Country Report Central African Republic October 1998 Main report

Outlook for 1999-2000: Growth targets are ambitious but achievable

The new enhanced structural adjustment facility (ESAF) with the IMF sets a target for GDP growth of 5% in 1999 and 5.2% in 2000, while the current- account deficit is set to fall to 6% of GDP in 1999 and 5.4% of GDP the following year). These targets do not look unrealistic, but their fulfilment will largely depend on factors outside the government's control, such as world market prices for the country's most important exports -- diamond, coffee, cotton and wood -- and weather conditions in cash-crop production areas. Moreover, poor security in rural areas is seriously disrupting buyers' collection of coffee and diamonds from artisanal producers. Poverty alleviation is an important component of the ESAF plan. To some extent, this will be achieved through increases in health and education expenditure, but the decisive factor will be the scale and distribution of growth within the economy.

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