Central African Republic - Joint World Bank-IMF Debt Sustainability Analysis
The Central African Republic (C.A.R.) remains at high risk of external debt distress and overall high risk of debt distress under the revised Debt Sustainability Framework (DSF), unchanged from the 2018 DSA. Solvency indicators (the present values...
| Main Authors: | , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/756551570788378574/Central-African-Republic-Joint-World-Bank-IMF-Debt-Sustainability-Analysis-July-2019 http://hdl.handle.net/10986/32581 |
| Summary: | The Central African Republic (C.A.R.)
remains at high risk of external debt distress and overall
high risk of debt distress under the revised Debt
Sustainability Framework (DSF), unchanged from the 2018 DSA.
Solvency indicators (the present values of the external
public and publicly guaranteed debt-to-GDP and
debt-to-exports ratios) remain below their relevant
thresholds in the baseline scenario. However, liquidity
indicators (debt service-to-exports and debt
service-to-revenue ratios) breach their thresholds in the
baseline scenario. Further considerations support the
high-risk assessment: the debt indicators are sensitive to
standard stress tests; macroeconomic projections are highly
uncertain in a volatile security environment; and sizeable
contingent liabilities, notably related to the large stock
of unaudited potential domestic arrears and the limited
financial information available on state-owned enterprises,
could materialize. C.A.R.’s debt sustainability is also
sensitive to a deterioration of the financing mix. A
tailored scenario in which grant financing (of 2 percent of
GDP) is replaced by concessional external debt-financing
from 2021 onwards would worsen debt sustainability
considerably. This shows that the government’s investment
program requires grant financing, with concessional debt
financing to be considered in exceptional cases. |
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