Economic crisis hits Central African Republic
Posted in Central African Republic, africa, aid on Aug 12th, 2009 No Comments »
The Central African Republic (CAR) is a land-locked, conflict-ridden and desperately poor country the size of France, which has gone through 30 years of economic and social decline. In 2008 it ranked 178 out 179 on the UN’s Human Development Index, making CAR one of only two African countries that have not seen any development progress since the early 1980s.
Heavily dependent on diamond and wood exports, CAR has been hit quicker and harder by the global economic crisis than most other African states. High production costs – due to small-scale methods, prohibitive transportation costs and very high costs of doing business – severely limit the competitiveness of CAR’s exports. Reductions in global demand therefore quickly translate into production cuts, layoffs and declining government revenue. The global economic crisis represents a severe risk for CAR’s fragile economy and political system.

Source: World Bank Country Assistance Strategy CAR (2009)
Heavily concentrated in the South, diamond production (in carats) declined almost 80 percent from peak to trough during the course of 2008, or 21 percent compared to 2007. Wood production declined more than 70 percent from peak to trough, or 20 percent compared to 2007. There are no reliable unemployment statistics. Yet, companies working in the South confirm that most of Central Africans previously working in mining and forestry have been laid off.
The social impact on the previously stable southern regions has been severe. Collapsing incomes have led to increasing social tensions among the unemployed population. Malnutrition rates among children have risen rapidly, as parents are no longer able to provide for their children. About 16 percent of children under five are acutely malnourished in the three most heavily affected provinces. Alarmingly, almost 7 percent are severely acutely malnourished. With the northern parts of CAR locked-down in rebellion, Continue Reading »












