0.9 17.7 2.1 4.5 -1.4 0.4 23. DIS8URSEIETS 2.3 7.5 0.0 0.0 7.1 20.4 2.7 4.7 5.0 10.4 24. REPAYMENTS -1.6 -0.9 -3.3 -3.5 -2.9 -0.6 -0.3 -4.4 -10.0

25. NETSHORT-IEM CPITAL 7.9 -10.0 10.2 -3.4 -1.4 9.0 -4.8 8.2 -2.6 2.7 2.9

24. CAPITALFLOIS EI 2.8 3.3 1.8 8.2 6.3 7.9

27. ERRORS& ONISSIINS 7.0 -3.4 -14.5 -11.6 -37.7 -21.2 -59.1 -35.9 -4.9 2.2 -7.4

28. CHASEIN RESERVELEVEL -0.9 -15.5 -0.4 11.1 -9.9 0.5 6.3 32.4 B.9 -11.0 -2.1 (- indicates increaseD

LSrces: Central African authwritius an staff estims. - 92 -

Table U 4. CM - R FAV P61011,1W71I

fin billimn of cruat CHFI5

ITEN MI 1m 17& n n alws non ite 191t 132 1313 m914 in PM.

EXFIRTS(UWFS2 17.1 11.4 254 32.7 7 32 44.0 41.5 50.0 3.6 65.2 74.0 NERCIIIE (FIll 3. 12.4 23.0 21. 27.6 27.9 32.7 34.5 37.0 44.3 1.1 56.9 lN-FACTIIR1IC5B 3.2 6.0 LI 4.1 5.9 7.3 32.3 14.0 13.0 13.7 15.1 *'.1

I IORTU6I553 22.2 34.2 339 45.2 49.6 52 72.0 U.5 n2.3 10.7 265.5 314.2 ENOIIUAISE(FPU 13.3 17.1 18.5 255 219 29.6 41.6 42.4 53.4 D.1 62.6 9.1 N-fSlE SEPVICES 7.4 21.4 1L4 19.7 22.7 22.7 30.4 2L. 21.9 4.6 42.9 44.4

REUIECE MCE -4.2 -15.1 -3.5 -12.5 -IL9 -17.1 -21.6 -20.0 -42.3 -42.7 -4.3 4 .2

NETFECTE IENE 0.1 -0.1 0.3 0.1 0.1 0.2 0.5 1.3 5.6 5.1 4.6 L6 FKl RECEIPTS 0.5 0.6 0.7 0.7 3. 0.6 0.9 2.2 7.5 1.4 1.0 9.9 FACITORP611 0.4 0.7 0.4 0.6 0.5 0.4 0.4 .9 2.1 3.3 3.4 4.2 CHT II uES PAID INELIJ FED uNSsi (6.2 10.63 40.33 10.51 4.5 I.3L 10.33 0.63 12.31 (2.33 12.93 (3.81

METOlUET lEWIS -0.3 -. 4 -0.6 -4. -2.0 -2. -4.0 -I. -5.6 -57 -5.7 -LU TEUFERREMIPTS 1.1 2.3 2.3 1.7 2.6 2.4 1.1 1.4 1.2 3.3 2.3 1.3 TRIl PSH TIS 1.9 2.2 24 2 2.4 Le0 5.2 L2 6.3 7.0 7.0 7.1

Cit9ImT UILM -4.3 -16.3 4.3 -13.2 -16.1 -19.5 -31.5 -32.5 -42.5 -4.3 -41.4 -4 s I LTCAPITAL IIFU5 DIEIT IEBlEUTT 0.2 1.2 .9 0.9 L0 7.3 1.0 1.9 2.5 3.0 3.5 4.0 FFiCIALEUT L9 3.6 10.6 37 11.0 19.4 21.4 22 21.7 2L0 25.0 3LO

NETAUA L LIIIE tSI) 0.7 2.1 1.9 4.5 5.6 2.7 3.4 LI 5.5 L3 11.9 I2J. -IISNRUPIUS 1.1 2.9 2.4 5.2 L4 2.3 3.6 9.3 6.2 12.5 14.7 21.2 EPDYIETS -0.4 4.3 -0.5 -0.7 -0.6 -0.1 -0.2 -4.3 -0.3 -4.3 -2.3 -6.4

OTHERNL LT (tETI 1.1 0.3 0.4 0.4 0.3 L0 2.7 0.5 0.3 1.2 0.3 0.

METCRED1T FUN INF 0.1 1.8 -0.2 -0.7 -0.2 4.3 0.7 1.7 1.6 0.2 DIUSEsITS 0.6 1. 1.6 LI 0.9 I.E 2.2 5.0 EMIIENTS -0.2 -3.7 -1.3 -4.3 -4.2 -0.1 -2.3 -4.9

METSIT-TEII CAPITAL -1.0 1.7 -2.4 2.5 -1.9 -0.3 2.9 -LX 2.7 -1.0 1.2 1.4

CAP17ALFLS NE 0.5 0.1 .I 4.5 2.7 LI 3.4 Sao 0.5 4.4 0.7 0.5 EDCIMEEPTE SUREINA 2.7 2.6 3.4 | - CI

EUROSa EIssII 1.12 .5 -0.9 -. 7 -3.7 -3.0 -4.5 -£4.1 -11.3 -2.9 1.0 -L

00 11 PEER LEVEL -. 6 -0.2 -3.7 -0.1 2.5 -L.I 6.1 2.3 10.7 L4 -4.3 -1.0 (- isudicatniKrMul

METFlElSM oUasM -3. 4.3 0.9 -1.1 -2.5 34 6.2 L4 5.4 7.0 13.2 14.7 NM355ITI IIIUIIL RIESm 0.1 0. 2.1 .3 5.4 9.4 11.6 13.3 15.2 17.3 24.5 27.1 EIVIIILSITN IH2W03S 0.1 0.3 0.7 1.0 1.3 2.2 1.9 3.3 2.0 Li 2.3 L1

Sfrer: Ctral Africa mthritin ud stff ntitsn. - 93 -

Tale S 5 CMt- IN E1lIT 1E AMO1RI1I £C21 Al C21tT AU CUN3AITtiE!, 597145

(in bIllIm'o ofsCFAF

17 5975 1971 1977 2973 1979 19 1912 13 ms 19KM I2S P9.

UKIWTUE at currat price

TOIALCO IT5U 47.9 85.2 102.1 121.1 537.2 153.4 154.4 192.3 241.3 244.3 269.3 26.5 MlvZiiTECUEPTIP 37.4 71.3 16.0 104.2 117.1 130.1 159.1 244.0 206.0 213.9 213 209.9 VIf1hNTCO TITIU 10.5 23.9 14.1 15.4 19.4 23. 25.5 3.3 33.3 30.4 33.0 35.6 3 55lESTlCISTIETKT 9.4 11.2 12.9 14.4 25.4 14.1 11.1 14.5 11.5 2L. 30.9 4 ElIOTSISI12 1ELY 11.4 25.4 32.7 33.7 35.2 44.0 45.5 50.0 51.0 5.2 74.0 Le ISF1 (1645 212. 34.2 33.9 4L2 9.6 523 72.0 U.S 92.3 102.7 1O.! 114.2 DPIT NiiET FRIES 49.7 N.4 107.0 1235 136.3 23.9 1*0.4 216.8 216.5 230.2 25.9 210.7 at cstaint 1977prme MALfITIOI 97.5 91.6 105.9 121. 127.6 122.9 126.9 112.9 119.7 220.2 114.7 [5L. FI-ITE IIETIUK .3 N0.Y B1.7 2l042 I9.6 I20 11.9 3 .5 503.3 94.2 100.1 101.3 IMEIST TIm 22.2 16.7 14.2 15.4 2L.0 1.1 16.0 17.4 16.4 14.0 14.4 24.6 011333L I NEKIMT 23.9 23.4 14.3 14.4 14.0 11.9 6.3 10.1 9.2 13. 15.0 55.4 EUNTStPlfD 22.5 41.1 34.4 32.7 35.9 32.1 9.4 40.9 36. 39.1 40.1 43.2 L SF137s fowl) 41.6 35.7 35.3 45.2 46.7 44.2 l.9 47.9 51.3 49.3 52.9 I3. MPPN IMET FRICES IOL3 114.4 IIL I23.5 12MI 223.4 223.7 114.0 116.5 1123. 117.9 122.9

NOW131E_it =MITPATE 2.2 4.2 4.0 2.7 -2.7 -3.1 -2.3 0.4 -2.3 3.1 2.5 -w16165(Vt-UAIO at cwrnt grace

AKICILO 26.1 21.5 40.1 44. 51.3 *5.1 6.4 70.5 75.4i .s 9.5 *0L I IiUSIIN 12.2 17.3 20.5 24.9 2LI 3L2 31.6 3S.6 41.6 43.0 49.5 54.5 NKlEIN 7.3 7.4 L3 9.9 21.3 5LO 13.1 11.5 12.5 5s3e 14.4 IL2 2UNLF2IN1U 3.2 5.7 6.2 L7 20.0 51.6 21.4 13.2 26.9 17.2 25.9 2L3 IER It EULECICITY 0.4 0.7 0.9 L9 1.0 1.0 1.2 1.9 2.5 L5 3.5 4. CEI CiUCION& PELIC M 1.3 3.5 4.4 5.3 5.7 L4 L. 7.0 9.4 16.3 12.5 14.1 ESEIES 20.9 34.3 40.1 45.7 49.0 54. U3.3 73.4 15.3 133 91.5 122.4 *1i3EE 7.7 14.5 54.1 17.5 IL4 21.2 24.6 27.3 32.4 3L0 40.4 4L7 TIhIU I TEtLElICW1ID 2.5 4.2 5.2 5.1 4.7 4.4 5.4 4.5 1.3 LI 1.2 11.7 POLI5hEICIES 7.7 52.3 14.1 4.9 29.3 2L0 25.4 30.9 35.3 35L0 3.4 41.9 FRIVITEKIVICES 3.0 4.3 1.2 4.2 6.6 7.2 7.7 3.6 9.3 3.5 9.3 IL2 MP IT FCIG EDST 49.7 16.4 101.7 117.4 229.1 142.3 153.5 I77.7 202. 214.3 243.5 273.2 1I1617 TA1ESLI SUIIES 3.3 6.2 7.2 L1 9.9 11.1 14.0 15.4 16.4 17.5

WIPAT HIWIE1 PICES 69.7 30.t 107.0 22L5 134.3 1530.92.4 IU.J 214.5 230.2 39.9 290.7 et censtat 1977rices AEICLTLK 0.0 44.5 44.0 44.3 61.3 47.4 46.9 44.1 43.3 46.3 50.6 52.1 I11253RY 23.1 22.e 20.3 24.9 24.4 24.7 25.0 23.0 22.1 24.1 24.3 25L N21i1 7.4 10.6 L5 9.9 50.3 9.! 10.1 10.1 9.5 9.5 9.7 9.1 IFACTURINI 11.3 4.3 7.0 3.7 9.2 1.4 3.2 7.4 7.0 1.1 7.2 7.3 mTERI asTRICmsc 0.4 0.3 0.8 0.9 0.9 3.9 0.9 0.1 0.3 0.5 0. L0 EItUCmiO a 13IC NowS 3.3 3.3 4.5 3.3 5.3 5.9 5.3 4.7 4.3 LI 7.0 7.1 SEKn 39.2 40.3 437 4S.7 tO 4L0 4t.5 42.5 42.0 39.4 37.4 31.5 0RCE3 16.0 IL! 17.4 17.5 17.2 15.1 15.2 17.2 17.0 15.4 13.4 14.1 WllRt A TEECIEUSICA11CO 4.2 4.2 5.0 5.1 5.7 5L3 5.4 4.6 4.3 4.5 5.1 5.S RELICSEVIES 24.0 IL2 15.3 16.9 12.0 15.3 14.9 14.9 14.4 14.4 ILI 14.0 UIVTE ENVICES 5.0 5.7 5. 4.2 4.1 4.1 4.0 5.1 5.4 LI 4.9 5.1 OP IT FCACMPT 102.3 1l0i4 110.5 117.4 129.7 115.3 113.4 111.4 152.4 I2.5 112.3 I517 11616 TI1ESLIS SII DIESI 7.2 5.3 4.1 7.1 LI 5.3 4.4 4.1 4.0 5.1 5.2

CIT N01 FRIES 302.3 224.0 113. 123.5 124. 12L34 1I3.7 114.0 114.5 ISLE 117.9 120.9

AO AN60AIIIIT 161E 2.2 4.2 3.9 2.7 -2.7 -3.3 -2.3 0.4 -L.3 L6 2. WISFCETUP IEFLAT119I7732001 43.4 70.7 90.2 100.0 107.5 122.3 141.9 162.3 5m5.9 20e3 223.! 240.3

Srcss Central fricma atharatiu ad stafl ntc ste. - 94 -

Tlae El h U2 - - .ITC OEtM1 31l ATCUBST 3977 PRIKE, If"

lie Wcmt ad prm raal

aws ma 1297 29N 1mi lam ma 1m I lip 21

to percto MIICliU1 39.2 39.0 31.7 37.9 .3L 3N.i 3.5 39.8 41.5 40.7 42.9 43.1 ImImUI 22.A 19.3 17.5 i@. 21 2L0 21.1 19.1 1L. 21.2 21.0 20.1 lKnE 7.2 9.J 7.2 LI L2 7.7 1.3 1.7 L2 1.3 L2 3.1 iCITUII 11.a 4.0 5.9 7.0 7.3 4. *.9 6.4i . 4.2 4.1 6.1 am 1 KNItlVltl 0.4 L7 0.7 0.7 7 e.7 0.e 0.7 .A 0.7 L.I 0.1 Comim=uca PLIC W 3.7 LJ SJ 4.3 4.6 4.8 4.9 4.1 4.1 LI L. 5.9 UsItE .3 354 i.1 37.0 3LS 34. ss.0 3L4 3LI 34. 31.7 31.1 t_cmo 15.4 14.5 14J 34.2 13.4 ILI 12.8 14.1 14.4 13.5 11.5 11.7 *_MP1Ta tiU CIIIU 4.1 L7 4.2 4.1 4.5 4.7 4.5 4.0 4.1 4.2 4.3 4.4 PULIC Yt1 13.7 2.2 12.9 13.7 22.4 22.4 12.4 I 12.5 12.7 11.7 11.a m1T1 9IK 4.9 L5 4.9 L. 4.8 4.9 5.1 5.L 4.1 4.2 4.2 4.2 W At FCl CRT 200.0 9.7 93.0 95. 94.4 9L4 L.5 94.2 5 9.5 957 9S.7 INIECI lIM LN UMIIEE 0.0 L3 7.0 4.9 5. L 4.5 LI LS L3. 4.3 4.3 w a N_T Iort 260.0 INO. 160.0 1e0.0 30e.0 16L0 30.0 360.0 10.0 Io 160.0 300.0 sap _mal prah rabs IWCUL.IE 2.2 L4 1.7 L2 -1.4 -1.5 -1.7 4.5 -4.1 9.3 3.0 IUIllB -1.0 -. 5 39.4 4. -43 3.2 -1 -4.e 9.3 2.9 1.5 filth 7.5 -19. 16.9 4.0 -LI 4.3 LI -40 0.0 2.9 1.2 1w11EU -9.7 2.9 24.3 4.3 -4.2 -2.4 -9.8 -5.4 1.4 1.5 1.3 aim *ZINIITVI L9 0. 12.5 4.0 -LI 0.6 -16.1 h.2 5.7 225 5.2 'I_i1 PIC 1_ .0 11.4 I7? 9.4 L.O -3.7 -9.0 2.3 N3 4.5 1.4 UiKE Li 1.4 4.4 -1.5 -4.4 -3.3 2.4 -1.2 -42 -51 2.9 c__ 146 6.7 -04 -1.7 4- -3.1 132 -1.2 -9.4 -11.7 3.7 T`11 a T1LI.1111211 LO 19.0 2.0 11.1 1.6 -I. -14.8 4.3 1O L2 3.9 P.UBCEWIlt 4.L 20.3 2ILS -5.3 -4.4 -2.4 0.0 -2. -1.2 -43 1.4 P21 m =E 2.7 1.1 6.9 -1. Li -I.4 -L3 -L4 -24.9 2.1 4.1 _ ATF OSI 0.9 3.5 42 .9 -L34 -1.4 -1.4 07 -L3 2.7 2.4 RnIoICT1van LEN MINS 135.3-3.5 1.4 24.2 -24.4 -17.0 468 -2.4 27.5 2.4 W UT ui MIKE 2.2 4.2 L 2.7 -27 -3.8 -2.3 0.4 -2.3 L 2.4

ILICIT U EPLATEr191i77m0 .I 27.4 11.1 7.5 I3I 14.e 14.3 14.2 L3 9.0 9.0 @@e-I rSb*^ 70-75 75-79 70-79 10-1 UEICKI 2.2 1. 2.0 2.1 1.4 21113- *1.0 2.9 0.7 0.L 1.2 now 7.5 -2.7 LI -0.4 -3.0 TIIN -4.7 54 -L2 -2.3 LA IHTa a BECitlITY LI LO 4.6 1.0 1.3 P ato I ELIC ek LO 11.4 LI 4.1 7.0 SE11ims L.b 1.4 3. -1.5 4e.1 C1 0.4 -1.3 -1 -t.3 -L2 Tw_ tAT Tl Tll 0.0 h4 L7 -0.4 2.2 PULICE B -0i L4 1.0 -1.2 -4.1 mm#110E 15 2.7 1.1 2.2 -32 -1.7 WIT FEll CWT L. L. 3.3 0O 0.4 hECl TiM 1Im IEC LO -04 -LI WM a T KE 2.2 2.0 Li 0.4 0.4

IWLJCITU EFLT 39.10 7.e sk.7 I.L 11.1 3LS

SEwca Ostra Mrlm abrnU as_sta4f modus. - 95 -

TableS9 71 CAR- TOTALPUATIU BYSEl, 1950-l9 0

i n thuuamds )

1950 1955 196 19YA 1970 175 195

TOTAL 1417 150 105 1735 1879 2034 23

FiALES 737 781 137 905 979 1= 1163

NILES 60 722 768 6W0 900 976 1103

ANNUALAVERASE POPUULATIDUGMf 10) 1.3 1.3 1.1 1.6 1.6 2.4

Swrue : The lorld Dunk, VurIdPopulatim ProjctiM 19Y5. TABLE9A St CAR- POPULATIONPROJECTIONS WITH NRRuI AND DUM04RAPHIC INDICATORS, 1980.2035

(in thousand)

AG 1 19&0 1225 lto§ lots 2090 2001 2010 T 2on| 2oz0o 04 167 213 251 J17 341 360 376 J34 392 400 5-6 ISO 1t7 166 240 30t 027 247 366 278 317 10-14 II7 146 1II 194 241 226 322 343 363 376 15-16 II3 I03 143 165 III 16 16s11 6 340 160 -434 57 I'l 4 "II Ill. 157 233 261 3I 327 t31t 0 34 I'l: 1144 III 157 162 112 2I3 I11 30-34 so 60 II III 140. 131 IIr 17 21 711 151 53 53 56 710 0o 16 116 ISO 176 112 40-44 el so 10 16 7i 104 132 124 146 173 45:49 47 48 41 46 53. 71 100 127 120 141 s0o 4 41 43 45 44 45 to so 65 I21 II$ 55-56 24 36 40 41 41. 41 46 63 is 113 00-64 26 10 13 325 1 37 37 42 57 g0 *5-66 I2 2I 15 26 10 31 31 31 35 46 70-74 IC * IS I9 32 11 24 24 15 1s 75* 4 S 6 14 16. 23 26 is 29 21 TOTAL 11oO 1246 1431 1579 1626 2211 2466 1793 1092 2326 FEMALES 0:4 60 II 269 314 337 155 371 360 "36 139 5 9 157 172 I11 245 lot 314 344 361 171 161 10-14 ISO 1512 6I 14 141 16 J10 340 |15 3J7 15-16 114 140 149 165 III 231 2II 317 136 260 20-24 61 III 143 146 162 too 114 Il 314 311 25-29 A0 90 106 140 143 l9 16 231 265 311 30-34 72 77 37 100 135 140 I11 II2 a2l al1 35-39 66 St 74 s5 102 133 137 153 179 225 40-44 6 6 72 62 6 II Iso4 0 171 41 49 5 63 6. 6 76 S I26 110 146 S0_54 so se St 60 Si 66 76 61 121 112 so-so 39 46 51 so is 17 GI 72 I IIII 0-64 27 31 42 47 go 61 53 se 07 6*06 "I 23 10 16 41 44 45 46 II 56 70-74 10 6I 24 2t 33 1 37 316 42 75* 4 a 10 17 24 32 I 44 46 . TOTAL 1166 1116 1527 1757 2014 2293 2174 161 3154 4,145 TOTAL rF2216 2163 ING 3447 J142 4504 5071 56H4 6247 6164 RELATED INOICATOOIS tR4TH RATE 41.3 41.6 46.0 41.1 37.5 34.J2 J0.6 all 25.0 GATH RATA 10.6 10.0 16.0 12.4 t1.6 10.5 9.2 6.0 7.0 KATE Of MAT. INC. 2.41 2.71 *:OI 1.76 , 2.e6 1.16 21.16 200 I'll OWTH RATE 2.43 2.76 2,00 2.79 2.56 1.21 1.16 1.9 I,S6 TOTALFEKTILITV 6.50 5.710 *.000 1.740 1:2J2 4.4J0 3,445 3432t TRGI .2709 2.S33 1 Ug 2,627 3.577 2.221 1.643 1J41 1.446 NOR I 06 1.1 1.131 .2.065 1.6113 1.60 1,465 1.311 "1 - WALE 121. 1164. 10.17 *4.6 66.3 7714 69.0 0.3 51.17 INs FINALE 10*0L.6 6. 6.1 716. 711.9 6.6 16.0 46,1 40.1 - 601H 19AIS 11.3 .7. . :11N1(4 LtI7X to4. tO740. S 164 J7 154342 7 709|270.9 5961.0 C41 14 4.3J4 U346.0 0 1(0) - EMA 40.06 46.11 60,54 51.64 14.87 5. 5 01,42 637 ;101 * 1`1ALE 44.6 5t.71 34.06 56.44 114.112 60.66 61.612 6571 GI. t(0) SOTH S211S 41 1 4S" 62.1624.01 1U.67 66.O 41.01 63,1Jl,6H

NRRM Net Reproduction Rate GRRM GroasReproduction Rate IM - Infant Mortality Rate R(O) * Expectation of Ltfe at Bitth Sourcei The World Dank, 'World Population Projections, 1984." - 97 -

Table SA 9: CAR - URBAN AND RURAL POPULATION. 1975

______Prefecture-Sous Prefecture Total Urban Rural ------

TOTAL CAR 2086000 553778 1534222 l- VAKABA 21391 - 21391 - Birao 19293 - 19293 - Ouadda-Djalle 2098 - 2098

2- BAMINGUI-BANGORAN 26 - 25943 - NDele 20721 - 20721 - Samingui 5222 - 5222

GRIBINGUI-ECONOMIQUE 72625 11876 60749 - Kaaa-Bandoro 59066 11876 47190 - MBres 13559 - 13559

4. OUHAM 225679 .7693 187986 - Batangafo 54733 12543 42190 - Markounda 25810 - 25810 - Bossangoa 105886 25150 80736 Bouca 39250 - 39250

5. OUHAM-PENDE 210189 13573 196616 - BoZoum 40492 13573. 26919 - Bocaranga 92755 - 92755 - Paoua 76942 - 76942

6. NANA-MAMBERE 166798 29528 137270 - Bouar 90375 29528 60847 - Baboua 54593 - 54593 - Baoro 21830 - 21830

7. HAUTE-SANSHA 194169 45148 149021 - Carnot 83181 17863 65318 - Berberati 800424 27285 52739 - Gamboula 30964 - 30964

8. SANGHA-ECONOMIOUE 52564 - 52564 - Nola 45448 - 45448 - Bambio 7116 - 7116

9. LOBAYE 135019 17714 117305 - Boda 44501 - 44501 - MBaiki 80727 17714 63013 - Mongoumba 9791 - 9791 - 98 -

Table SA 9 (continued)

Prefecture-Sous Prefecture Total Urban Rural

10_ OMBELLA-MPOKO 109221 14158 95063 - Bossembele 43807 10237 33570 - Boali 15131 - 15131 - Bidbo 34311 3921 30390 - Damara 15972 - 15972

11_ KEMO-ERIBINGUI 65649 13341 52306 - Dekoa 29 - -26783 - Sibut 36866 13341 23525

12. OUAKA 179966 42101 13.7865 - - Bakala 7698 -- 769B - 6rimari 29875 - 29875 - Kouango 34360 - 34360 - Bambari 76190 31265 44905 - Ippy 31843 10816 21027

13- BASSE-KOTTO 161997 12295 149702 - Alindao 53801 12295 41506 - Mobaye 53 - 52574 - K.mbe 34 - 34131 - Mingala 21 - 21491

14. MBOMOU 111680 21773 89907 - Bakouma 11 - 11287 - Duango 42 - 41625 - Bangassou 47987 21773 26214 - Rafai 107B6 - 10781

15. HAUT-MBOUMOU 33019 - 33019 - Djemah 3075 - 3075 - Zemio 16143 - 16143 - Mboki 1707 - 1707 - Obo 12094 - 12094

16. HAUTE-KOTTO 42299 14786 27513 - Ouadda 6325 - 6325 - Bria 30931 14786 16145 - Yalinga 5043 - 5043

17. BANGUI 279792 279792 -

Source: Haut Commissariat charge du Plan et de la Cooperation Economique et Financiere.

Note: All "cne+-lieux prefecture" or "de sous-prefecture" with a population of at least 10.000 are classified under urban areas. Bimbo. "chef-lieu" of Ombella-MPoko, which is part of the Bangui metropolitan area, is also classified under urban areas. - 99 -

Table SA 10: POPULATION DENSITY, 1975

(in thousands)

Prefecture-Sous-Prefecture Population Area Density Ckm2)

TOTAL CAR 208B000 622372 3.4

1. VAKAGA 21391 46440 0.5 - Birao 19293 36440 0.5 - Ouadda-Djalle 2098 10000 0.2

2. BAMINGUI-BANGORAN 25943 58200 0.4 - NDele 20721 37140 0.6 - Bamingui 5222 21060 0-2

3. GRIBINGUI-ECONOMIQUE 72625 19996 3.6 - Kaga-Bandoro 59066 16421 3.6 - MDres 13559 3575 3.8

4. OUHAM 225679 50250 4.5 - Batangofo 54733 17130 3.2 - Markounda 25810 7110 3.6 - Boussangoa 105886 10208 10.4 - Bouca 39250 15802 2.5

5. OUHAti-PENDE 210189 .32100 6.5 - Bozc'jm 40492 11267 3.6 - Bocaranga 92755 12413 7.5 - Paoua 76942 8420 9.1

6. NANA-MAMBERE 166798 26600 6.3 - Baboua 54593 13809 4.0 - Bouar 90375 12791 8.8 - Baoro 21830

7. HAUTE-SANGIA 194169 30203 6.4 - Carnot 83181 14985 5.6 - Berberati 80024 11008 7.3 - Gomboula 30964 4210 7.4

B. SANSHA ECONOMIQUE 52564 19412 2.7 - Nola 45448 14147 3.2 - Bambio 7116 5265 1.4

9. LDBAYE 135019 19235 7.0 - Boda 44501 9035 4.9 - MBaiki 60727 8931 9.0 - Mongoumba 9791 1269 7.7 - 100 -

Table SA 1') (continued)

------__ Prefecture-Sous-Prefecture Population Area Density

10. OMBELLA-MPOKO 109221 31898 3.4 - Bossombele 43807 17592 3.4 - Boali 15131 - Bimbo 34311 3095 11.1 - Damara 15972 11211 1.4

11. KEMO-GRIBINGUI 65649 17204 3.8 - Dekoa 28783 5577 5.2 - Sibut 36866 11627 3.2

12. OUAKA 179966 49900 3.6 - Bakala 7698 11000 0.7 - Grimari 29875 5297 5.6 - Kouango 34360 6640 5.2 - Bambari 76190 10660 7.1 - Ippy 31843 16303 2.0

13. BASSE-KOTTO 161997 17604 9.2 - Alindoa 53801 6782 7.9S - Mabaye 52574 3602 14.6 - Kembe 34131 4220 8.1 - Mingala 21491 3000 7.2

14. MBOMOU 111680 61150 1.8 - Bakouma 11287 14720 0.8 - Ouango 41625 5934 7.0 - Banqassou 47987 12611 .8 - Rafai 10781 27885 0.4

15. HAUT-MBOMOU 33019 55530 0.6 - Djemah 3075 36530 0.1 - Zemio 16143 7160 2.3 - MBoki 1707 1865 0.9 - Obo 12094 9975 1.2

16. HAUTE-KOTTO 42299 26650 0.5 - Aouadda 6325 32389 0.2 - Bria 30931 10572 2.9 - Yalinga 5043 43689 0.1

17. BANGUI 279792 67000 4.2

------

Source: Haut Commissariat charge du Plan et de la Cooperation Economique et Financiere. - 101 -

TableSA 11: CAR- ESTIMATEDAGRICULTURAL PRODWCTION OFPRINCIPAL CROPS, 1970-84

(inthousands of metrictons)

AnnualAverage ITEM 1969/70to 1974/75 19751761976177 19771178 1978179 1979180 1980191 1981/82 1982/83 1983164 1994/85 1974/75

EXPORTCROPS

Cotton 50.6 47.5 33.5 41.0 2B.1 32.2 27.8 22.6 17.2 28.6 33.4 45.5 Coffee 12.0 10.1 10.8 11.4 12.0 12.2 13.3 15.7 15.8 17.4 2.7 13.9 Tobacco 1.4 1.7 1.9 2.4 2.8 2.0 1.7 1.2 1.2 1.2 0.7/a 0.8la

FODNCROPS lb

Cassava 273.3 214.8 261.1 258.9 235.7 235.7 232.8 240.3 244.9 253.0 208.6 n.a. Groundnuts 70.5 74.3 70.3 72.8 61.9 61.9 67.9 69.4 71.7 76.3 5B.4 n.a. Millet & Sorqhua 46.6 44.0 39.6 41.2 42.4 42.4 42.6 41.6 41.1 41.5 38.2 n.a. maize 9.0 7.8 7.8 7.9 6.9 6.9 7.4 7.6 7.2 7.9 6.4 n.a. Rice(paddy) 8.2 10.2 11.5 11.9 13.6 13.6 12.8 12.9 14.5 14.5 6.6 P.a. Sesame 12.3 10.0 1O.B 11.2 8.6 8.6 8.9 10.1 9.4 9.8 8.3 n.a.

/a Tabacde capeonly since 1983. /b Statisticalinformation on food crops is particularly neak. n.a.:not available.

Source: Direction de la Statistique et des EtudesEconomiques, and Ministere du DeveloppenentRural. - 102 -

Table5S 12: ESTINATEDCROP AREAS, 1970-94

(in thousndsof hectaresl

AnnualAwrage ITEI 1969/70to 1974U751975176 1976/77 1977/78 1978979 1979/80 1980181 1981182 1982/83 1983/84 1984/85 1974175

EXPORTCRMPS

Cotton 131.7 135.6 132.4 119.6 117.3 115.6 82.2 82.2 53.6 68.5 72.0 79.6 Coffee 33.9 38.0 39.9 40.1 46.7 51.1 52.9 55.S 56.8 57.3 54.5 52.0 Tobacco 2.0 1.9 2.4 2.6 2.7 2.5 2.0 1.2 1.4 1.3 0.6 0.7

FOODCROPS la

Cassava 316.7 289.9 274.5 270.4 231.7 239.7 237.7 246.1 248.8 256.2 252.1 .e. Sroundnuts 124.3 120.3 113.8 117.5 105.8 105.9 112.1 115.3 120.2 129.6 132.9 n.a. Millet & Sorghu 62.4 69.7 62.5 65.0 66.1 66.1 66.2 64.9 64.2 64.7 62.3 i.a. .aize 99.5 99.8 9".2 100.9 87.1 07.1 92.6 96.0 90.6 97.2 95.7 a.e. Rice (paddyl 10.1 11.1 12.2 12.7 13.7 13.7 12.9 13.0 15.1 15.1 8.6 n.a. Sesa: 43.9 40.3 43.1 44.6 34.4 34.4 '5.6 41.3 36.8 39.5 35.5 n.a.

/a Statistical informationon crop areas is particularly elakfor food crops uihichare intercropped. n.a.: not available.

Source: Direction de la Statistique et des EtudesEcOmOiques, and Ministere du Developpeent Rural. - 103 -

TableSA 13: CAR- ESTIMATEAVERAGE YIELDS OF PRINCIPAL EIPORT CROPS, 1970-84

IKg/ha)

Annual Average ITEM 1969170to 1974/751975176 1976177 1977/78 1978179 1979/BO 1980181 1981/82 1982183 1983184 1984/85 1974/75

EXPORTCROPS

Cotton 384.2 350.3 253.0 342.8 239.6 278.5 339.2 274.9 320.9 417.5 463.9 571.6 Coffee 354.0 265.8 271.4 284.3 257.0 239.7 251.4 282.9 278.2 303.7 49.5 267.3 Tobacce 700.0 894.7 791.7 923.1 1037.0 800.0 050.0 1000.0 857.1 923.1 1166.7 1066.6

FOO CROPSIa

Cassava 863.0 951.2 951.2 957.5 983.3 993.3 979.4 976.4 984.3 967.5 827.4 n.a. 6raundnuts 567.2 617.6 617.8 619.6 585.1 585.1 605.7 601.9 596.5 588.7 439.4 n.a. Millet & Sorghua 746.8 631.3 633.6 633.8 641.5 641.5 643.5 641.0 640.2 641.4 613.2 u.a. maize 90.5 78.2 78.6 78.3 79.2 79.2 79.9 79.2 79.5 81.3 66.9 n.a. Rice (paddy) 811.9 918.9 942.6 937.0 992.7 992.7 92.2 92.3 960.3 960.3 767.4 m.a. SeAme 290.2 249.1 250.6 251.1 250.0 250.0 250.0 244.6 255.4 248.1 233.8 *.a.

la Statistical inforeation onfood cropsis particularly weak. R.a.: not available.

Source: Direction de la Statistique et desEtudes Econmiquus, and linistere du Developp_mmtRural. Table SA 14: CAR - OFFICIAL PRODUCERPRICES OF SELECTEDAGRICULTURAL CROPS, 1970-85 /a

(CFAF/Kg)

Annual Average ITEM 1969/70 to 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1974/75

EXPORT CROPS

Cotton: White 35.5 45.0 45.0 50.0 50.0 50.0 50.0 60.0 60.0 70.0 80.0 100.0 Yellow 26.3 35.0 35.0 35.0 35.0 35.00 35.0 40.0 45.0 55.0 65.0 80.0 Coffee: Robusta 53.2 56.0 56.0 100.0 100.0 100.0 120.0 120.0 120.0 130.0 135.0 150.0 Excelsia 30.3 35.0 35.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 60.0 - Tobacco 163.8 215.0 215.0 215.0 215.0 215.0 215.0 215.0 215.0 215.0 215.0 215.0

FOODCROPS

Groundnuts:unshelled 19.4 20.0 20.0 30.0 30.0 30,0 30.0 35.0 35.0 35.0 42.0 55.0 shelled 34.4 40.0 40.0 60.0 60.0 60.0 60.0 70.0 70.0 90.0 90.0 120.0 Millet & Sorghum 15.8 16.0 16.0 20.0 30.0 30.0 30.0 35.0 35.0 35.0 40.0 60.0 Maize: White 17.3 19.0 19.0 25.0 30.0 30.0 30.0 40.0 40.0 40.0 50.0 70.0 Yellow 15.5 19.0 19.0 25.0 30.0 30.0 30.0 40.0 40.0 40.0 50.0 70.0 Rice (paddy) 27.5 35.0 35.0 50.0 60.0 60.0 60.0 75.0 75.0 75.0 75,0 80.0 Sesame 30.8 30.0 30.0 60.0 60.0 60.0 60.0 70.0 70.0 80.0 80.0 100.0

La Since approximately1979/80 officialfood crop priceshave not been enforced,but even prior to this time, therewas an active parallelmarket offeringgenerally higher prices.

Source: Ministiredu Commerceet de l'Industrie;Haut CommissariatChargd du Plan et de la Coopdration Economiqueet Financlere,and MLnistiredu DeveloppementRural. - 105 -

Table SA 15: CAR - ESTIMATED NUMBERSOF CAITLE, 1970-84

('000 head)

1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 /a 1984

Cattle 1,100 1,240 1,270 1,300 1,430 1,560 1,690 1,735 1,865 2,000 2,000

/a Estinate for 1983 based on numbers of animals vaccinated against rinderpest. Substantial increase in cattle since 1.977 due to immigration, closure of border and unaccessability of Nigerian market in 1983/84. The number of cattle varied from 1.9 million head in the rainy season 1983 to 2.2 million head in the dry season.

Source: Ministere du Developpement Rural; Raut Cormissariat chargd du Plan et de la Coop4ration Economique et Financiere. - 106 -

Table SA 16: CAR - PRODUCTIONAND EXPORTS OF TIDHER AND DERIVED PROUCTS, 1970-84

('000ml)

Annual Average ITEM 1970-75 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984

PRODUCTION

Logs 320.2 224.9 321.5 319.6 368.6 296.2 325.1 337.1 297.6 254.4 260.3 Sawn wood 84.6 72.4 76.1 90.3 104.3 67.6 70.6 69.7 63.6 61.1 57.7 Veneer - - 2.2 1.0 0.5 1.5 2.S 2.4 3.3 2.4 1.4 Boards - - 0.2 0.1 0.1 0.1 0.4 0.5 0.5 0.2 - Plywood - - 1.4 3.9 5.9 2.9 4.3 4.9 8.5 8.4 5.2

Logs 104.3 49.6 105.3 135.6 111.0 125.0 127.6 112.8 85.3 81.3 87.9 Sawn wood 42.9 25.8 35.9 50.9 46.5 38.5 43.1 38.2 38.2 40.0 32.1 Veneer - - 2.2 1.0 0.6 1.1 2.1 2.3 2.7 2.6 1.2 Boards - - 0.5 0.1 0.1 0.1 0.4 0.4 0.5 0.2 0.1 Plywood - - - 1.6 3.4 2.9 3.5 4.0 6.8 7.6 4.0

Source: Haut Cminssariat chargd du Touriame, des Eaux, Forits, Chasses et Fiches. - 107 -

Table 5 17: CAR - OFFICIaL PRODUCTIDDAND MMP0RTSOF DIAHNODS, 1970-85

('D000 erats)

Annual Average ITIE 1970-75 1975 1976 1977 1978 1979 1980 1981. 1982 1983 1984. 1985 (Jan.-May)

PRODUION

aworDiamonds 420.1 262.6 279.8 297.2 303.0 314.1 339.2 310.0 276.6 295.3 337.1 178.9 Cut Diamonds 5.9 4.5 4.3 3.7 5.4 4.3 4.2 3.9 4.8 5.3 4.0 2.3

EPORTS

Raw Diamonds 409.9 253.2 268.0 287.0 286.8 300.3 332.5 300.0 265.0 282.5 326.4 173.1 Cut Diamonds 5.1 3.1 3.5 2.8 4.2 3.6 2.1 3.1 3.9 4.6 3.5 1.9

Source: Haut Commissariat charge des FInea et de la G6ologie. - 108 -

Table SA 18: CAR- ANNUALDIAOCD PRWDOCION,1931 - l9J4 (in careta)

Production by artLeal Artiuanl Total ValJ Mining Causn1l0 Othor Production Official CYAF U1SS Year Carnot Reaoln UriS Region Production (Buyins Offices) Production (million) (million.)

1931 S00 1,000 - - 1,500 - - 1932 - - 1,700 1,700 - -

1933 - - 600 - 600 - -

193* - - 100 - 100 - -

1135 130 - - - 130 - -

1936 2,000 - - - 2,000 - -

1937 6,200 - - - 6,200 - -

1938 15,915 - - 15,915 - -

1939 17,461 - - - 17,461 - -

1940 31,927 - - - 31,927 - - 1941 33,365 - - - 33,565 - -

1942 46,232 - - - 46,232 - -

1943 56,032 254 * - 56,286 - -

1946 56,860 726 - - 57,586 - -

1945 79,267 3,604 - - 82,891 - - 1946 86,000 1,802 - 87,801 - - 1947 100,625 3,652 - - 104,277 - - 1948 111,392 7,408 - - 118,8W0 - - 1949 113,969 8,474 - - 122,443 - - 1950 - 96,143 10,341 - 106,484 - - 1951 127,528 13,810 - 3141,338 - - 1952 131,791 14,357 - - 146,148 - - 1953 108,821 23,137 - - 131,958 - - 1954 117,106 29,996 - - 247,104 - - 1955 106,244 27,41S - - 133,562 - - 1956 112,816 30,245 - - 243,061 - - -6457 83,403 22,078 2,772 - 308,243 - - 1958 62,498 19,850 3,350 - 85,693 - -

1959 48,552 38,22/ 4 - 86,766 - -

1i0 41,314 28,099 228 - 69,641 - - 1961 26,012 21,841 697 62,934 111,484 497.4 2.0 1962 41,420 16,544 3,415 204,039 265,418 1,579.7 6.5 1963 S8,382 15,144 256 328,404 402,186 2,518.5 10.3 1964 59,409 - 382,872 442,281 3,067.4 12.5 1965 91,794 - 445,016 536,810 3,466.4 14.1 1966 77,274 - 462,661 539,935 3,697.8 15.1 1967 45,708 - 474,920 520,628 3,532.9 14.4

1968 61,951 - 573,984 635,935 4,627.6 18.7 1969 27,639 - 507,677 535,316 3,961.0 15.3 1970 1,491 - 482,447 483,938 3,571.5 12.9 1971 1,223 - 437,449 438,672 1,972.6 7.2 1972 2,804 - 521,298 524,102 3,309.2 13.1 1973 1,248 - 379,218 380,466 2,895.7 13.1 1974 25,196 - 329,547 354,743 3,326.6 13.8 1975 79,998 - 258,896 338,894 2,930.2 13.7 1976 1,001 - 278,827 279,828 3,498.5 14.7 1977 - 297,154 297,154 5,532.0 22.5 1978 -- 303,008 303,008 9,151.2 40.7 1979 23,167 - 290,900 314,067 8,341.6 39.2 1980 5,133 - 336,575 341,708 8,420.3 39.9 1981 9,942 - 301,961 311,903 7,556.7 28.0 1982 27,941 - 248,632 276,573 7,753.9 23.7 1983 30,484 264,872 295,356 8,900.1 23.4 1984 3,049 334.101 337.150 11,810.8 27.0

TOTALEnd 19e4 2,834,463 13,118 8,507,392 11,354,973

Source: Iaut Coamisartat chargd des Mines et de Is Geologie. - 109 -

Table SA 19: CAR - RAW DIAMONDSEXPORTS, 1982

(in carats)

ImportingCountries France Belgium Israel Switzerland U.S.A. Japan Total

BUYING OFFICES

D.D.C. 38,434.90 38,434.90 SOPICAD 2,028.30 40,989.60 71.15 43,069.05 SODIAM 72,492.30 72,492.30 LA COURONNE 38,846.42 38,846.42 DIAFRIQUE 5,615.88 29,276.24 34,892.12 YANOOU- D. 2,648.34 4,586.05 7.234.39 SANGHA- D. 1,368.73 1,388.73 O.A.K. - D. 612.16 612.16 Sub-Total 41,083.24 118,982.90 70,265.84 - 6,045.93 612.16 236,990.07

MINING COMPANIES (Artisanal)

SOROMINES 8,173.30 8,173.30 SODICA 14,177.08 14,177.08 SECOMEP 2,475.40 2,475.40 CAREMI 2,532.40 2,523.40

SNAP ______579.27 579.27 Sub-Total 2,532.40 14,177.08 8,173.30 2,475.40 579.27 - 27,937.52

GRAND ITIAL 43,615.64 133,159.98 78,439.14 2,475.40 6,625.20 612,16 264,927.52

Source: Haut Couissariat charge des Mites et de la Geologie. - 110 -

Table S 20: CAR- Mr D 1ANESTHE TII DI_ IIFFICE,1975-15

I I I I EV:OR1TS : AVERS L SLB :A iB

: N: ber : Carats Value Value: u : Carats Vaw Vdae: :Yw :roductions: oi Value: pw p per : if Value: per p per : : rats) : Stos Carats ('000 : Stone Stow Carat : Stoe Carats 10 : Str. Stow Carat: :CFY) : (IA : W)FCFF): ICFAF):

. . . . . 975 : 4515 2:2765 3094 10754 0.111 3.197 34.871 7799 1320 15399: 0.169 19.760 116.597

1976: 431?: 26625 34 146901 0.12? 5.517 42.8161 634 1215 14736: 0.191 ZL.93 121.2:

1977 : 377S : 213B4 2865 167510 : 0.133 7.S33 S8.879: 7359 795 13219: 0.108 17.965 166.274

1978: 51B0:1 31361 4293 449476 0.137 14.332 104.944: 5609 764 209247: 0.136 37.127 272.515

979 : 4304: 31260 3617 315440 : 0.116 10.091 B7.210 : 5391 715 212959: 0.133 39.576 297.8U:

199: 4194: 17A6 2078 212622: 0.120 12.243 102.321: 5624 762 257720: 0.135 4.825 331L215:

1981 3961 25365 3099 337518 0.122 13.309 101.966 : 6325 787 281633: 0.126 44.527 357.856

1982: 4778 : 32994 3673 439410 0.111 13.2D8 119.360 : 5711 806 37892 : 0.141 57.344 406.914 :

£99S: 5261: 39747 4512 564339: 0.116 14.565 125.075 3826 539 250052: O.14 6L35 463918:

1984 : 39S5 27588 3434 4176B6 0.124 15.140 121.632 : m.a. 771 418096 1 n.a. n.a. 542.278 . . . . . 195 : n.a. : n.a. 1830 290306 : n.a. n.a. 15B.637 : *.a. 49B 248116 : *.a. n.a. 510.527 :Uaa.-NaV): : : : : m.a.: not available.

Sorce: Naut Conmissariat cbargedes ines et de Ia uologie. - 111 -

Figure SAI CAR DIAMOND MARKETING CHANNELS

\ _ ~~s

CC=D

MANI UXTUlEUR

Sources Haut Commissaria*t Charge' dam Mines et le la 6e•olog1l - 11.2 -

Table SA21: CAR- PRODUCTIONANDEXPORTS OF GOLD,1980-1985

PRODUCTION EIPORTS LOCALSALES JEWELLERS CCLLECTED

Height Value Unit Value Neight Value Height Value Height Value Value KG. dill.CFAF 000 CFAFIKG. KG. *ill.CFAF KG. uill.CFAF KG. dill.CFAF uill.CFAF

1980 543.51 1076.54 1980.72 534.52 1054.6B 8.98 21.85 n.a. n.a. 202.10

1981 49.12 103.63 2110.04 39.66 79.92 3.46 8.59 12.92 32.31 15.98

1982 36.40 77.17 2120.05 25.83 45.64 5.27 16.07 15.84 47.60 5.59

1983 90.05 179.25 1990.52 72.63 119.95 0.01 0.01 17.41 59.41 11.20

1984 235.54 692.14 289.06 216.26 610.83 a.a. n.a. 19.29 71.31 19.02

1995 155.72 512.12 3289.72 155.16 510.10 0.56 2.01 n.a. n.a. 15.75 (Jan.-.ay)

TOTAL 1110.33 2630.84 2369.00 1044.08 2421.02 18.28 48.54 65.44 210.63 269.65

n.a. : not available.

Source : Haut Comissariat charge des Nineset de la 5eologie. - 113 -

Table SA 22: CAR - PRODUCIIONMAD CONSUMEIIONOF ENERGY, 1976-84

(Volumes in millions of kwh; values in millions of CFAF)

1976 1977 1978 1979 1980 1981 1982 1983 1984

ENERCA&(Total)

Production 53.0 59.0 60.6 62.5 67.4 67.0 70.5 68.7 73.1 Consumption 44.7 49.0 51.7 51.4 52.0 50.7 52.8 55.8 60.3 Sale (value) n.a. n.a. n.a. n.a. 1,316.4 1,446.5 1,651.2 2,070.0 2.332,2 of which Bafgni:

Production 52.6 58.4 60.2 62.3 67.1 66.7 70.2 68.3 72.7 Consumption 44.3 48.6 51.4 51.2 51.9 50.5 52.5 55.5 60.0 Sale (value) n.a. n.a. n.a. n.a. n.a. n.a. 1,630.0 2,043.0 2,230.0

n.a.: not available.

Source: Socidt6 d'Energie Centrafricaine (ENERCA). - 114 -

Table Sk 23: CAR - COCSUMPTIONAND PRICE STRIXUCREOF PEZTXllUH PRWDUCS, 1980-84

Premum Regular Diesel Gasoline Gasoline Kerosene Fuel Other Total

cbIasptiDn (up)

1980 10,500 8,300 3,200 19,200 9,600 50,800 1981 8,400 10,700 4,300 24,800 12,200 60,400 1982 15,100 6,700/a 6,500 22,700 14,800 65,800 1983 19,200 - 7,700 23,300 16,500 66,500 1984 18,700 - 9,000 24,000 16,400 68,100

Price Structure - Januara 1983 (CFAF/litre)

C.I.F. Pointe Noire 103.10 103.53 99.34 Transport cost Bangui 32.33 36.44 36.78 Taxes and charges 96.07 1.00 72.05 Other costs 36.68 45.16 42.45 Cost at Was station Bangul 268.13 185.51 250.62 Price at gas station Bangui 300.00 125.00 248.00

Price Structure - June 1984 (CFAP/litre)

C.I.F. Pointe Noire 103.74 103.60 100.22 Transport cost Bangui 32.84 36.44 37.48 Taxes and charges 117.09 1.00 93.06 Other costs 39.39 48.08 45.36 Cost at gas station Bangul 293.06 189.12 276.12 Price at gas station Bangui 330.00 125.00 269.00

la Regular gasoline has not been Imported since mid-1982.

Source: Total Centrafricaine de Gestion (TWAGES) - 115 -

Table SA 24: CAR - ROADNEIWORK. 1984

(in kilometers)

- - Road Surface Total Paved Partially Earth length gravelled roads

TOTAL 20,278 442 2,694 17,142

NATIONAL NETNORK 8.978 442 2.694 5,842

Primary roads 5,044 442 2,330 2,272 Secondary roads 3,934 0 364 3,570

UNMAINTAINEDNETWOR

Feeder roads 11.300 0 0 11.300

Source: Ministare des Travaux Publics. - 116 -

Table SA 25: CAR - RIVER TRANSPORr, 1978-84

(in millions of tons)

1978 1979 1980 1981 1982 1983 1984

TOTAL 249.3 211.8 263.3 224.8 229.2 218.5 236.9

EXPORTS 142.4 126.5 153.0 144.3 125.4 112.0 146.1

Cotton 19.9 12.8 12.4 10.2 9.4 12.2 13.0 of which: CAR (10.6) (9.5) (11.5) (8.6) (6.2) (10.3) (9.4) Chad (9.3) (3.3) (0.9) (1.6) (3.2) (1.9) (3.6)

Coffee 1.2 1.4 0.4 0.0 0.0 0.0 0.0

:imber 119.2 108.4 138.3 132.4 113.9 98.4 131.5 of which: logs on barges (15.5) (18.5) (23.6) (7.1) (15.0) (12.7) (42.3) rafts (85.6) (74.7) (92.4) (116.2) (89.7) (73.9) (67.4) sawn wood (17.3) (14.6) (21.5) (7.3) (6.3) (8.5) (20.6) plywood (0.8) (0.6) (0.8) (1.8) (2.9) (3.3) (1.2)

Other 2.1 3.9 1.9 1.7 2.1 1.4 1.6

NMPORTS 106.9 83.3 110.0 80.5 103.8 106.5 90.8

Wheat and other grains (3.4) (4.0) (4.2) (3.4) (8.5) (4.2) (0.6) Salt (4.9) (5.0) (6.2) (4.6) (5.3) (7.5) (6.3) Sugar (2.2) (2.4) (0.6) (0.0) (1.9) (3.8) (3.6) Flour (11.7) (6.2) (8.3) (8.6) (2.4) (1.4) (0.9)

Motor fuels (45.2) (32.8) (62.1) (32.3) (55.6) (58.0) (48.1) Sheet-metal and iron (1.4) (0.6) (1.4) (1.2) (1.3) (0.9) (1.1) Concretes (16.0) (17.4) (14.8) (14.1) (15.4) (18.1) (16.7) Fertilizers (6.3) (2.9) (0.7) (4.8) (0.7) (4.2) (7.3)

Other (15.8) (14.0) (12.0) (11.5) (11.0) (8.4) (6.2)

Source: Socifti Centrafricainede Transports Fluviaux (SOCATRAF). - 117 -

Table SA 26: CAR - AIR TRAFFIC,1976-84

L976 1977 1978 1979 1980 1981 1982 1983 1984

BANGUI AIRPORT

Number of comercial flights /a 2,025 1,970 2,939 2,390 1,989 2,YeQ 2,088 1,920 1,830 Number of passengers 29,105 35,952 36,968 39,959 44,464 42,117 50,438 51,904 48,925 Freight (tons) 6,978 10,362 L2,779 10,844 4,725 6,466 6,438 9,563 6,349 of which: arrival 4,001 7,271 7,775 7,406 4,204 5,751 5,393 7,596 5,542 departure 2,977 3,091 5,004 3,438 521 715 1,045 1,967 807 Hail (tons) 102 113 113 L05 70 162 190 169 187

DOMESTICAIRPORaS

Number of cozmercialflights 64 231 838 652 93 209 406 379 480 Number of passengerslb 42 761 3,600 3,095 1,031 1,473 3,512 3,009 2,038 Freight (tons) 0.0 U.5 72.4 40.8 2.6 n.a. 99.0 24.0 18 of which: arrival 0.0 8.5 48.5 7.0 2.6 n.a. 3.0 9.0 5 departure 0.0 3.0 23.9 33.8 n.a. n.a. 96.0 15.0 13 Mail (tons) 0.6 2.0 2.0 -

/a Flying clubs, private and militaryflights not included. /b Arrivalsand departures,transit passengersexcluded.

Source: ASECKA- Bangui. - 118 -

Table SA 27: CAR - WHOLESALE AND REIL PRICE INDICES, 1978-84

(Average of period, 1976 - 100)

------Wholesale Price Inex ------Retail Price Food Electricity Industrial General Index Stuff Puel IWports Index Foreign National /a

Number of articles 14 5 26 45 160 168

Weight 300 150 550 1,000 1,000 1,000

1978 116.2 116.9 115.6 116.0 122.4 n.a. 1979 144.8 134.6 124.8 132.0 134.2 n.a. 1980 15S.7 184.8 142.2 153.2 157.1 n.a.

1981 180.2 218.1 160.1 175.6 176.9 100.0

I 177.2 198.5 150.6 166.3 172.3 95.8 II 177.8 210.8 156.9 172.0 174.4 99.0 III 181.3 231.8 161.0 178.8 178.1 103.4 IV 184.7 231.0 171.7 185.5 183.6 101.8

1982 198.0 264.8 182.5 200.9 200.3 113.4

I 191.4 262.4 178.8 196.7 192.4 207.0 II 197.8 264.8 190.3 199.7 199.0 113.9 III 200.1 266.0 182.7 201.8 202.8 115.7 IV 202.7 266.0 188.2 205.6 207.2 116.8

1983 215.5 300.0 194.7 218.6 226.9 129.9

T 214.4 300.0 192.3 217.0 219.1 124.0 II 214.4 300.0 192.8 217.3 226.1 132.3 III 215.7 300.0 195.0 219.8 230.7 131.3 IV 217.5 330.0 198.7 220.3 231.9 131.9

1984 278.9 315.1 211.7 231.5 246.9 n.a.

I 217.1 300.1 207.6 226.1 240.4 131.0 II 218.4 308.8 210.3 229.5 246.0 130.2 III 219.2 325.7 212.7 233.9 249.6 133.2 IV 221.0 325.7 216.3 236.4 252.0 n.a.

/a Average of period, 1981 - 100.

n.a.: not available.

Source: Direction Gin6rale de la Statistique, Eaut Commissariat ChargA du Plan et de la Coop6ration Economique et Financibre. tU~ S

_ Um ( a 8 8 o

I- -

I8 o.

UF H0 UUt D 088 'o

IUI,

U- - °

8 8~ 8 8 8 ° -~~~

8 o 8 S~~~a

8-d8

8 8 8 S~~~~~~~~~~~~~~~- g g o '0

8 8 tm U

-' 6TI - 120 -

Table SA 29: CAR - PARAPUBLIC ENTERPRISES

Public Enterprises

ACCF Agence Centrafricaine des Communications Fluviales CENTRA-HYDRO Centrafricaine d'Hydrocarbures CENTRA-PALM Centrafricaine de Palmiers CNTR Compagnie Nationale des Transports Routiers ENERCA Energie Centrafricaine ICA Imprimerie Centrafricaine LCA Librairie Centrafricaine SEGA Socidtg de Gestion des Abattoirs SIRIRI Entreprise d'Etat d'Assurances et de R6assurances SNE Socidtd Nationale des Eaux SOCEFI Socidtd Centrafricained'Exploitation Forestiere et Industrielle

Mixed Enterprises State Particieation

BANGUI-TOURISME Soridt6 Bangui-Tourisme BARC Bureau d'Affr&tementRoutier Centrafricain 33 CARAMBOIS Socidte d'ExploitationForestiare 15 CAREMI Societd Centrafricainede Recherches et d'ExploitationMiniere 20 CENIRA-CUIRS Socidtd Centrafricainedes Cuirs - CENTRAGIRO Socidte Centrai-ricainepour le D6veloppement de l'Agro-Industrie 24 CICI Centre Industriel Centrafricano-Israelien 50 CND Comptoir National du Diamand 50 IER-RCA Socidtd de Transports Aeriens 52 MANUCACIG Manufacture Centrafricaine de Cigares 15 SCAT SocidtE Centrafricaine de Tabacs 50 SCET Societd Centrafricaine d'Equipements Touristiques 42 SICPAD Societe Industrielle Centrafricainedes Produits Alimentaires et Derives 8 SNCT Societe Nationale de Construction et de Transports 10 SOCADA Sociftd Centrafricaine de DEveloppement Agricole 75

Public Offices ACADOP Agence Centrafricainede DEveloppementde l'Ouham-Pende ADECAF Agence de Ddveloppementde la Zone Cafdiare CAMDE Caisse Autonome d'Amortissementdes Dettes de l'Etat CAISIAB Caisse de Stabilisationet de Perequation des Produits Agricoles CAPIMEC Centre d'Assistance aux Petites et Moyennes Enterprises Centrafricaines CNPAF Centre National pour la Protection et l'AmEnagement de la Faune OCATOUR Office Certrafricaindu Tourisme OCPT Office Centrafricain des Postes et Teldcommunicatvons OCSS Office Centrafricain de Sdcurite Sociale ONF Office National des ForEts ONI Office National de l'Informatique ONIFOP Organisation Nationale Interprofessionnellede Formation et de Perfectionnement CNMD Office National de la Main-d'Oeuvre ONPJ Office National de Promotion de la Jeunesse OPPME Office de Promotion des Petites et Moyennes Enterprises Table SA 30; CAR- STATEAND MIXED ENTERPRISES, 1982 Aj

(values in millions of CFAF)

------TURNOVER ------OPERATINGCOSTS ------Numberof Invest- Net of whlch Goods& Fln. Output employee ment income TOTAL exports TOTAL Salaries services charges Taxes

A. STATEENTERPRISES

LibrairteCentrafricaine -1 285 - 288 : 213 9 12 - 28 1. T mriaerleCentrafricaine 11 178 - 184 90 53 3 31 - 58 12 EN RCA -135 1,598 - 1,574 70 576 25 63 700 585 435 Pharmcie d'Etat -72 216 - 236 25 187 - 9 - 38 -3 BNCD 91 697 - 811 11 - 32 101 - 74 - SOCEFTI SIRIRI -123 275 - 430 49 248 2 9 - 28 -3 CAISTAB ------n.a. n.. ACCF 53 602 - 575 35 15 51 9 - 8 674 SNE 19 644 - 700 246 241 1 12 6,356 179 25 ONT 189 236 - 358 180 111 1 13 - 69 14 SEGA S1 165 - 217 105 57 - n.e. - 163 10 OCPT POSIES -289 384 - 673 473 182 n.e. - 523 121 Total -25_ I!! -5Y B. NIXED ENTERPRISES OCPT -63 605 * 669 559 99 - n.k. * 664 25 TOCAGES 1 14,106 - 13,926 642 12,077 624 n.o. 53,253 380 5 INTER RCA -54 237 - 324 38 225 n.e. 56 n.a. FCAT -148 1,177 1,150 1,461 396 654 207 n.a. 1,218 99 -113 CND 2 766 438 774 92 626 6 20 4,834 102 6 SOCADA -1,216 3,047 2,860 5,285 801 3,685 275 n.e. 17,256 n.o. n.a. CAROSHOIS -249 899 866 1,260 205 702 93 125 20,448 314 -102 C.I.C.I. - 223 - 221 77 110 3 8 - 11 6 SNCT 645 1,745 2,102 533 1,152 185 89 - 646 399 NANUCACIC -15 427 425 470 133 247 16 1S 39 158 7 SOCAIRAF - 2,578 - 3,123 676 1,794 - 106 205,000 541 -10 U B A C 35 1,523 - 1,488 486 200 - 338 - 140 448 6 C I 76 181 - 103 41 16 - 3 - 11 - SOCATI - 253 - 332 125 134 6 10 - 42 166 8 I C P A D -441 1,615 - 2,160 163 1,648 119 1 5,400 148 76 3ARC 17 224 - 190 79 48 1 27 - 39 16 C A R E M I 2 63 63 490 135 257 50 17 2 352 67 713 Total !2I! r 22 309! 56 GRANDTOTAL -1.614 34.949 5,802 40.424 6.617 2555 1.707 1.018 316.912 5.222 2.928

La No informtion has been provided for the following enterprises: SMI, C1KRwere liquidated in 1983; CENTRA-HYDR)has been erged with TOCAGESin 1983; SCET-SAJARIhas ceased to operate ln 1983. n.e.: not available. Sources Haut Comissarist aux Societes d'Etat et d'Econodie ixte. - 122 -

Table SA 31: CAR - BUDGETOP THE CAISSE DE STABILISATION ET DE PEREQUATION(CAISTAB), 1978-83

(In millionsof CFAE)

1977/78 1978/79 1979t801980/81 1981/82 1982/83

Balance at the beginning of the year 0 109 254 201 72 275

REVENUES

Export tax 564 1,272 598 710 1,507 2,021 Dues 28 22 0 292 400 0 EXPENSES

Price stabilization 0 0 0 3 5 5 Productivityprogras 148 111 180 522 532 507 Others 335 1.038 471 606 1,167 1,426

BALANCEAT THE END OF TBE YEAR 109 254 201 72 275 358

Source: Caisse de Stabilisation et de Pfr6quation (CAISTAB). - 123 -

TableSA 32: CAR- REVENUESMD EXPENDITURESOF THE SOCIAL SECUITY OFFICE (OCS5) , 1978-84

(in thousandsof CFAF)

17 1979 1980 1981 1932 1913 1934 a/

REVEEJES 993.0 1094.0 2249.6 2091.7 2602.9 2293.6 333B.8

Cotribution fasily allownces 506.4 609.8 1343.2 1191.9 1560.0 1350.5 1907.1

Contribution accidents at work 126.6 152.5 335.1 29B.4 390.0 337.6 476.8

Contributionretirument 253.2 304.9 559.6 596.9 6U0.0 562.7 794.6

Miscellaneous 6.8 16.8 11.0 4.6 2.9 32.8 160.3

EXPENSES 732.4 1036.2 1268L5 1695.5 2066.4 1922.0 2669.6

Familyallowances 311.3 402.0 496.5 599.9 830.0 744.0 1229.2

Accidents at work 70.3 62.4 78.9 75.9 99.5 81.8 154.2

Retiremnt 41.6 114.1 85.6 162.3 230.0 245.5 579.8

Administrativeexpenses 309.2 457.7 607.5 357.4 917.9 850.7 707.4

SURPLUSES 160.6 47.9 981.1 396.2 536.4 361.6 669.2

a/ Provisional.

Source: Directioa Generalede l'Office Centrafricain de Securite Sociale. TableSA 33s CAR - MANUFACTURINGCAPACITY, 1976-84

Unit 1976 1977 1978 1979 1980 1981 1982 1983 1984

FOOD PRODUCTS Coffee Rooting (tons) 600 600 600 600 600 600 600 600 600 Beer (hectolitres) 300,000 300,000 300,000 300,000 300,000 300,000 300,000 420,000 420,000 Cigars (millions) 46 46 46 46 46 46 46 46 46 Cigarettes (millionsof packs) 23 23 23 23 23 23 23 23 23 OlI (100 liters) 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400

TEXTILES CottonFabrics (millionmeters) 9 9 9 9 9 - - - n.ea

WOOD Plywood Wm) 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Sawn Wood (1000pa') 132 132 132 132 132 129 u1s 85 85

CHEHICALPRODUCTS P. soap (tons) 5,500 5,500 3,300 3,300 3,300 3,300 3,300 3,300 n.o. Plasticshoss (pairs)1,500,000 1,500,000 1.500,000 1,500,000 1,500,0001,500,000 1,500,000 1,500,000 n.a.

Retreadedtires (unit) 5,400 5,400 ------Plasticloam (tons) - - - - - 360 360 360 Batteries (unit) - - - - 10000 10,000 10,000 10,000 Oxygen (a') 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Carbonedioxide (us) 50,000 50,000 50,000 SOtOOO so5,oo so,ooo 50,000 50,000 50,000 Acetylen (mS) 16,400 16,400 16i400 16,400 16,400 16,400 16,400 16,400 16,400 Paintsand varnishes (tons) 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200

HEWAJICAL ITEMS Bicycles (unit) 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Mo6torcycles (unit). 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

ALUJKIWAPWV1T Corrugatediron (tona) 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Householditems (tons) 450 450 450 450 450 450 450 450 450

Source: DirectionCEndrale de la Statistique,Haut Coumissariatcharge du Plan et de la CoopErationEconomique et Financibre. Table SA 34t CAR - MANUFACTURINGPRODUCTION, 1976-84

Unit 1976 1977 1978 1979 1980 1981 1982 1983 1984

FOOD PRODUCTS,BEVERAGES & TOBACCO Oil (100 liters) n.ea. n.e. n.a. n.a. n.a. n.ea. 1,402 4,326 4,063 Beer (100 liters) 144,103 202,160 239,00 215,694 240,324 203,298 187,173 210,715 217,771 Flour (tons) n.a. n.a. n.ea. n.a. n.ea. n.a. 4290 940 - CArbonatedwater (100 liters) 2,819 3,423 3,777 3,812 4,327 4,365 4,457 4,495 5,158 Carbonateddrinks (sodas) (100 liters) 27,516 30,067 29,000 32,669 39,061 49,187 61,880 56,098 45,314 Sirups (100 liters) 323 420 425 633 774 685 849 593 710 Ice cream (tons) 1,861 2,828 3,122 2,712 2,999 3,249 3,439 2,799 3,837 Ciparettes (1000packs) 14,883 14,041 14 231 I$ 090 20 450 21,748 21 540 20 164 20 651 Cigars (Mllions) - 9.5 19.9 50.2 46.9 48.0 58.1 52.8 34.3 WOOD Plywood (6n) 1,442 3,875 5,887 2,897 4,252 4,881 8,460 8,374 5,230 Sawn wood (mW) 76,163 90,273 104,284 67,879 70,587 69,097 63,184 61,056 57,659 CHEMICALPRODUCTS Soaps (tons) n.a. n.e. n.a. n.. n.a. n.ea. 506 625 1,429 Oxygen (m) 44,430 48,954 38,000 43,446 39,356 39,237 42,416 35,754 35,380 Acetylen ( ') 14,229 16,380 12,000 14,000 11,748 12,195 13,765 11,796 14,044 VI Paintsand varnishes (tons) 480 578 464 356 428 486 475 462 557 Batteries (unit) ------1,863 4,.90 4,717 Plasticfoam (tons) ------113 92 1U Plasticbins (unit) ------63,000 82,000 71,000 Plasticshoes (1000pairs) 631 743 749 409 473 381 367 266 582 Nitrogen (a') - ' - 674 828 523 534 470 456 Nitrogen (1000liters) - - - - 283 440 425 256 nea. TEWrILESAND LEATHER

Rawmaterial (1000meters) 3,037 3,375 2,458 1,416 - - * - n.a. Blankets (1000meters) 38 44 28 13 - - - - n.ea. MISCELLANEOUS

AutomobileAssembling (unit) - - 30 203 163 325 168 92 142 Motorcycles (unit) 4,703 5,871 6,300 5,119 6,620 6,109 7,464 5,610 4,020 Bicyles (unit) 4,834 5,261 8,100 4,441 3,840 3,697 2,843 2,939 39045 Tricycles& carts (unit) n.a. n.a. n.a. 1,010 1,213 1,332 1,010 1,002 835 Aluminumhousehold products (tons) 323 393 3-5 285 256 231 256 333 260 Aluminumsheets (tons) 569 952 736 66- 784 636 686 549 610 n.e.: not avallable. SourcesDirection de la Statiatiqueet des EtudesEconomiques. 1ll111 S535 CM- [IFNI ITAIL. 1295-199

......

2110 2I95 197 2977 II97 liltm I 1U 1tOlm I"S 1914 195 19114 11 1911t 9"1 I9" 1991 192 1993 1994 M5 Xs@§sweee*es@@@@ ...... A. tt13441177 "Itlll ...... Sbill. of CFIl) EI SORISlIfESI 41.74 34.40 32.72 SI."3 32.12 39.40 40.92 38.94 3.g0 40.50 43.11 45.11 47.32 49.9 12.22 54.30 54.57 59.04 2.59 4.27 P7. 60005 25.02 27.04 21.62 27.40 27.72 31.90 33.12 30.94 31.20 31.50 34.41 3.22 38.09 40.1 42.43 44.21 4.11 45.34 50.57 52.9 55,37 1.COFEE 9.95 11.47 9.17 10.21 11.12 52.43 13.50 11.2? 14.i9 12.49 13.10 13.4. 13.97 24.39 141.2 15.2715.50 24.34 1I.93 17.52 15.13 2. IlMAh 5.43 5.53 4.34 5.44 4.00 4.47 4.45 5.71 4.24 7.50 5.4 '.52 10.47 11.51 12.44 13.29 13.94 14.4 15.39F14. lb 4.97 3. colTiP 3.33 4.07 4.17 S." 3.41 4.42 4.10 2.10 4.20 4.45 4.44 4.19 5.14 5.42 5.72 .03 .39 4.78 7.1it 7.42 .107 4. 1I251 7.24 4.52 5.45 5.10 5.25 5.50 4.40 3.92 4.30 5.10 5.10 S.4 4.19 4.44 4.4 4. 7.24 7.40 7.9 5.38 3.50 5. loNCto 0.23 0.45 1.01 1.10 0.75 O.46 0.54 0.59 0.45 0.33 0.43 0.45 0.47 0.46 0.50 0.57 0.55 0.58 0.41 0,.4 0.47 i. o01o150 1.14 1.02 2.54 1.37 1.19 2.00 1.43 1.0 1.30 1.43 1.74 1.7i 1.55 1.94 2.04 2.14 2.24 2.34 2.47 2. 0 2.73 IS 23.72 7.3s 4.1 4.50 5.20 7.50 7.10 5.00 5.40 1.34 1.70 5.94 9.23 9.51 .7It 10.49 10.39 10.70 11.02 113.5 11.9 5. fPlth l2lltCS 111713104) ...... 2IP9R1S60060 44.3 73.5 I00.0 101. I00.5102.5 104.2 119.4 142.1 157.5 245.0 115.4 115.3 ITS.7 204.7 215.5 22m.0 231.1 248.7 240.0 272.9 1. COFFEE 2.. 57.9 100.0 49.04.4 431 13U1 41.0 9.9 2.s5 1.0 106.1 11 124.3 134.4 14 117.2 147.4 171.3 119.9 202.2 2. 5101es 54.0 43.3 20.0 25.-3 259.7 257.3 139.1 154.5 144.1 179.2 10.3 114.3 14.3 154.3 114.3 114.3 114.3 144.3 114.3 114.3 114.3 3.COHTON 70.0 107.1 IWO 42.1 45.4 52.1 110.4 97.7 133 202.1 211,9 236.9 254.3 277.3 30.0 324.4 341.5 359.3 35.0 3911.4410.3 4. 1l151 42.2 9.2 I0.O 107.2 120.0 129.4 250.5 I.1 295.1 IO 200.0 215.4 232.0 249.9 249.1 219.1 304. 325.0 344.2 34.5 314.1 5. 15t50 14.4 17.1 100.4 11.J 230.2 2407 23. 200.4 210. 393.9 302.3 322.3 337,0 34.4 392.S 423.3 443.6 444.9 01.2 510.4 535.1 4. O1O 60060 N.1 99.0 100.0 15.9 139.5 124.0 141.3 393.173.5 331.3 293.2 344.1 317,0 329.7 342.9 35.4 367.3 315.3 NV.91 401.4 413.4 E.9O1 VA S 43.7 73.5 200.0 131.1 143.1 150.7 279.5 142.5 159.3 151.9 194.1 272.3 229.3 247.7 27.5 21.9 2". 0 39.o4 324.9 344.7 349.2 C. COWl!B949.11 ...... 5bill.of CIVI 1IF9111125fSI 11.41 25.40 32.72 33.74 35.24 44.00 4.5 50.02 51.04 45.17 74.00 2.54 92.74 102.20113.17 125.15 234.33 141.20 155 127.72193.9 600 12.41 I9.91 21.12 27.54 27.94 32.70 34.51 37.02 44.34 50.07 54. 4O3.51 70.40 7.65 17.461 94.41 105.27 I1S." 125.78 137.59 150.53 1.COFFEE 2.31 4.4 9.17 7.04 7.25 7.97 7.24 9.92 14.4 10.50 13.30 14.73 14.32 15.21 20.24 22.54 24.54 27,39 30.19 33.2736.17 2. II045 2.93 3.50 .4 10.51 9.51 10.11 9.02 9.05 10.21 13.1 15.40 17.54 19.29 21.21 23.33 24.49 25.72 27.02 28.34 29.78 32.27 3. cOital 2,13 4.3 4.17 2.47 2.24 3.12 5.30 2.74 5.42 R." 10.20 12.56 23.27 15.03J7M 19.56 21.12 24.16 27.27 30.30 33.75 4. 125811 2.91 4.00 5.55 5.47 4.30 1.12 9.45 7.33 5.41 10.10 11.40 12.79 24.34 14.09 10.40 20.17 22.22 24.70 27.47 30.54 33.97 5. IO CWC 0.20 0.39 1.02 2.32 0.96 I.09 1.25 1.15 O.9 1.30 1.30 2.42 1.56 1.75 2.94 2.20 2.44 2.70 2.97 3.27 3.59 4. OIP0015 I.6? 1.01 1.54 1.04 .46 2.52 2.02 4U30 4.40 5.40 5.20 S.46 5.54 4.40 4.9 7.43 6.23 6,9. 9, 20.44 21.29 Ws 4.00 1.42 4,1 5.9 7.3 11.3 14.0 13.0 13.17 5.1 17.1 19.02 21.17 23.55 24.19 29.15 32.04 33.11 35.11 39.23 43.24 e.ClET VALU5 ...... 11il.of us Sl IIPCIIiSIIFI) 55.90504.29 133.9t 149.50 125.47 248.27 175.51 152.22152.31 149.1514.17 Ill27. 191.17 222.92237.23 241.99 214.03 346.75133.45 3 6.7.1 403.52 60055 57.90 13.4122.50 123.U4131.34 25.75 12, 91 112.6 114.34114.59 111.54 132.32 247.00163.55 IN. 201.26211.31 239.17242.05 24.45 323.40 1.ICOIF 20.94 27.75 37.33 31.22 33.77 37.74 24.73 30.20 38.52 23.57 27.71 30.70 34.01 37.17 42.14 44.94 51.75 57.07 42.59 i9.31 74.39 2. 2l01 93.47 14.el 2U.10 44.56 45.05 4N.19 s3.20 27.53 26.94 32. 32.50 It 55 40,19 44.29 41.0 51.02 53.59 54.20 59.0 47.04 45.15 S. COltoD 10.07 15.24 54." [O."5 10.52 11.06 29.50 1.33 14.74 20.51 21.25 24.13 27.44 31.31 35.15 40.71 45.44 50.75 S4.I 63.12 70.32 4. IIIIII 13.90 17.07 23.12 24.22 29.43 33.61 35.51 23.1422.01 23.1l 23.75 24.U 29.92 13.52 31.50 42.02 44.2951.44 57.22 43.43 70.77 S.TOWCO 0.93 2.43 4.11 5.51 4.59 5.17 4.41 3.40 2.49 2.n9 2.71 2.93 .s30 3.64 4.0 4.59 5.05 5.42 19 4.52 7.4 4.0I 11 CONOO 7.54 4.23 7.57 4.41 7.10 11.93 7.43 19.17 11.51 12.3U 10.43 11.37 12.22 23.32 14.57 15.90 17.14 25.4020.05 21.7423.51 fIS 26.00 22.4U u.n 2.S 34.32 53.48 51.52 39.54MVS 34s5s 35,3 39U63 44,0s 49.0754.55 40.72 4.72 u." 74.6011.52 n.n92 IICIWIRATE UFN KRUS DOLLAR 214.1 239.0 245.1 225.7 212.7 211.1 271.7 211.4141.1 411.0450.0 434.0 40, 440.0 48.4 430.0 460. 430.0 440.0 4UO.0 480.4

IwetCsi C"tral Afticu asthoratitloand saffh prejectia. Table54 361CAR - INPT KTAIL, 2975-2I9

...... _ ......

...... ------) IIEI 1975 116 1,77 1978 1979 2SE0 1981 1982 19iS O9i4 2985 298 2957 198U 199 190 9I"9 1992 1299 1994 I295 ...... ___

A. COIANIAT1977 PRICES ...... (bill. of Cili IMPONS2IiFSI 38.74 35.61 45.20 46.72 44.22 55.94 47.92 51.30 49.79 51.91 53.N0 55.52 57.29 5S.29 61.31 U.52 45.601 U.9 70.5 713.207s.n5 1. 60065 20.17 19.53 25.50 25.62 25.03 32.33 29.36 29.67 29.21 30.60 32.665.317 34.6 34.10 37.17 3H.67 40.22 4.S53 43.50 45.24 47.05 2. 1IFS 16.57 16.26 29.70 21.10 19.29 23,61 26.56 21.63 20.58 21.11 20.92 21.5 22.41 '1,19 24.01 24.65 25.59 26.36 21.15 27.96 26.60

C. PRICEINIICIS

...... IRC11CICllfI l.3 94.7 100.0 206.2 223.5 122.7 142.9 29.9 202.2 203.2 212.2 229.2 247.4 267.4 2M.2 3N.2 316.0 327.4 343.1 364.4 390.2 1. S00N 6.3 14.7 200.0 105.0 226.3 126.1 144.4 160.0 202.3 203.2 212.3 229.3 247 267.4 216.2 3N.2 316.0 327.4 343.1 U4.4 390.2 2. IF9 U.3 94.7 200.0 107.6 226.3 120.6 240.6 179.6 202.1 203.2 212.2 229.2 247.6 267.4 216.2 30.2 SI6.0 327.4 343.7 U4.4 35r.2

C. CUfINEVM.ESI ...... lbill. of CUii 2W3I2T6a4SI 34.21)3.92 45.20 41.6052.31 72.00 6.49 92.30100.70 105.50 114.20 127.27 141.65 158.54 175.44194.4 207.94 U3.22 242.62266.70 25.S96 1. 60NK 17.21 IS.50 25.50 26.90 29.6141.60 42.3953.40 59.1062,60 69.60 77.66 6,37 96.55206.93 112.40 127.09 1236.93 49,52 2U4.63 253.60 2. WIt 26.4015.41 19.70 22.70 22.70 10,4026.10 1.90 41.60 42.%0 44.40 49.2 55.48 62.006.70 76.06 50.5 66.29 3.30 2Ol.67 112.36 O.amir VYIIUS ...... (Bill, of us 6I IPRI516WIfS2 159.62142.6 123."9 219.10245.92 340.11 252.05 280.6 264.26241.44 237.92 265.12 2S5.51 330.30 365.91 405.16 433.21 465.06 505.16 555.63 616.59 1. 60CS 63.1071.41 101.10112921 139.20 6.90156.00 162.50 155.01 143.26 145.42 121.79 179.94 201.14 222.73 246.47 24.76 25.2 3211.51343.40 362.50 2. WIS 76.52 64.48 60.29100.59 106.11 M4.16 96.0522i.38 10.17 96.26 92.50 103.37115.57 129.16 143.13 156.50 26.44 179.77 114.31212.23 234.09

EliCIMiEPATE CFAF 214.3 239.0245.7 225.7 212.7 211.1 217.7326.6 311.1 437.0 480.0 404.0480.0 460.0 460.0 480.0480.0 40.0 450.0430.0 0.0 ......

SwewnI CmttelAfrican e"Welthtes ad still ptoecftins, Table SA 37: CAR - DIRECTIONOF TRADE, 1971-82

(in percent)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

IMPORTS(c.L..E) 100.0 100.0 100.0 100.0 100.0 10000 100.0 100.0 100.0 100.0 100.0 100.0

Industrialcountries 78.8 75.5 79.2 67.2 68.2 71.8 86.0 87.4 88.2 82.4 74.3 71,0 of uhich: EC (73.4) (71.7) (69.9) (61,4) (56.8) (68.1) (82.1) (71.9) (75.3) (70.1) (67.7) (61.7) FederalRepublic of Cermany 5.8 7.1 7,1 9.7 5,6 10.6 8.5 5.7 3.3 2.9 3.8 3.4 France 59.1 57.0 57.3 46.1 44.7 45.6 63.3 57.8 63.4 57.6 58.4 50.5 Netherlands 3.7 3,0 3.3 2.6 3,6 5,3 3,6 2.8 2,5 3,4 1.6 2.4 Japan 0.6 0,9 0.2 0.9 1i1 2,8 4,6 6.0 4.2 6.9 3.0 6,2 Spain 2.3 1.4 0.1 1.4 1.6 1.6 1.5 1.9 3.0 2.3 1.6 1.4 United Kingdom 2.8 2.2 3.8 3.9 1.8 2.4 3.6 2,7 3.2 2,6 0,3 1.2 United States 5.3 3.8 8,6 1.7 1,8 3,7 3.9 3.7 4.5 3.3 0.7 1.S Other 20.4 24.6 19.8 33.7 39.8 28.0 11.0 19.4 15.9 21.0 30.6 33.4 Africa 6.2 3.7 4.5 12.9 11.7 12.0 11.5 5.9 6,2 9.0 8.2 11.1 Other 15.0 20.8 16.3 19.9 20.1 16.2 2.5 6.7 5.6 8.6 17,5 17.9

EXPORTS(fo.b..) 100.0 100.0 100.0 IGWO, 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Industrial countriLc 80.6 87,3 85.3 87.2 90.4 78.7 86,9 89.7 83.9 74.6 73.1 80.0

of which, eC (64.4) (71.4) (59.9) (55.0) (55.5) (71.7) (81.0) (81.1) (74.1) (70.2) (58.9) (68.9) Belgium 10.5 7.8 3,1 6.4 8.0 9.2 15,5 24.5 21.4 13.5 29.7 29,2 France 49.3 47.5 40.8 41.2 38.1 44.4 63,2 49.6 45.6 48.3 21.1 24,1 Israel 8.2 10.5 11.4 6.9 8.1 3.8 3.2 3.8 11.5 1.4 5.6 5.1 Italy 1i1 4.3 6.4 6.7 8.0 13.7 1.2 1.6 1.7 2.3 3.5 3,2 Japan 0.3 0,6 0.3 2,0 4.0 3.5 0,1 - 0.1 0.2 5.1 6.0 Spain 1.6 1.2 1.3 3.0 4.0 3.8 2,4 1.0 0.9 2,4 4.0 3.5 United Kingdom 2.2 3.6 4.3 2.7 0.1 2.2 0.8 2,2 2.1 3.8 0.5 1.3 United States 0.6 10.8 15.4 14.9 12.2 3.2 3.5 7.1 8.2 0.7 4.5 4.4 Yugoslavia 5.2 2,3 4.0 5.4 6.6 0.1 0.1 0,1 0.3 3,7 2.3 3.7 Other 21.0 11.4 13.0 10.8 10.9 16.1 10.0 10.1 8.2 23.7 23.7 19.5 Africa 5.4 3.4 3.3 2.6 2,7 4,7 2.5 3,8 2.5 5.9 51 3,8 Other 14.0 9.3 11.4 10.2 6.9 16.6 10.6 6.5 13.6 19.5 21.8 16.2

Source: IMF, Directionof Trade Yearbook, 1971-1983. - 129 -

Chart SAl: CeA.R. - Direction of Trade 1971 and 1982

EXPORT,F.O.B. EXPORT,F.O.B.

VA w ar smvm my PeInn w U Pon"=m

5.4 -wm ans3 4.638

amw U.3

SPORT, C.I.F. IMPORT,C.I.F. VSnzA-S ~~~~~~~~~~~~~w or srm _lwi _Dw_vn=

.isYt gmumu

6.8~~~~~~~~~~~~~~~~1.

S4.3

UA~ ~ ~~~~~~~~~~~~~~.

U.. .,,

Source: Table SA37: Direction o.f Trade 1971 - 1982 - 130 -

Table Sl 1 CIM- IIHE 111P 1M10-N 11 12IS Pop I of It

(in million of currt CFF)

1910 flU! 2192 19 199IN4 IS

AM KVELTs

Int qratedrual iulemt FRD 275 275 300 350 554 55S bltial udt3t 15 15 30 34

mlepmt htamS-UI FEDIV 331 371 400 129 126 0

Emeecy hbabilitatim WAI ECU 760 30 *F-a 250 30 210

Sqwt mm F=C 77 23

Applied aRdhNEA FAC 127 107 1i

ntegratedbrahlp. ral in Cotta Zeu IDA 1355 1200 FAt 675 721 470 EC 1500 64 435 FED me fig mEl ioo 454 MEIl 250 lAP. 200 therintwul $Wco 200 264 267 btimal bigot 1091

lntgated Dwelp.in CEf e ZomeIEIMAF) FERIV 312 325 26 2*3 FEDV 932 542 335 Cain ntab. 121 204 113 200 230 300 OF 1500 Natimal leiget 40

PaloIro hunp ASF 350 620 507 1040 B 206 CCCE g0 203 270 519 2129 - 30 50 220 n - 270 iON FEDIV 110 110 Hatien bigt so 6i 1i0 Joe

SpW haka 55

It Inldn tehnical sistan dirctUy rolated to projects. 21Cmntains - et ot all of private in tnent. 31 Dta for HIM ae projecting. Souce: Cntrd African authitie . - 131 -

TableS 30: (CUti_UE Pap 2 of11

1"0 1,31 192 113 £94 199

E6RICLIIUE(Cantinued)

Evial Roads UIDP 0 72 National Bigt (uhd Funi 25 25

Nlicro Veptable Sardnng FEDIV,V 24 34 2N 1 45 FAC 23 23 25

FoodCraps Dalla-Hoto IFSD 400

Rice Production lD/PeaceCrops lO0 40

all-Sciale Rural huvlpepst Cates FAC/IP 25 75 31 50

Eqapaint for Integrated Rural davlp. Ul Capital Fund 105 33

Cooperativetaps * Capitl Fund 13 iM 53 23 Ntional BRgat 2 6 3

Narket Calture ID lopent FAC Ntimal hie

Reductio Vast* Crops 15I615 40 314 NationalBget 19

CIEF(Natioal "at)l 15 30

CoamunityDalopuant EFA 1P 36 Nationallbget 33 45

Promotim Cents (National adgeti 7

ExceptiounlEsistanca(IIPI 22T II

Pedlolqical Study IIMP 104 U latialB hodget 5 S5

Ministry of Agriculture's Hlp FR6 43 43 National dget 5 5

Nutrition Strategy (FEC) 25 - 132 -

TableU 3. lCtimundl Fale 3 11

ti im tmn113 1m1ti ARICOLTIEICmatimed)

PrograsoF Supprt (WP) _U .36 3 ltiosl Budget 1£ II

5EllPNAtimal dgwt) 4

Prodution of ScE (IM) 14 5s

Urget Help (FE IV) 172

Food Hellp (Japa) 672

Smimeam-SurrelProject AiE 30 lati,al Budget It

Agremical bearch (tiul tdge) 3

Agricultural C.sus (IDtimul Bgt) 30

FoodCrop Rsarch (Natiml Budget) 3D

RelatedCrop Belupmt Caiii stab. 124 atinal Budget 100

Trauportatim FlettCais Stb.) 177

roclinatical Study D 133 atiunal udt 2t

Agricultural CreditDewalopmnt Bank UatiaI udgt 30

SbTotal qlriculture 1463 3062 2M 1109 9U2O 1345

UVESTUC

Interated Livstock hvelpt.in lsntun Rlq. IDFED 122 137 10 m3175 400 IFWI 3 110 1t0 1t0 262 201 UDF I" 19 75 124 300 lational Budget 90 45 6

Integated Liestock Develpt.in Eater bg. FEDIV 91 It5 111 FEDV 357 s5 310

Sl_agtwmoe hgui FEDIV 37 - 133 -

TableSA 39. (Cautins.d) Pae 4 of 1I

190 1981 192 1993 1984 19S LIVESTOlCmntirnzd)

Ahiul Heath UNDP 6 VeterinaryCaters UNCapital Fund 22 20 7

Shll Uvuitock &Poultry Farming UNCapital Fund UV

fte-King FACYW 14 8 29

C;lisr Stab. I 1 2

FoodPrgjKct USAID 38 92 Ibtional udt B 17

Agricultural ProjKct FAC 50 lNatioal II"Jwt 34

Sub-Total: LIYBETOCK: 4S7 633 532 718 883 146 FlSHEIllt

P"larization of Fiskrndinig _w 52 105 233 187 242 too Ul Capital Fod 14 to 12 l9 UNIICEF 20 29 37 31 IDA 35 40 76 46 FE0IV 100 -8 llolland 20 31 45 1S Iatianal _odt 6 FishingDwelopont (Ibrth) 1" Capital Fund IOS mmD 4 L6 21 UIIICEF I Cw 5

S CubTotalfISHb IN 141 315 411 28 26 1 - 134 -

Table 3k (CEotimu Pagoe5 of 11

MnO 1"1 im 1 196 I"s

FWRESMlt

Apllid Forestry Reserdh(FE) 50 *7 70 IS 15 15

DenseForet HNoap t Natial gt CIFM) 10 10 10 10

Pilot Plaatim latioul Budgt CM) IS 15 IS 15

Sava" be"uent ttioml ulwt (O1FW 30 30

Private lvstumts IFN- 1,F1C 310 350 375 400 400 Low - SIC 200 35 1k WhrFw try Cupanin 420 75 250 45 45 45

SOEFI 9 200

S*i-Total : FWRET 470 652 1045 64 524 715 TOTALMML EVELIWIT 2731 4662 47S3 7951 11300 1579

tEES& EUT

Patrol ImaCh ad Tlt killing ElIDE 100 1537 2100 w

Iraniua lahkma FEC 360 Privatt opany U

minigCoqamin Ctl 700 700 SMIC 200 30 eS 85 OAK 175 SECOEP 25 SMEMN 25 sIuNS SO 50 SWIP 30 55 04 50 50 SINrA SO 50 o Compies 100 100 200 200 Diasd Cutting 4 20 210 15

Artisul SoldPradctiom

MiningRmwch Office FRI 2 150 latioal Budgt 15 lining Support 15 Sub-Total: linsn I eology 550 179m 3175 1511 437 630 - 135 -

TableSA 39: (lCutinudl PWa of It

am rns am 11w1 nn

UIWFAClIIEIUIIKcludiq Irtinmat)

FondIndotry mmCA "O SCe 10040 50t 312 SIUCA 300 Ca 170 2w0 70 IIdACIl 70 tOO ISKAC 40 95 170 own gm Km CCCE 1195

IFU 200 S-a 574 Caie Stab. 109 OtherPrivate 42 Nationl hd6t 200

Tetile Indutry SKN34 72 UClB low1 148 go =107 20

OtherIrnsutris SIrAl (includin gas) 0 100 TUDW laygm) 65 Printdm*Esprm * Farnite oe GM (car as"ly ia 2 M

FED 3 3 lltimnal kdget so

SCAT(Nltiena Budget) 260 2Z3

NC( (Natinalingt1 a)2 150 11 Eur IumT(Natioal . g tl 3

C~t too

Prbstrial Prestio2

Matinal higt 8

Cli UMtary 21 15

SHE& Artist n 4 1005

Dther Deelupt Foods Is0 119 349

Sub-Total: IINFACTIIEI 209 2i 71 193 2225 4501 - 136 -

Table U 3a IComtiaul Pap 7 of 11

1900 113 12 191l 1914 1 aMY6 flIER ama 1ic Rduiliteti 510 134 200 230 322 1173 Eergcy Prwa0 "0 500 16 Wabailitatimmof Hwraulics Nicroceters INhaii

FUMTIU CNE EM 30 20 FAC 230

1 bab. 0L12 400

Sudy of sgi AK 139 am 11

SKuMArTCutr 300

Cuutmcti. & V*eiculn IS

Pilot Project Solar Enrrgy

Eeply ktl angi IFE 111) 0 4& Y

Extemim s"gi 1CCCE) 471 5 570 let lmproemmt FEDIV) 110 57

Provicial Net. Sply FEDV 30 10 34 k 30 30 Lael Collotbwity 10 10

Netimml Couuty of later tlop 17 10 EFD 3 FIB 7 INtieal Ihdt 3 21 hral Ibtr Cuter (FIM) 16 16

"so Studies 50 bsurch ICEF 22 _S 29 93 lltiul %dt & siTotai: OM iTR 0 UO 1 12U8 lie SRI - 137 -

TableSA 38: ICmntinued) Page 9 of 11

1990 19BI 1992 1913 914 1915

TDlRISN

Park BauinguiL School 65 74 72 76 63 5

Developmnt& Protection of Park Saint Louis N.6. 20 so 35 50 24

Hotel SAFARI PLII 300 MCE 334 652

Hotel INDEPENDUCE(National Dudget) IB

Sub-Total:01URISN1 R5 154 107 426 439 657

TOTAL: INDUSTRY 3334 4789 5593 5139 4236 9064

INFRASTRUCTURE

ROADNETVORI tuhab. ousesbele-Garoua FAC 50 140 175 130 371 150 FRS 50 140 175 130 481 300 FEDIV 29 1150 b05 605 192 400

Rehab.erberati-Carnot-BDaro FAC 190 475 400 750 265

ConstrKctionof Bridges*213 FE)IV 35 30 954 300 FEDV 300 1500 BAEA 205 600

Third HighwayProject IDA 210 KuwaitFund 235 30 National Budqet 4 4

FourthNighwayProject IDA 1571 2614 2000 BDEAC 40 340 90 ADF 120 662 490 KuwaitFund 205 130 OPEC 150 BO0 Nbtionalhdget 54 80

Roadflaintenance(incl.participation in fourth 70 600 1090 100 1146 1464 HighwyProject throughROad Fund)

Reconstitutionof Autopark JAPAN 500 600 700 810 910 NationalBudget 5 - 138 -

Table SA38: (Continued) Page9 of 11

1960 1991 1982 1983 1984 1995

RDADETWORK (Ccotinued)

Rehat. of Rural Construction wUeP 139 155 National Budget 95

Rea.0Daara-Sibut FEDV 890 626 200

Road Pedhab.in Cotton Zone FAC 600 cCCE 300

Nicro-RoadProject FEDV 30 9 FAC 10 20 15

Rural Roads(GHM) FR6 400 National Budget 50

CartographiqueStudies 10

Construction Fourth Road 400

CoverBDagei-Bassembele IDA 1907 1025 36 ADF 645 95 16 CUNEITFUND 432 32B 10 National Budget 112 72 39

Sub-Total : ROADNETWORK 4810 4045 3395 7656 9382 10173

RIVERTRANSPORT

Replacement& Repair of Barges(SOCATRAF.FAC) 625 165 190

Aquisition of Doat,Repairof Barges(CCCE) 350

Nodernization Port of Buagui (FEDIV) zo0 412

Compressorfor ACCF

River Transport Studies(FED) i2 12

Sub-Total: RIVERTRANSPIRT 625 465 942 0 12 12 - 139 -

fable SA 39: ICeatinued) Pap 10 of 11

19B0 1991 1992 193 1994 1995

AIR TUMSPORT

Securit Installations Airport flPoko (FACI 75 125 90

Installations for Boeing747 FEDIV 970 COE 70D 115 FAC 186 64

Equipnt IASECIAD 121

ueather Services (ASECE) 132

Interal Airport (FRS) 22 2$

Baigmi Airportlimprov.landing piste) 250

Sub-Total : AIR TRANSPORT 75 125 90 970 1161 453

TRANSPORT

Inter CMR(National 0udit) 150 60

Technical Assistance FE 250 104 104 FEDIV 21

Bangui (FAC) 300 136

B4RSEICCCE) 500 215

HydrcarbarweConvoy (CCCE) 38 2

Study in Transi ti - UIIP 19

AIR AFRItE lNationul Budget) 300 200

Sub-Total: TRANSPORT 0 0 0 1538 637 304

TELECUEMICATIO S

Provisional Repair of TelephoneMetuwrk BDEAC 120 120 FAC 10 40 15

GroundStation SUCATI 150 CME 375 255 BNEAC 400 - 140 -

Table Sa 38: (Continued) Page I1 of It

1980 1981 1982 1963 1994 19M

TELECOBUUIICATIONS(Continued I

Hedernization of TelephoneNetwork Bangui ABB 300 40 2500 -DEAC 267 22 400 other (MlUD 72 110

Internal Radio Ctoumnication(FACI 139

Telephne etork in Provinces

Network Bangui-Brazzaville (BDEACI

Postal Services UhW 70 41 OCPT [7 85

Radio EmergencyRepair (FAC) 45 15

Installation of TwoSenders FAC 175 100 BlEAC

Installation of TwoSenders CHINA 400 2SO National Dudget 5

ONI (National Budget) 30

Sub-total : TELECOMIUNICATIONS 10 730 912 1368 522 3149

TOTAL: INFRASTRUETURE 5520 S365 5229 11532 11714 14091

SOCIALAFFAIRS

Urban Development 190 20

Educational Investoents 151 378 1209 1346 1597 1139

Public Health Investments 98 642 664 1972 681 2962

Public Administration 475 635 1335 2327

Total : SOCIALAFFAIRS 24? 1675 1893 3953 3613 6429

TOTALINVESTMENT PRDORA 11834 16491 17489 28574 30913 45402 =_ ======- == - 141 -

Table SA39: CAR- INVESTMENTPROMGRM, GRANTS & LOANs, 1980-B5

I in millirns of current CFAF

19B0 19B1 1982 1983 19B4 1985 11

GRANITLOAN GRANTLOAN GRATLUMI GRANTLOAN GRAT LORA GBRNTLOAN

RURALDEVELOMElNT

AGRCILMTUE 1313 350 1682 1380 1725 1070 3302 2807 648 3144 5701 7794 LIVESTOCK 297 160 187 446 132 400 99 689 444 439 563 900 FISHNEING 141 315 411 408 264 126 FORESTRY 470 652 1045 646 524 715 SUB-TOTAL:RIURAL DEVELDPMEIT 2221 510 2836 1826 3313 1470 4455 3496 7717 3583 7105 9694

INDUSTRY

MINES& GEOLOGY 550 1796 3175 211 1300 167 250 300 250 MUIJFACTURING 2609 2659 659 312 1793 140 707 1518 1367 3139 ENERGY& lATER 90 190 430 900 354 914 214 971 1394 1897 TOURISN 85 154 107 100 326 105 334 657 SUB-TOTAL:INDUSTRY 3334 0 4789 0 4371 1212 2459 2610 1213 3073 3141 5943

IWFRASTRUCTURE

ROADIETNOIRK 1293 3527 2025 2020 3385 6634 1022 4962 4420 4823 5350 RIVERTRANSPORT 625 465 592 350 12 12 AIRTRANSPORT 75 125 90 370 600 461 700 95 368 TRANSPORT 957 Sal 340 297 304 TELECOMNIUICATIONS IG 235 495 292 520 264 1104 187 335 249 2900 SUB-TOTAL: INFRASTRUCTURE 1993 3527 2850 2515 4359 B70 9225 3307 5962 5752 5473 8619

SOCIALAFFAIRS

URBANDEVELOPMENT 190 20 EDUCATIONALINVESTHENTS 115 36 303 75 526 693 342 1004 409 1188 539 600 PUBLICHEALTH 99 642 46 61B 1194 799 417 264 2012 950 PUBLICADINISTRATION 475 313 322 392 953 1127 1200 SUB-TOTAL: SOCIAL AFFAIRS 213 36 1600 75 592 1301 1939 2114 1209 2405 3678 2750

TOTALRECORDED INVESTENT 7761 4073 12075 4416 12635 4853 16977 11597 16100 14813 19397 26005

11 Projections.

Source Central African authorities. - 142 -

Table Sa 40: CAR- INVESTHENTPRMRAS AND ACTUAL INVESTlENT EIPENDITURES, 1971-8S

in millions of current CFAF

TOTAL TOTAL PLANNED ACTUAL PLNED ACTUALEXPENDITURES IWNESTNENTEXPENDITURES INVESTIENT TOTAL 1971-75 1971-75 1976-90 1976 1977 1979 1979 1980 1976-bEta

RURALDEVELOPHENT 12802 6770 28759 1139 821 1226 2119 2731 8036 INDUSTRY 12552 11389 20566 3330 5059 4073 2309 3334 18104 IWRASTRUCTURE 15016 9311 64050 1589 1791 1933 4781 5520 15614 SOCIALAFFAIRS 1088 11253 19473 1707 2194 1802 2505 249 9057 TOTAL 51259 lb 38723 132948 7765 10464 9034 11714 11934 50811

FINAC1IND DINESTIC 17034 13813 56990 19972 (Percentage) 33 36 43 39

SXTERNAL 34225 24910 75969 30939 (Percentage) 67 64 57 61

TOTAL TOTAL PLANNED ACTUALEXPENDITURES PLANNED ACTUALEXPENDITURES INVESTINET- -- INVESTMENT------TOTAL PROJEC.TOTAL 19B0-811a 1990 1981 1980-41la 1Y82-85Ic 1982 1983 19B4 1985 182-95

RURALDEVELDPIINT 14429 2731 4662 7393 41911 4783 7951 11300 1579 39933 INDUSTRY 2745 3334 4799 8123 29590 5583 5136 4296 9084 24091 INFRSTRIETURE 19543 5520 5365 10895 42392 5229 11532 11714 14091 42566 SOCIALAFFAIRS 9370 249 1675 1924 9362 1893 3953 3613 6428 197 TOTAL 45097 11934 16491 28325 122145 17489 28574 30913 45402 122377

FINANCING DGhESTIC 3495 4714 8209 13436 3652 4481 4973 7623 20729 lPercentagel 30 29 29 11 21 16 16 17 17

EXTERNAL 8339 11765 20104 108709 13936 24093 25940 37779 101648 (Percentage) 70 71 71 99 79 84 94 83 83

/a The 1976-80 DevelopmentPlan and 1990-81 Intermediate ReconstructionPlan overlap; 1980 is part of both plas. Ib Excluding private investment. Volumehas beenrevised downwardrepeatedly. Plan implementation ratios are therefore distorted. Ic Revised from CFAF135.7 billion in Proqraa.eNational d'Action 1982-85.

Source:Central African authorities and staff estimates. Table SA 41

EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31, 1984 DEBT REPAYAqLE IN FOREIGN CURRENCYAND GOODS (IN THOUSANDSOF U.S. DOLLARS)

D E B T UTSTA N I N I N A R R EA R S TYPE OF CREDITOR _._ ...... _._ ... ,,,,,,,,,,_._...... CREDITOR COUNTRY DISIURSED :UNDISUURSED: TOTAL PRINCIPAL INTEREST ...... _ . ._...... _...... SUPPLIERS CREDITS AUSTRIA 408 - 4058 - FRANCE 2.435 - 2.43! - - ITALY 1,113 * 1,83 3Il 304 SWITZERLAND 226 - 226 24 62 YUGOSLAVIA 17,610 - 17,010 - - MULTIPLELENDERS 2,198 - 2.198 - - TOTAL SUPPLIERS CREDITS 24,460 24,460 395 3s6 FINANCIAL INSTITUTIONS FRANCE 419 - 415 10 29 NETH. ANTILLES 1,975 - 1,975 1,975 730 TOTAL FINANCIAL INSTITUTIONS 2.390 - 2,390 1.985 759 MULTILATERAL LOANS AFRICAN OEV. BANK 1,613 12,610 14,223 12 S6 AFRICAN DEV. FUND 26,005 13,346 39,351 - 4 BADEIAABEOA 1,502 4,948 6,450 - - BDEAC 3.132 4,216 7,346 15e 71 EEC 500 - gOO - - EUROPEANINVEST BANK 1,850 1,743 3,193 - IDA 49.090 24,118 73,276 - - IMF TRUST FUND 11,175 - V 175 - INTL FUND ARG(IFAD) 1,496 3.504 s.>00 - - OPEC SPECIAL FUND 1,753 4.835 6,16 -- TOTAL MULTILATERAL LOANS 96,116 69,390 167,506 171 161 SILATERAL LOANS AUSTRIA 1,508 - 1,506 - CHINA 4,395 10,210 14,605 - - FRANCE 50,625 15,184 66,009 - - GERMANY,FED.REP. OF 2,657 - 2,697 - - IRAO 4,101 - 4,101 - - ITALY 1,913 - 1,913 - - KUWAIT 4,794 5,570 10,364 - - SOUTH AFRICA 6,194 - 6,194 437 Is SWITZERLAND 7,764 - 7,764 - - UNITED KINGDOM 469 - 49 -- UNITED STATES 6,572 - e 672 - - USSR 3,518 - 3,518 561 95 MULTIPLELENDERS 4,776 - 4,778 434 - TOTAL BILATERAL LOANS 99,508 30,964 130,472 1,432 113 ------...... TOTAL EXTERNAL PUBLIC DEBT 224,474 100.354 324,626 3,963 1,419

NOTES: (1) ONLY DEBTS WITH AN ORIGINAL OR EXTENDEDMATURITY OF OVER ONE YEAR ARE INCLWED IN THIS TAULE. (2) DEBT OUTSTANDING INCLUDES PRINCIPAL IN ARREARSBUT EXCLUDES INTEREST IN ARREARS. Table SA 42

SERVICE PAYMENTS, COMMITMENTS. DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT PROJECTIONS BASED ON DEBT OUTStANDING INCLUDING UNOISBURSED AS OF DEC. 31, 1984 DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) TYPE OF CREDITOR SUPPLIERS CREDITS TOTAL YEAR DEBT OUTSTANOING AT T R A N S A C T I O N S D U R I N a P E R I O D OTHER CHANGES BEGINNING OF PERIOD :.:------. ------...... __ ------...... ___.__..___ DISBURSED : INCLUDING COMMIT- : DISBURSE- : S E R V I C E P A Y M E N T S CANCEL- ADJUST- ONLY :UNDISBURSED: MENTS : MENTS :---- ...... :------:LATIONS MENT * PRINCIPAL INTEREST TOTAL (1) (2) (3) (4) (5) (6) (7) (8) (9) 1970 7.232 8.415 230 230 1,313 363 1,676 1,183 -1 1971 6.148 6,14B 5,803 S82 1,096 325 1,421 - 558 1972 6,456 11,413 22,663 5,050 822 299 1,121 - -27 1973 10,754 33,227 247 14.790 1,717 465 2,182 2,037 1,896 1974 24,415 31,616 6.345 2,179 484 2,663 - 1,027 1975 29,669 30,464 201 996 1,498 1,264 2,762 - -533 1976 28,634 28,634 898 898 1i037 620 1,657 -567 1977 27,928 27,928 8,694 8,694 776 430 1,206 3,469 1978 39,315 39,315 12.737 12,737 2,235 1,179 3.414 5,344 4,991 1979 49,464 49,464 - - 165 153 318 4,272 2,739 1980 47,766 47,766 6.094 6,094 872 57 929 265 -14,900 1981 37.,o3 37.803 - - 1,593 506 2,099 - -5.994 1982 30,216 30.216 974 974 803 240 1,043 - *,435 1983 28,952 28,952 - - 1,437 316 1.753 - -1,038 1984 26,477 26,477 - - 994 248 1,242 - -1,023 1985 24,460 24,460

S * * S * * THE FOLLOWING FIGURES ARE PROJECTED . . * * * *

1985 24,460 24,460 - - 2.408 1.165 3,573 - -396 1986 21,656 21.656 - - 2,503 1,040 3,543 - -1 1987 19,152 19,152 - - 2,682 910 3,592 - - 1988 16,470 16,470 - - 2.783 788 3,571 -t 1989 13,660 13,686 - - 2,782 667 3,449 - -1 1990 10,903 10,903 - 2,153 548 2,701 - - 1991 8,750 8,70 -- 2.069 441 2.510 - -1 1992 6,580 6,680 - - 1,846 337 2.183 - - 1993 4,834 4,834 - - 1,624 245 1.869 - - 1994 3,210 3,210 - - 1,612 155 1,767 - - 1995 1,598 1,598 - - 1.598 66 1,664 - -

* THIS COLUMN SHOWS THE AMOUNT OF ARITHMETIC IMBALANCE IN THE AMOUNT OUTSTANDING INCLUDING UNOISBURSED FROM ONE YEAR TO THE NEXT. THE MOST COMMON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER Of DEBTS FROM ONE CATEGORY TO ANOTHER IN THE TABLE. Table SA 43

SERVICEPAYMENTS, COMMITMENTS. DISBURSEMENTS AND OUTSTANDINGAMOUNTS OF EXTERNALPUBLIC DEBT PROJECTIONSEASED ON DEBT OUTSTANDINGINCLUDING UNDISIURSED AS OF DEC. 31. 1984 DEBT REPAYABLEIN FOREIGN CURRENCYAND GOODS (IN THOUSANDSOF U.S. DOL,ARS) TYPE OF CREDITOR FINANCIALINSTITUTIONS TOTAL YEAR DEBT OUTSTANDINGAT : T R A N S A C T I O N S D U R I N G P E R I OD OTHER CHANGES BEGINNINGOF PERIOD : DISB3RSED : INCLUDING COMMIT- : DISBURSE- S E R V I C E P A Y M E N T S CANCEL- : ADJUST- ONLY :UNDISBURSED: MENTS : MENTS ------:-...... ------: LATIONS : MENT * : : : : :RPRINCIPAL INTEREST TOTAL : (1) : (2) : (3) (4) : (6) : (6) (7) (8) : 9 1970 ------_ _ 1971 - - 2,444 - . _ 1972 - 2.444 71 1.403 - 36 36 - -1 1973 1,402 2.514 - 1,100 - 103 103 - 6 1974 2,507 2,520 490 13 12 187 199 - 4 1975 2,512 3,002 - . 328 356 154 510 - -1 1976 2,483 2.645 - 162 - - - - 6 1977 2.039 2,639 - - - 99 99 - 3 1978 2,642 2,642 1.975 1,976 - - - Ua 1979 4.625 4,625 - - _ _ 3 1980 4,028 4,628 - - - - -. - *a 1981 4,620 4,620 193 193 2 4 6 - -2,156 1982 2,655 2,655 627 027 2 3 5 - -3L 1983 3,227 3,227 - - 236 70 306 - -350 1984 2.641 2,641 - - 183 34 217 - -66 1Ses 2,390 2,390

* * S * * * THE FOLLOWINGFIGURES ARE PROJECTEDS * * * * *

1985 2,390 2,390 - - i67 44 211 - -1,985 1986 238 238 - - . 38 30 s - -1 1987 199 199 - - 0 28 34 - - 1906 193 193 - - 41 26 67 - 1989 151 151 - - 41 20 61 - -l 1990 109 109 - - 38 15 53 - - 1991 71 71 - - 35 9 44 - -1 1992 35 35 - - 35 4 39 - -

* THIS COLUMNSHOWS THE AMOUNToF ARITHMETICIMBALANCE IN THE AMOUNtOUTSTANDING INCLUDING UHOISBURSED FRON ONE YEARTO THE NEXT. THEMOST COMMON CAUSES OF IMBALANCESARE CHANGESIN EXCHANGERATES AND TRANSFER OF DEBTS FROMONE CATEGORY TO ANOTHERIN THE TABLE. Table SA 44

SERVICE PAYMENTS, COMMITMENTS, DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT

PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISCURSED AS OF DEC. 31. 1984 DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) TYPE OF CREDITOR MULTILATERAL LOANS CREDITOR COUNTRY IDA TOTAL YEAR : DEBT OUTSTANOING AT : T R A N S A C T I O N S D U R I N G P E R I O D OTHER CHANGES BEGINNING OF PERIOD

DISBURSED : INCLUDING COMMIT- DISBURSE- : S E R V I C E P A Y M E N T S : CANCEL- : ADJUST- ONLY :UNDISSURSEO: MENTS MENTS :------:------:------: LATIONS ; MENT * : : : : PRINCIPAL: INTEREST: TOTAL (1) : (2) (3) : (4) : (5) : (6) (7) (a)( (9)

1970 - 4,200 4,300 220 - - - - - 1971 220 6.500 - 2,167 - 7 7 - - 1972 2,387 9,S00 3,900 3,375 - 22 22 - 291 1973 6,053 12,691 - 1,352 -3 36 G-as 1974 8,091 13,377 - 971 - 40 40 1 1975 9,062 13,378 - 641 - 106 06 - - 1976 9,703 13,378 - 219 - 70 70 - - 1971 9,922 13,376 - 962 - 93 93 - - 1978 10,884 13,378 15,500 612- - 1979 11,496 28,878 2,500 7,121 - 72 72 - - 1980 18,617 31,378 5,467 10,264 96 170 266 * -111 - 1981 28,804 36,630 3,893 4,451 .94 171 265 -520 1982 33,107 39,917 17,699 2,12S 114 242 356 - -477 1983 34,909 57,216 21,169 3,790 133 257 390 - -1,770 1984 38,218 76,481 - 12,041 034 398 532 174 -2,695 1985 49,090 73,278

*** * * THE FOLLOWING FIGURES ARE PROJECTED * * * * * *

1985 49,090 73,278 - 9,824 133 484 617 - - 1986 58,781 73,145 - 8,822 133 507 640 - -2 1987 67,468 73,010 - 5,542 133 529 662 - - 1986 72,877 72,877 - - 211 544 755 - 1989 72,666 72,666 - - 368 542 910 - - 1990 72,298 72,298 - - 495 640 1,035 * - 1991 71.803 71,803 - - 620 536 1,156 - - 1992 71,183 71,183 - - g9B 531 1,429 - -1 1993 70,284 70,284 - - 1,234 524 1,758 - 2 1994 69,052 69,052 - - 1,330 516 1,846 - -1 1995 67,721 67,721 * - 1,330 504 1,834 -1 1996 66,390 66,390 - - 1,330 494 1,824 - - 1997 65,060 65,060 - - 1,330 484 1,814 - -1 1998 63,729 630729 - - 1,485 475 1,960 - 1999 62,244 62,244 - - 1,640 463 2,103 - I

* THIS COLUWESHOWS THE AMOUNTOF ARITHMETIC IMBALANCE IN THE AMOUNTOUTSTANDING INCLWING UNDISOURSEDFRnN ONE YEAR TO THE NEXT. THE MOSTCOMMON CAUSES OF IMBALANCESARE CHANGESIN EXCHANGERATES AND TRANSFEROF DEBTS FROMONE CATEGORYTO ANOTHERIN THE TABLE. Table SA 45

SERVICE PAYMENTS, COMMITMENTS, DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISPURSED AS OF DEC. 31, 1984 OEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) TYPE OF CREDITOR MULTILATERAL LOANS TOTAL YEAR : DEBT OUTSTANDING AT : T R A N S A C T I O N S D U R I N G P E R I O D OTHER CHANGES : BEGINNING OF PERIOD : ______------_------_ ------…____ _-_-___-----__-______...._._._...... DISBURSED : INCLUDING COMMIT- : DISBURSE- : S E R V I C E P A Y M E N T S CANCEL- ADJUST- ONLY :UNDISBURSED: MENTS : MENTS :------:------LATIONS MENT * : : : : : PRINCIPAL : INTEREST TOTAL : 1) : 2) : 3) : 4) : (5) : {) : 7) (a{) : (9)

1970 - 4,200 4,300 220 - - - ' 1971 220 o,500 - 2,167 - 7 7 - 1972 2,387 8.500 3,900 3,375 22 22 - 291 1973 6,053 12,691 1,193 1,352 -3 36 699- 1974 8,091 14,583 . - 971 40 40 - 1I 1975 9,062 14,602 11,186 1,175 - 106 106 - -457 1976 10,218 25,331 1,750 559 - 70 70 - -89 1977 10,775 21,992 12,399 3,049 79 122 200 - 1,036 1978 13.803 40,349 29,246 10,221 125 72 197 - 2.338 1979 24,371 70,808 9,328 11,790 43 142 185 - 571 1980 36,333 30,664 16,774 23,152 96 355 451 - -1,913 1981 51,622 95,424 5,939 12,219 111 420 531 - -5,799 1932 63,074 95,453 49,468 7,921 308 633 941 - -3,601 1983 73,517 141,012 39,650 12,474 792 235 t,727 - -5,925 1984 82,104 172,946 5,376 21,774 1.398 1,105 2.503 174 -9,246 1985 98,116 167,503

* * * * * * THE FOLLOWING FIGURES ARE PROJECTED * * * * * *

1985 93,116 167,503 - 28,794 2,744 1,450 4,194 - -167 19s6 123,996 164,592 - 22,565 3,790 1,836 5,626 - 1987 142,769 160,802 - 16,365 4.399 2,276 6,675 - 1998 154,735 16E,403 - 1,668 ,501 2,553 6,054 - I 1919 150,903 150,903 - - 4,828 2,562 7,390 - -4 1990 146,071 146,071 - - 4,650 2,417 6,967 - 2 1991 141,523 141,523 - - 3,923 2,249 6,072 - 1992 137,700 137,700 - - 4,207 2,081 6,295 6 1993 133,487 133,487 - - 4,679 1,925 6,604 - I 1994 128,609 128,609 - - 4,729 1,771 6,500 - -3 1995 124,077 124,077 - - 4,560 1,630 6,190 - -1 1996 119,516 119,516 - - 4,751 1,475 6.226 - -2 1997 114,763 114,763 - - 4,634 1,316 5,950 - -4 1995 110,125 110,125 - - 4.147 1,171 5,91 - -1 1999 101,377 105,377 - - 4.642 1,036 5,67 - -l

* THIS COLUMNSHOWS THE AMOUNTOF ARITHMETIC IMBALANCE IN THE AMOUNTOUTS(ANDING INCLUDING UNDISBuRSEDrROM ONE YEAR TO THE NEXT. THE MOSTCOMMON CAUSES OF IMBALANCESARE CHANGESIN EXCHANGERATES AND TRANSFEROF DEBS FROMONE CATEGORYTO ANOTHERIN THE TABLE. Table SA 46

SERVICE PAYMENTS, COMMITMENTS. DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDIS6URSED AS OF DEC. 31, 1984 DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS Of U.S. DOL.LARS) TYPE OF CREDITOR BILATERAL LOANS TOTAL YEAR : DEBT OUTSTANDING AT : T R A N S A C T I O N S D U R I N G P E R I O D OTHER CHANGES BEGINNING OF PERIOD ...... ------...... __ .... …...... …...... DISBURSED : INCLUDING COMMIT- : DISBURSE- S E R V I C E P A Y M E N T S CANCEL- : ADJUST- ONLY :UNDISBURSED: MENTS : MENTS :------:------:----'------LATIONS : ENT * : : : : : PRINCIPAL: INTEREST : TOTAL : (1) : (2) : (3) : (4) : (5) (:) (7) (a) (9)

1970 17.323 20,72 2,071 1.338 975 292 1,267 - I 1971 17.687 21,969 3,356 898 496 224 720 20 1,293 1972 19,309 26.102 4,194 6,217 291 195 486 7,466 523 1973 18,067 23,062 451 2,091 1,780 561 2,341 2 2,459 1974 20.185 24,190 6,163 2,232 1,297 495 1,782 165 2,172 1975 22,633 31,073 20,870 10,835 1.706 601 2,307 298 -3,923 1976 29,967 46,016 4,719 8,351 851 210 1,061 - -11 1977 37,118 49,866 so 9,576 2,068 543 2,631 - 2,971 1978 47,261 50.039 2,909 3,478 1923 114 307 21,404 3,463 1979 32.206 35,614 3,620 1,305 79 97 171 - -1,221 1980 32,13B 37,934 31,045 1,.463 99 84 183 - 14,284 1 191 59,265 83,164 14,753 21,891 1.069 194 1,263 - 4,043 I 1982 89,405 101,791 14,230 9,470 1,198 1,614 2,812 - 4,1S4 - 1983 103,636 118,077 50,161 20,430 8,746 5,331 14,013 - -13.00s a 1984 106,181 146,691 7,685 11,919 3,829 4,294 8,123 2,969 -17.503 1 1985 69,506 130,475

* * * * * * THE FOLLOWING FIGURES ARE PROJECTED * * * * * 0

1985 99,508 130,475 - 13,332 7,982 4,685 12,667 - -1,431 1986 1023426 121,056 - 7,783 7,359 4,590 12,449 -1 196t 103,348 113 198 - 5,726 8,340 4,223 12,563 - -2 1983 100,730 104,853 - 3,587 9,948 3,766 13,734 - -2 1989 94.366 94,006 - 371 12,346 3,172 15,53a - -1 1990 62,369 82.539 - 123 10,727 2,466 13,193 - 2 1991 71,768 71,815 - 47 7,446 2,021 9,467 - -2 1992 64,367 64,367 - - 7,620 1,631 9,301 - 1 1993 56.746 56,748 - - 6,510 1,338 7,846 - -2 1994 50.236 50,236 - - 5,917 1,133 7,050 - -1 1995 44,318 44,318 - - 5s,50 962 6,541 - 1 1996 38,739 38,739 - - 4,656 790 5.446 -1 1997 34.082 34.082 - - 4,65 669 5.325 - 1 1998 29,427 29,427 - 4,175 548 4,723 - -3 1999 25,24 25249 - 3,485 439 3,924 - i

. THIS COLUMNSHOWS THE AMOUNTOF ARITHMETIC IMBALANCEIN THE AMOUNTOUTSTANDING INCLUDING UNDIS8URSEDFROM ONE YEAR TO THE NEXT. THE MOSTCOMMON CAUSES OF IMBALANCESARE CHANGESIN EXCHANGERATES AND TRANSFEROF DEBTS FROMONE CATEGORYTO ANOTHERIN THE TABLE. Table SA 47

SERVICE PAYMENTS, COMMITMENTS, DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31, 1984 DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) TOTAL YEAR DESTB.UtSTANOING AT T R A N S A C T I O N S D U R I N G P E R I O D OTHER CHANGES BEGINNING OF PERIOD ------. -. - ...... -....------. . . . --- …...------. ... ------...... DISBURSED : INCLUDING COMMIT- DISBURSE- S E R V I C E P A Y M E N T S CANCEL- ADJUST- ONLY :UNDISBURSED: MENTS MENTS :------.------LATIONS :NENT : : : : : PRINCIPAL : INTEREST TOTAL : (t) (2) (3) (4) (s) (6) (7) (8) (9) 1970 24,555 33,487 6,601 1,788 2,283 65S 2.943 1,183 1971 24.055 36,617 11,603 4,047 1,592 556 2,148 20 1,651 1972 28,152 48,459 30,828 16,045 1,113 552 1,665 7,466 786 1973 36,276 71,494 1,891 *9.333 3.497 1.165 4.662 2.039 5.060 1974 55,258 72.909 6,653 9,611 3,478 1,206 4,684 165 3,222 1975 63,876 19,141 32,257 13,334 3,560 2,125 5,685 298 -4,914 1976 71,302 102,626 7,367 9.970 1,l88 900 2,788 - 6o0 1977 78.460 107,425 21.179 21,319 2,942 1,194 4,136 - 7,483 1978 103,021 133.145 45,067 28,411 2.553 1,365 3,918 26,743 1o,soo 1979 110,666 160,511 12,948 13,095 287 392 679 4.272 2,092 1960 120,865 170,992 53,913 40,709 1,067 496 1,563 285 -2,542 1981 160,310 221,011 20,885 34,303 2.775 1,124 3,899 - -9,006 1982 190,350 230.115 65,299 18,992 2,311 2,490 4,801 - -935 1983 209,332 292,168 90,215 32,904 11,21t 6,656 17,869 - -22,216 1984 216,403 348.954 13,261 33,693 6,404 5,681 12,085 3,143 -27,640 1985 224,474 324,828

* e* * * * THE FOLLOWING FIGURES ARE PROJECTED * 0 * 0 * 0

1985 224,474 324,828 - 42,126 13,30t 7,344 20,6. - -3,923 19sa 249,316 307,544 - 30,348 14,.190 7.496 21,68b - -3 1987 265,468 293,351 - 22,091 15,427 7,437 22,864 - -2 1983 272,123 277,922 - 5,255 18,273 7,153 25.428 - -3 1989 259,106 259.646 371 20,017 6,421 26,438 - -7 1990 239,452 239,622 - 123 17,468 5.446 22,914 - 5 1991 222,112 222,159 - 47 13,373 4,720 16,093 - -4 1992 208,782 203,782 - - 13,706 4,110 17,818 -5 1993 195,069 195,069 - - 12,313 3,Sud 10,321 - -1 1994 182,255 182.255 - - 12,258 3,059 15.317 - -4 1995 169,992 169,993 - - 11,733 2,653 14,396 - 1996 153,255 158,255 - - 9,407 2,265 11,672 - -3 1907 148,845 148.845 - - 9,290 1,985 11,275 -3 1998 139,552 139.552 - - 8,922 1,719 10,641 - -4 1999 130,626 130.626 - - 8.127 1,475 9,602 -

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