Central African Republic Economy

26 January 2010
PDFPrintE-mail
Rep. Centrafricana Home Page
Economia
Politica
Notizie Utili

MACROECONOMIC  PANEL

The tensions between the various political and military personalities of the country and the past civil war have severely damaged the economy of the Central African Republic leading to a significant contraction of GDP in the early 2000s (-6.4% in 2003).

Since 2005 there was an average growth rate of GDP at around 4% annually, while income per capita is estimated at about U.S. $ 500 per year.

The few funds available to the authorities do not permit the launching of comprehensive social programs, particularly in education and health, for which the country is in a condition of strong dependence on outside parties.

The country is self sufficient in terms of food production but most of the inhabitants of living in poverty.

The majority of the population is engaged in subsistence farming and about 55% of the country's GDP comes from agriculture, which together with revenues from the exploitation of forests (20% of GDP and about 40% of exports) is one of the pillars of the economy of the country.

Cassava, peanuts, maize, sorghum, millet, sesame, plantago are the main crops but also the cultivation of cotton, coffee and tobacco  are important.

Distillation of alcoholic beverages  is widespread (beer made from sorghum and spirits).

Livestock is poor (goats and cattle).

In fact, the underground economy (smuggling of diamonds, ivory, bush meat and traditional medicine) has a dominant role than the formal economy.

The diamonds are the leading voice in the Central African Republic's exports accounting for approximately 40-55% of total volume, but approximately 30-50% of diamonds mined each year comes out of the country through illegal ways.

The country can also count on the extraction of uranium and other radioactive minerals.

Exports, especially coffee, cotton and timber, are significantly affected by the lack of an infrastructure network branched.

Most electricity is supplied by hydroelectric plants located in the south, while the supply of fuel is done primarily by land or river.

Some regions of the country's are eco-tourism’s  destinations thanks to the presence of some national parks (Dzanga-Sangha rainforest, Bamigui-Bangoran in the north and Manovo Gounda st.Floris National Park).

The banking sector is relatively dynamic in the capital where there is the presence of three commercial banks.

In this scenario, the authorities have initiated some reforms of public finances, together with the registration of a resumption of international cooperation.


COMMERCIAL OPPORTUNITIES FOR ITALIAN COMPANIES
 

Central African Republic, offers investment opportunities in the following key sectors:

Mining. Remarkable is the presence of mineral resources in Central African Republic. In particular it is necessary to note the presence of uranium, lignite, iron, copper, reserves of limestone reserves and especially diamonds and gold in the Northeast.

The Central African Republic is the fifth largest in the world for the quality of its diamonds.

In 2004, for the mining sector the government enacted a mining code for a better traceability of diamonds.

The untapped mineral wealth (uranium, iron, cement, and also the oil) are opportunities for investors.

Promotional campaigns are developed to raise awareness outside the mining potential.

Forestry. The forestry sector has played an important role in the national economy: it is the second largest exporter of value, after the diamonds.
In addition to wood, other forest products are traded with other countries.

Agriculture, Livestock and Silviculture. The agricultural sector has favorable natural conditions for its development even though many lands are uncultivated or underused.
Food crops (rice, millet and sorghum in the north, tubers, palm oil, bananas in the south, sugar cane) are consumed locally.

1.Services (especially tourism and telecommunications).
Tourism in particular appears to be underdeveloped due to lack of infrastructure. However, the country has many natural advantages that can promote development. In fact, the RCA can be described as a paradise, attracting many tourists for Safari.
2.Construction and public works. In this area  several infrastructure projects are under development, related to the implementation of micro hydro power plants, etc..
 

INDUSTRY 

The industry is poorly developed and the few plants present deal mainly with the processing of agricultural products 

 
MINING RESOURCES 

The Central African Republic is one of the largest world producers of diamonds, a field which is the second source of income of the country after deforestation. Below the subsoil there are other precious minerals: uranium, gold and iron. 
 

SECTORS IN EXPANSION 

The Central African Republic has several dynamic and growing sectors.
In fact the Government has set targets for growth in agriculture, forestry, infrastructure, mining, etc.. 

 
INVESTMENT LAW 

The Central African Republic has a Charter for investments.

The Charter for Investments, adopted in 2001 sets out the framework, which governs the domestic and foreign investments in the Central African Republic in industrial enterprises and small and medium enterprises engaged in production, storage, processing of raw materials or finished products.

The main objective of the National Charter is to promote investment in the RCA.

The Charter is applied to all industrial enterprises and to companies operating in the following areas:

• Activities of processing of vegetable or animal;
• Production and processing;
• Activities of production of energy;
• Construction Activities :economic, social and industrial;
• Activities of public works and engineering;
• Waste collection, storage, packaging and processing of agricultural products and foodstuffs;
• Activities of studies and researches;
• Activities of laboratory testing, verification or production of chemicals and pharmaceuticals;
• Activities of production of books and printing;
• Activities of assembly and maintenance of industrial equipment, transportation, telecommunications and electronics;
• Manufacture of chemicals and food products used as inputs for other sectors.
All companies which carry out the activities mentioned above, can enjoy the benefits of the Charter, except those whose business relates to the resale of goods purchased outside the company.

All activities related to forestry, mining and tourist exploitation that are governed by special laws are excluded from the scope of the present Charter of Investments.

The Charter of Investments is applied to companies that meet the following conditions:

• To present an investment program from three to five years;
• To indicate in the program as part of existing activities, the number of permanent employees;
• To keep proper accounting regardless of turnover;
• To observe the general obligations under the current legislation as regards the form of companies and related statutes. 
  

CENTRAL AFRICAN TAX SYSTEM

The  Central African tax system is composed of taxes that are classified into direct taxes (income tax of corporate and individual) and indirect taxes.

The tax on revenues of companies   are calculated on the basis of gross turnover (CA)

As for the private, the tax is subdivided as follows:
- Commercial  Non-Profit (BNC) for the professions.
- Trade and Industry Profits (BIC), for other activities. 

According to the tax system, who wants to establish a company, has the following obligations:
- Submission of 3 copies of the constitution;
- Registration (allocation of tax identification number). 

Furthermore, he must pay different taxes:
1 - Registration fee (amount varies depending on the nature of the acts);
2 - Payment of license;
3 - the final tax if the taxpayer has a turnover of less than 30,000,000 FCFA;
4 - Taxes on personal revenue.

The Central African Republic has high tax rates. The maximum rate of income tax is 50% while corporate tax is 30%. Other taxes include a value added tax (VAT) and a transaction tax of control. 


TRADE AGREEMENTS 

The country is a member of key regional and supranational economic organizations such as African Development Bank (ADB), African, Caribbean and Pacific Group of States (ACP), IMF (International Monetary Fund Internazioanle), WTO (World Trade Organization). The country depends significantly from multilateral aid and support provided by many NGOs and foreign development agencies that provide services to the local government is not currently able to provide.
As a member of CEMAC - Economic Communinty of Central African States Central African Republic is involved in a negotiation for an Economic Partnership Agreements (EPAs) with the European Union. 

 
CUSTOMS 

The duties in the Central African Republic system are mostly outgoing and relate to products which have undergone initial processing.

These duties have a figure of 20% of taxable value (TV) according to the species exported or 10% of taxable value.

For example, for processed products such as sawnwood and plywood output duties are the 10% of taxable value.

AngolaBeninBurundiCameroonGabonKenyaMalawimonzambicoNamibiaCentral-African-RepublicCongo-BrazzavillecongoRwandaSao-Tome-&-PrincipeSudanTanzaniaUgandaZambiaZimbabwe

Registrazione

Il successo del nostro portale ha reso necessaria la creazione di uno spazio risevato ai nostri utenti. Da oggi registrandosi riceverete gratuitamente:

Log in e Password per accedere all'area riservata in piena sicurezza;
News Letter, per ricevere nella casella di posta le notizie più importanti, gli appuntamenti con ItalAfrica, gli Eventi che caratterizzano la nostra attività;
Magazine, per scaricare il periodico di Italafrica;
Faq per domande per chiarimenti generali;
Info e Supporto, per parlare con gli operatori di ItalAfrica centrale.

Registrazione gratuita      e mail2 

Area Utente

Iscriviti alla NewsLetter

Iscriviti alla NewsLetter per rimanere sempre aggiornato sulle ultime notizie dall'Africa
Inserisci la mail di iscrizione per cancellarti dalla Newsletter

We use cookies to improve our website and your experience when using it. Cookies used for the essential operation of the site have already been set. To find out more about the cookies we use and how to delete them, see our privacy policy.

I accept cookies from this site.

EU Cookie Directive Module Information