- Economy of 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 fromagriculture . 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 includecassava ,peanuts ,sorghum ,millet ,maize ,sesame , andplantains . Principal cash crops for export includecotton ,coffee , andtobacco .Timber has accounted for about 16% of export earnings and the diamond industry for nearly 54%.Infrastructure
.
Agriculture
The Central African Republic's economy is dominated by the cultivation and sale of foodcrops such as yams,
cassava ,peanut s,maize ,sorghum ,millet ,sesame , andplantain s. The importance of foodcrops over exportedcash 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 ofcotton , 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 orcoffee . Many rural and urban women also transform some foodcrops intoalcoholic drinks such assorghum beer orhard 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 calculatingper 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 ofexport s and largely ignores the more important but unregistered sale of foods, locally-produced alcohol,diamonds ,ivory ,bushmeat , andtraditional medicine s, for example. Theinformal economy of the CAR is more important than the formal economy for most Central Africans.Natural resources
The country has rich but largely unexploited natural resources in the form of
diamond s,gold ,uranium , and othermineral s. Diamonds constitute the most important export of the CAR, frequently accounting for 40-55% of exportrevenue s, but an estimated 30-50% of the diamonds produced each year leave the country clandestinely. There may bepetroleum deposits along the country's northern border withChad . 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 , andsawmill s making up the bulk of the sector. Services currently account for 25% of GDP, largely because of the oversized governmentbureaucracy and hightransportation 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 oneUNDP official put it, the CAR is a country "sous serum," or a country hooked up to anIV . (Mehler 2005:150) The very presence of numerous foreign personnel and organizations in the country, including peacekeepers and evenrefugee camp s, provides an important source of revenue for many Central Africans.had mixed effects on the CAR's economy. Diamond, timber, coffee, and cotton exports increased, leading an estimated rise of GDP of 7% in 1994 and nearly 5% 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 2.5% inflation for 2000-2001. Structural adjustment programs with theWorld Bank and IMF and interest-free credits to support investments in theagriculture ,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.Statistics
GDP:purchasing power parity - $5.8 billion (1999 est.)
GDP - real growth rate:5% (1999 est.)
GDP - per capita:purchasing power parity - $1,700 (1999 est.)
GDP - composition by sector:
"agriculture:"53%
"industry:"21%
"services:"26% (1997 est.)Population below poverty line:NA%
Household income or consumption by percentage share:
"lowest 10%:"NA%
"highest 10%:"NA%Inflation rate (consumer prices):2.6% (1999 est.)
Labor force:NA
Unemployment rate:6% (1993)
Budget:
"revenues:"$638 million
"expenditures:"$1.9 billion, including capital expenditures of $888 million (1994 est.)Industries:
diamond mining, sawmills, breweries, textiles, footwear, assembly of bicycles and motorcyclesIndustrial production growth rate:NA%
Electricity - production:105 GWh (1998)
Electricity - production by source:
"fossil fuel:"19.05%
"hydro:"80.95%
"nuclear:"0%
"other:"0% (1998)Electricity - consumption:98 GWh (1998)
Electricity - exports:0 kWh (1998)
Electricity - imports:0 kWh (1998)
Agriculture - products:
cotton ,coffee ,tobacco ,manioc (tapioca ), yams,millet ,maize ,banana s; timberExports:$195 million (f.o.b., 1999)
Exports - commodities:
diamond s, timber,cotton ,coffee ,tobacco Exports - partners:
Benelux 36%,Côte d'Ivoire 5%,Spain 4%,Egypt 3%,France (1997)Imports:$170 million (f.o.b., 1999)
Imports - commodities:food, textiles, petroleum products, machinery, electrical equipment, motor vehicles, chemicals, pharmaceuticals, consumer goods, industrial products
Imports - partners:
France 30%,Côte d'Ivoire 18%,Cameroon 11%,Germany 4%,Japan (1997)Debt - external:$790 million (1999 est.)
Economic aid - recipient:$172.2 million (1995); note - traditional budget subsidies from France
Currency:1 Communaute Financiere Africaine franc (CFAF) = 100 centimes
Exchange rates:Communaute Financiere Africaine francs (CFAF) per US$1 - 647.25 (January 2000), 615.70 (1999), 589.95 (1998), 583.67 (1997), 511.55 (1996), 499.15 (1995)
"note:"since1 January 1999 , the CFAF is pegged to the euro at a rate of 655.957 CFA francs per euroFiscal year:calendar year
ee also
*
Central African Republic
*Economy of Africa External links
*dmoz|Regional/Africa/Central_African_Republic/Business_and_Economy/Economic_Development
Wikimedia Foundation. 2010.