Central African Republic

Economic Overview

The Central African Republic (CAR) is a landlocked, low-income country facing profound and protracted humanitarian, security, and developmental challenges. Its economy is characterized by fragility, a heavy reliance on subsistence agriculture, and significant untapped natural resource wealth that has often fueled conflict rather than driven development. Economic activity is severely constrained by political instability, weak institutions, poor infrastructure, and a security crisis that affects large parts of the country. The 2025-2026 outlook is highly uncertain and entirely dependent on the political and security situation, as well as the continued support of international partners and peacekeeping forces.

GDP Size & Growth Trajectory

The CAR has one of the smallest and most volatile economies in the world. Economic growth is frequently disrupted by security incidents and political instability. After a period of stagnation, modest growth is projected, but remains fragile. The World Bank forecasts growth to be around 3.0% in 2025, but this is highly contingent on a stable security environment which is far from guaranteed.

Sector Composition

• Agriculture: This is the cornerstone of the economy, contributing over 30% of GDP and providing livelihoods for the vast majority (over 75%) of the population. The sector is dominated by subsistence farming and is characterized by very low productivity. Key cash crops include coffee and cotton, but their potential is largely unrealized.
• Services: The services sector accounts for approximately 45% of GDP, consisting mainly of small-scale informal trade and public administration.
• Industry: The industrial sector is very small, contributing about 20% of GDP. It is dominated by forestry and mining. Timber is a key export, and the country has significant deposits of diamonds and gold, though much of the mining sector is informal and operates outside of state control, often linked to armed groups.

Inflation Trends

Inflation has been volatile, driven by supply chain disruptions caused by insecurity and the country's reliance on imported goods, including fuel and food.

Fiscal & Monetary Policy Stance

• Monetary Policy: As a member of the Economic and Monetary Community of Central Africa (CEMAC), monetary policy is managed by the regional central bank, the Bank of Central African States (BEAC). The currency, the Central African CFA franc (XAF), is pegged to the Euro.
• Fiscal Policy: The government is almost entirely dependent on international aid and budget support to function. Domestic revenue collection is extremely low due to the large informal economy and lack of state control over resource-rich areas.

Table 1: Key Macroeconomic Indicators (2023-2026F)

Market Size & Demand Potential

The formal domestic market is extremely small, severely limited by widespread poverty and insecurity.

Population Size and Demographics

The CAR has a population of around 5.9 million. It is facing a severe humanitarian crisis, with a large portion of the population displaced or living as refugees in neighboring countries.

Urbanization and Consumer Hubs

The capital city, Bangui, is the only major urban center and where the limited formal economic activity and government functions are concentrated.

Business Environment

The business environment is exceptionally difficult, ranking near the bottom of all global indices for ease of doing business.

Ease of Doing Business & Regulatory Reforms

Insecurity, weak rule of law, endemic corruption, and non-existent infrastructure make operating a formal business extremely challenging. There is no effective one-stop-shop for investment, and regulatory processes are opaque and unreliable.

Political Stability & Governance

The Central African Republic has been in a state of near-constant conflict and political crisis for decades.

Political Environment

The government's authority is largely confined to the capital, Bangui, while most of the country is controlled by various armed rebel groups. A large UN peacekeeping mission (MINUSCA) and other foreign forces are present in the country, attempting to maintain a fragile peace and protect civilians. The political situation is highly volatile and unpredictable.

Rule of Law & Investor Protection

The rule of law is virtually non-existent outside of the capital. There is no effective mechanism for contract enforcement or investor protection.

Infrastructure Readiness

Infrastructure is severely dilapidated or non-existent, which is a primary barrier to any form of economic development.

Transport and Logistics

As a landlocked country, the CAR relies on transport corridors through Cameroon to the port of Douala. The road network is in a state of extreme disrepair and is often impassable during the rainy season or due to insecurity, making transport and logistics incredibly slow and expensive.

Energy Sector

Access to electricity is among the lowest in the world, confined almost exclusively to small parts of the capital. The country relies on biomass (wood and charcoal) for most of its energy needs.

Sector-Specific Opportunities

Given the extreme risks, investment is almost exclusively undertaken by development finance institutions or companies with a very high tolerance for frontier risk. In a hypothetical long-term, post-conflict scenario, the following sectors would have potential:

1. Mining (Diamonds and Gold)

The country has rich deposits of diamonds and gold. Formalizing this sector and establishing a secure and transparent supply chain would be a major priority.

2. Forestry

Sustainable management and processing of the country's vast timber resources could be a source of export revenue.

3. Agriculture

Revitalizing the production of cash crops like coffee and cotton, and improving food security through investment in staple crops, would be essential for economic recovery.