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Economy of the Central African Republic: Wikis

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The country has rich but largely unexploited natural resources; meanwhile, forestry remains an important contributor to the C. A. R. economy.

The Central African Republic is classified as one of the world's least developed countries, with an estimated annual per capita income of $310 (2000).

Sparsely populated and landlocked, the nation is overwhelmingly agrarian, with the vast bulk of the population engaged in subsistence farming and 55% of the country's GDP arising from agriculture. Subsistence agriculture, together with forestry, remains the backbone of the economy of the Central African Republic (CAR), with more than 70% of the population living in outlying areas. The agricultural sector generates half of GDP. Principal foodcrops include cassava, peanuts, sorghum, millet, maize, sesame, and plantains. Principal cash crops for export include cotton, coffee, and tobacco. Timber has accounted for about 16% of export earnings and the diamond industry for nearly 54%.

Contents

Infrastructure

Though periodically unusable, the Ubangi River is nonetheless an important transportation route.

Much of the country's limited electrical supply is provided by hydroelectric plants based in Boali. Fuel supplies must be barged in via the Oubangui River or trucked overland through Cameroon, resulting in frequent shortages of gasoline, diesel, and jet fuel. The C.A.R.'s transportation and communication network is limited. The country has only 429 kilometers of paved road, limited international, and no domestic air service, and does not possess a railroad. River traffic on the Oubangui River is impossible from April to July, and conflict in the region has sometimes prevented shipments from moving between Kinshasa and Bangui. The telephone system functions, albeit imperfectly. Four radio stations currently operate in the C.A.R., as well as one television station. Numerous newspapers and pamphlets are published on a regular basis, and one company has begun providing Internet service.

Agriculture

The Central African Republic's economy is dominated by the cultivation and sale of foodcrops such as yams, cassava, peanuts, maize, sorghum, millet, sesame, and plantains. The importance of foodcrops over exported cash crops is illustrated by the fact that the total production of cassava, the staple food of most Central Africans, ranges between c. 200,000 and 300,000 tons a year, while the production of cotton, the principal exported cash crop, ranges from c. 25,000 to 45,000 tons a year. Foodcrops are not exported in large quantities but they still constitute the principal cash crops of the country because Central Africans derive far more income from the periodic sale of surplus foodcrops than from exported cash crops such as cotton or coffee. Many rural and urban women also transform some foodcrops into alcoholic drinks such as sorghum beer or hard liquor and derive considerable income from the sale of these drinks. Much of the income derived from the sale of foods and alcohol is not "on the books" and thus is not considered in calculating per capita income, which is one reason why official figures for per capita income are not accurate in the case of the CAR. The per capita income of the CAR is often listed as being around $300 a year, said to be one of the lowest in the world, but this figure is based mostly on reported sales of exports and largely ignores the more important but unregistered sale of foods, locally-produced alcohol, diamonds, ivory, bushmeat, and traditional medicines, for example. The informal economy of the CAR is more important than the formal economy for most Central Africans.

Fishing

Fishing is carried on extensively along the rivers, but most of the catch is sold or bartered on the Democratic Republic of the Congo (DRC) side of the Ubangi River. In 1950, the government began a fish-farming program, and by the end of 1968 there were almost 12,000 ponds. The 2003 fish catch was about 15,000 tons.

Forestry

There are 22.9 million hectares (56.5 million acres) of forest (37 percent of the total land area), but only 3.4 million hectares (8.4 million acres) of dense forest, all in the south in the regions bordering the DRC. The CAR’s exploitable forests cover 27 million hectares (68 million acres), or 43% of the total land area. Transportation bottlenecks on rivers and lack of rail connections are serious hindrances to commercial exploitation. Most timber is shipped down the Ubangi and Zaire rivers and then on the Congo railway to the Atlantic. More than a dozen types of trees are felled, but 95 percent of the total is composed of obeche, sapele, ebony, and sipo.

A dozen sawmills produced 516,000 cu m (18 million cu ft ) of sawn logs and veneer logs in 2003. The government is encouraging production of plywood and veneer. Roundwood removals were estimated at 2.8 million cu m (99.7 million cu ft ) in 2003. Competition from lower-cost Asian and Latin American loggers has hurt the local industry, which is encumbered with high transportation and labor costs. In 2003, the country exported $89.8 million of forest products.

Natural resources

The country has rich but largely unexploited natural resources in the form of diamonds, gold, uranium, and other minerals. Diamonds constitute the most important export of the CAR, frequently accounting for 40-55% of export revenues, but an estimated 30-50% of the diamonds produced each year leave the country clandestinely. There may be petroleum deposits along the country's northern border with Chad. Diamonds are the only of these mineral resources currently being developed; reported sales of largely uncut diamonds make up close to 60% of the CAR's export earnings. Industry contributes less than 20% of the country's GDP, with artesian diamond mining, breweries, and sawmills making up the bulk of the sector. Services currently account for 25% of GDP, largely because of the oversized government bureaucracy and high transportation costs arising from the country's landlocked position.

Economic aid and development

The CAR is heavily dependent upon multilateral foreign aid and the presence of numerous NGO's which provide numerous services which the government fails to provide. As one UNDP official put it, the CAR is a country "sous serum," or a country hooked up to an IV. (Mehler 2005:150) The very presence of numerous foreign personnel and organizations in the country, including peacekeepers and even refugee camps, provides an important source of revenue for many Central Africans.

A bricklayer in Paoua, Central African Republic.

In the 40 years since independence, the C.A.R. has made slow progress toward economic development. Economic mismanagement, poor infrastructure, a limited tax base, scarce private investment, and adverse external conditions have led to deficits in both its budget and external trade. Its debt burden is considerable, and the country has seen a decline in per capita GNP over the last 40 years. Important constraints to economic development include the CAR's landlocked position, a poor transportation system, a largely unskilled work force, and a legacy of misdirected macroeconomic policies. The 50% devaluation of the currencies of 14 Francophone African nations on 12 January 1994 had mixed effects on the CAR's economy. Diamond, timber, coffee, and cotton exports increased, leading an estimated rise of GDP of 70% in 1994 and nearly 50% in 1995. Military rebellions and social unrest in 1996 were accompanied by widespread destruction of property and a drop in GDP of 2%. Ongoing violence between the government and rebel military groups over pay issues, living conditions, and political representation has destroyed many businesses in the capital and reduced tax revenues for the government.

The IMF approved an Extended Structure Adjustment Facility in 1998. The government has set targets of annual 5% growth and 25% inflation for 2000-2001. Structural adjustment programs with the World Bank and IMF and interest-free credits to support investments in the agriculture, livestock, and transportation sectors have had limited impact. The World Bank and IMF are now encouraging the government to concentrate exclusively on implementing much-needed economic reforms to jump-start the economy and defining its fundamental priorities with the aim of alleviating poverty. As a result, many of the state-owned business entities have been privatized and limited efforts have been made to standardize and simplify labor and investment codes and to address problems of corruption. The Central African Government is currently in the process of adopting new labor and investment codes.

Statisticscitations needed!

GDP: purchasing power parity - $3.007 billion (2007 est.)

GDP - real growth rate: 4% (2007 est.)

GDP - per capita: purchasing power parity - $700 (2007 est.)

GDP - composition by sector:
agriculture: 55%
industry: 20%
services: 25% (2001 est.)

Household income or consumption by percentage share:
lowest 10%: 0.7%
highest 10%: 47.7% (1993)

Inflation rate (consumer prices): 0.9% (2007 est.)

Labor force: 1.857 million (2006)

Unemployment rate: 8% (23% for Bangui) (2001 est.)

Budget:
revenues: $250 million
expenditures: $273 million (2007 est.)

Industries: diamond mining, sawmills, breweries, textiles, footwear, assembly of bicycles and motorcycles

Industrial production growth rate: 3% (2002)

Electricity - production: 109 million kWh (2005)

Electricity - production by source:
fossil fuel: 19.05%
hydro: 80.95%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 101.4 million kWh (2005)

Electricity - exports: 0 kWh (2005)

Electricity - imports: 0 kWh (2005)

Agriculture - products: cotton, coffee, tobacco, manioc (tapioca), yams, millet, maize, bananas; timber

Exports: $146.7 million (f.o.b., 2007 est.)

Exports - commodities: diamonds, timber, cotton, coffee, tobacco

Exports - partners: Canada 38.8%, Belgium 15.5%, Indonesia 6.5%, Italy 5.2%, France 4.8%, Spain 4.7%, Democratic Republic of the Congo 4.6% (2007)

Imports: $237.3 million f.o.b. (2007 est.)

Imports - commodities: food, textiles, petroleum products, machinery, electrical equipment, motor vehicles, chemicals, pharmaceuticals, consumer goods, industrial products

Imports - partners: France 16.2%, Netherlands 12.7%, Cameroon 9.5%, US 6.2% (2007)

Debt - external: $1.153 billion (2007 est.)

Economic aid - recipient: ODA, $95.29 million; note - traditional budget subsidies from France (2005 est.)

Currency: 1 Communaute Financiere Africaine franc (CFAF) = 100 centimes

Exchange rates: Communaute Financiere Africaine francs (XAF) per US dollar - 481.8 (2007), 522.59 (2006), 527.47 (2005), 528.29 (2004), 581.2 (2003

Fiscal year: calendar year

See also

External links

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