Central African Republic
Privatisation planned in Central African Republic

afrol News, 8 December - According to letter from the Central African Minister of Finance and Budget, Eric Sorongopé, to the IMF the country is planning to privatise several key sectors as part of the structural reforms demanded by the Worldbank and IMF. 

According to the letter, dated 19 November, The Central African government had "discussed with World Bank and [IMF] Fund staff structural reforms to be implemented in 2002." 

Sorongopé says the core component of the structural reforms discussed includes "an acceleration of the privatisation process, with the selection of private operators for ENERCA, SOCATEL, and the water utility (SNE), and the completion of the privatisation of "second-tier" companies." 

2002 structural reforms also included the "establishment of a petroleum management information system to provide up-to-date information on domestic supply and demand and on world market conditions, and to assist in the negotiations with domestic oil companies on monthly revisions to the price structure for petroleum products."

The Central African Republic further was to implement measures, including an appropriately flexible producer price policy consistent with international market trends, "aimed at permanently eliminating the deficits of the public cotton agency (SOCOCA)," which, in the past, had repeatedly exerted substantial fiscal pressures

Sorongopé also promised his government would initiate a liberalization of the trade regime for sugar, "with a view to enhancing the efficiency of the national sugar enterprise (SOGESCA)." 

- The Government also intends to undertake various diagnostic studies in the mining, forestry, health, and education areas before launching reforms as part of its poverty reduction strategy, Sorongopé writes. "In this connection, the priorities identified therein will be critical inputs for our full poverty reduction strategy paper, which we expect to complete by mid-2002."

Furthermore, this year, the Central African government had sold that part of the petroleum distribution network that had not previously been allocated to Trans-Oil (a national company), "which adheres to all of the terms of the privatisation framework that governs the import, storage, and distribution of petroleum products in the Central African Republic." 

- TOTAL and Trans-Oil now have equal shares in the storage company (SOGAL), and, with the divestiture of public officials who held shares in Trans-Oil, the status of Trans-Oil has been changed to a limited liability company, with its capital to be distributed among local private operators and international companies, Sorongopé informed the IMF. 

Recently, the liquidation of the state-owned petroleum company (PETROCA) had been completed.

Sorongopé lamented there had been "intermittent political turmoil and labour unrest" in 2001, which had contributed to "significant slippages" in other aspects of the implementation of the structural reform programme, as well as in overall programme performance.

On 27 May, an IMF mission to Bangui had reached understandings with the government on various measures to move forward with structural reforms. However, just hours after the mission's departure, an attempted coup d'état had resulted in numerous casualties, thousands of displaced persons, and appreciable destruction of property. 

The coup attempt and its aftermath had "foreclosed any possibility" for the government to bring the IMF-supported programme for 2001 "back on track," Sorongopé notes.

UN Secretary-General Kofi Annan on 5 July in a report to the UN Security Council warned that the Central African Republic still was "in a crisis situation". The country was facing an "economic emergency" which should be addressed through prompt assistance from the international community, Annan wrote.

Annan urged bilateral and multilateral partners to support a new 75-million US dollar "minimum plan of action for social and economic recovery" elaborated by the country's authorities. Annan also confirmed the country's claim that "poverty is the breeding ground" for the Central African Republic's instability. However, neither the World Bank nor the IMF so far have launched any new projects in the Central African Republic since the coup attempt. 

Sources: Based on IMF, CAR govt., UN sources and afrol archives

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