Economy and Business in the Central African Republic

The Central African Republic has large natural resources, especially forests and minerals, but the country’s geographical location, poorly developed infrastructure and low population, as well as political and economic mismanagement, have led them to a limited extent to social development. Central African Republic has therefore remained one of Africa’s least economically developed countries. It has significant revenues from mineral extraction, especially diamonds, but about 80% of the population is employed in agriculture, forestry and fishing, which also accounts for about half of the country’s GNI. Political unrest in the second half of the 1990s hit the economy, causing significant damage to the industry. Transport to the sea, which largely passes through the Congo, was hit by the civil war in the 1990s.

Economy and Business in the Central African Republic

Agriculture, forestry

The Central African Republic has a predominantly agriculture-dominated economy, although a significant portion of its export value comes from mining. Only about 3% of the country’s total area is cultivated; nearly half of the area is wooded. At the turn of the millennium, the agricultural sector, including forestry and fishing, accounted for over 70% of employment and close to 60% of GNI. Agriculture is concentrated in the tropical forest areas in the southwest, and the savanna in the northwest and central parts of the country. The majority of agricultural production is for local and domestic consumption; exports are limited – the country is not self-sufficient in food and must therefore import. For local consumption, especially cassava, corn, millet, sorghum (sorghum), peanuts and rice are grown. In recent years, there has been considerable investment in animal husbandry, but meat production is too small to meet the need. The export products are above all cotton and coffee, as well as some tobacco; furthermore, it is focused on vegetables. The production of coffee has undergone major fluctuations, while cotton crops increased substantially from the mid-1990s. Central African Republic has large forest areas that are underutilized. The forests (35.8 million hectares), especially in the southwest, have a lot of hard-fiber, valuable wood species. The utilization of this resource has been hampered in particular by the lack of transport opportunities, a large part of the timber transport being done by float. Exports of timber account for approx. 10% of total export value. Central African Republic has large forest areas that are underutilized. The forests (35.8 million hectares), especially in the southwest, have a lot of hard-fiber, valuable wood species. The utilization of this resource has been hampered in particular by the lack of transport opportunities, a large part of the timber transport being done by float. Exports of timber account for approx. 10% of total export value. Central African Republic has large forest areas that are underutilized. The forests (35.8 million hectares), especially in the southwest, have a lot of hard-fiber, valuable wood species. The utilization of this resource has been hampered in particular by the lack of transport opportunities, a large part of the timber transport being done by float. Exports of timber account for approx. 10% of total export value.

Mining

Central African republics have large mineral deposits, and diamond mining in particular is exploited. Diamonds are found especially west and southwest of the country. The export volume varies in part, primarily due to. smuggling across the border in the south, and the sector’s contribution to GNI is probably significantly larger than the official figures of approx. 7%. Diamonds account for approx. 40% of the country’s official export revenue.

There is also some extraction of gold. uranium, iron ore, copper and tin. Lack of infrastructure, and the need for large investments, reduces the potential for exploiting the mineral deposits.

Industry

The industry is poorly developed and consists of small enterprises in the food, wood and textile industries. Industrial production was severely affected by political turmoil from the mid-1990s, and is also suffering from inadequate energy supply. In 2000, the industry accounted for over 9% of GDP.

The country’s electricity generation is substantially from hydropower, from two stations at the M´Bali falls.

Foreign Trade

The country has a negative trade balance with foreign countries. Main export goods are diamonds, timber, cotton and coffee. Main import goods are machinery, vehicles and chemicals. France dominates as a trading partner and also provides significant financial assistance. Other important trading partners are the Netherlands, Cameroon, Japan, Switzerland, Belgium and Congo.

Transport and Communications

The country has poorly developed infrastructure and much of the country is inaccessible. This is a hindrance to economic development. The road network consists of 24,000 km, of which approx. 2% have fixed cover. The country has no railways, and plans to link Cameroon, Gabon and Sudan have been stranded on funding. Connection to the trans-African road network was completed in 1984, with a new road to Cameroon. Inland waterways make up approx. 7000 km, of which 2800 km are navigable. The Oubangui River is navigable for seagoing vessels below Bangui, which is the country’s most important port city. Over this port, most of the country’s exports go, and also parts of Chad’s exports. The main international airport is Mpoko outside Bangui.