The Central African Republic (CAR) is the first country in Africa, and the second in the world after El Salvador to name Bitcoin as a legal tender.

The nation is still among the world’s poorest countries, and continues to tackle a social unrest that has persisted since 2013 when a civil war broke out. Now, is the CAR’s bitcoin push helping better shape its financial infrastructure and economic backbone?

Over 60% of the CER’s population (about 5.5 million) lives in poverty, whereas the country has some vital natural resources with timber and diamonds dominating exports, according to the U.S. Agency for International Development.

Here are some of the economic highlights from the country’s financial news.

January 2023 – Mixed Bag for Economic Outlook

The International Monetary Fund (IMF) signalled a worsening economic outlook for CAR, underlined by fuel shortages and soaring food prices, following the war in Ukraine, leading to a record double-digit inflation.
The African Development Bank (AfDB) predicted that this year’s GPD growth for the country would rebound to 3.9% in 2023, boosted by the completion of structural projects in transport and energy. The bank also attributed the growth to agriculture, mining, and public works.
The Sango Project, which manages the national token named Sango Coin and which is built on top of the Bitcoin Network, announced that the government task force is working to change the laws in order to integrate the cryptocurrency.

February 2023 – Easing Inflation

The inflation rate cooled to 8.1% in February from a high of 10.4% a month earlier. In CAR, the inflation is measured by a broad rise or fall in prices that consumers pay for a standard basket of goods.

March 2023 – Delays on National Crypto Token Listing

Cointelegraph reported that the country will delay the listing of its cryptocurrency project, Sango Project. The government had made significant progress in crafting laws to allow Sango Coin to be listed on crypto exchanges, the report said.
The annual inflation rate in the CAR slowed to 5.3% in March, the lowest since September 2022.

April 2023 – IMF Relief

The benchmark interest rate in the CAR rose to 5% from a low of 3.5% in April 2022.
The IMF Executive Board approved an Extended Credit Facility (ECF) arrangement of about US$191.4 million with the CAR. The ECF-supported program helps meet CAR’s protracted balance of payment needs, sustain priority spending on basic public services in health and education, and provide a policy framework to advance key reforms.

May 2023 – Improved Outlook for 2023

The IMF released a report that was more upbeat on the country’s economic outlook for 2023. Real GDP growth is projected to rebound to 2.2% in 2023, driven partly by the base effect and a policy adjustment paving the way for improved fuel supply. Inflation is expected to average 6.3% in 2023, the IMF said.
CAR’s public debt is projected to be sustainable, though there exist substantial liquidity risks, as shown by relevant debt indicators, stemming from possible shortfalls in donor support and domestic/regional market access, the IMF document stated.

-Edited by Shigeru Sato, Faustine Ngila
-Top Photo: National flag of the Central African Republic / Unsplash