[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111882-en":3,"doc-seo-111882-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},111882,13056703019662,"Evangeline","https://ap-avatar.wpscdn.com/avatar/be000253a8e92610077?_k=1778726343310543188",8,"Research & Report","Central African Republic - Joint World Bank-IMF Debt Sustainability Analysis - High-Risk Assessment","Central African Republic remains at high risk of external debt distress and overall high risk of debt distress. While public debt is projected to be sustainable, substantial liquidity risks persist, driven by possible donor support shortfalls and limited domestic/regional market access. The April 2023 approval of the ECF-supported program catalyzed regional financing, but geopolitical tensions and uncertainty around cryptocurrency law and tokenization heighten external financing risks. Compared with the prior DSA, domestic debt rises with CEMAC borrowing, and liquidity indicators breach for five years starting 2023 due to obligations to the Fund. Stress tests, macroeconomic and financing uncertainty, and contingent liabilities underpin the high-risk conclusion.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nAbebe Adugna and Manuela Francisco (IDA) and Vitaliy Kramarenko and Jarkko Turunen (IMF) .  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \n\n| CENTRAL AFRICAN REPUBLIC: BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | High |\n| Overall risk of debt distress | High |\n| Granularity in the risk rating | Sustainable |\n| Application of judgment | No |\n\nThe Central African Republic (CAR) remains at high risk of external debt distress and overall high risk of debt distress. 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 approval of the ECF-supported program in April 2023 catalyzed regional market financing, albeit the country still faces high uncertainty regarding external financing amidst geopolitical tension and the continued uncertainties created by the introduction of the law on cryptocurrencies and, more recently, on the tokenization of natural and land resources. Compared to the previous DSA, 1 domestic debt has increased due to ramped-up borrowing in the CEMAC regional debt market amid delayed donor budget support. The present value of debt-to-GDP is also elevated following data outturn in 2022 resulting in abreach in the threshold in 2024. While solvency indicators for external debt remain below thresholds, liquidity indicators for external debt (debt service-to-exports and debt service-to-revenue) exhibit breaches for 5 years starting in 2023, largely on account of obligations to the Fund falling due. Sensitivity of debt indicators to standard stress tests, significant macroeconomic and financing uncertainty, and sizeable contingent liabilities are all considerations supporting the high-risk assessment. This assessment is predicated on the authorities’ continued prioritization of and the ability to secure grant financing for essential current  \n1 The current DSA follows the revised Debt Sustainability Framework (DSF) for LICs and Guidance Note (2017) in effect as of July 1, 2018.  \nspending and developmental projects.2  \n1. The coverage of public sector debt includes external and domestic contractual obligations of the central government, unchanged from the previous DSA. State and local governments do not borrow, there are no social security funds guaranteed by the public sector , and the government has not guaranteed other debt (Text Table 1) . The coverage of public sector debt exhibits some gaps, notably non-guaranteed SOE debt and supplier arrears. Post HIPC arrears of the central government account for less than 1 percent of GDP. A full arrears determination is expected this year as the public sector begins a plan to negotiate with all creditors it has arrears in an attempt to resolve them. The limited debt coverage is symptomatic of capacity weakness to effectively collect debt data, thus limiting the scope for a full-scale debt analysis.  \n2. The implementation of the new legal framework governing SOEs would improve their financial oversight, which, along with other steps, should lead to better debt coverage going forward. Under the World Bank Sustainable Development Financing Policy (SDFP), the government has completed and published in 2021 the audits of the three largest state-owned enterprises operating in the energy, telecommunications, and water sectors (ENERCA, SODECA, SOCATEL) . The objective of the audit was to assess their financial viability, increase the transparency in contingent liabilities reporting, and clarify the status of unaudited domestic arrears.3 The government prepared and approved a cross-debt settlement plan for these SOEs based on these recent audits.4  \n3. The DSA includes a combined contingent liabilities stress test, which assumes a tailo","cbCailGzOPZX3IC7","https://ap.wps.com/l/cbCailGzOPZX3IC7","pdf",709665,1,22,"English","en",105,"# Key Risk Findings\n## External Debt Distress Assessment\n## Overall Debt Distress Assessment\n# Drivers of Liquidity and Financing Uncertainty\n## Donor Support and Market Access\n## Program Approval and Regional Financing\n## Geopolitical and Crypto-Related Uncertainty\n# Methodology and Policy Context\n## Revisions Compared with Previous DSA\n## Coverage of Public Sector Debt\n## Contingent Liabilities Stress Test\n# Implications and Next Steps\n## Grant Financing Priority\n## Debt Data Capacity and Arrears Resolution","[{\"question\":\"What is the debt distress risk level for the Central African Republic in this analysis?\",\"answer\":\"The analysis rates the country as high risk for external debt distress and high risk for overall debt distress.\"},{\"question\":\"Why do liquidity indicators breach for several years starting in 2023?\",\"answer\":\"Liquidity indicators breach for five years starting in 2023, largely because obligations to the Fund are falling due.\"},{\"question\":\"How does this DSA treat contingent liabilities and what shocks are assumed?\",\"answer\":\"It uses a combined contingent liabilities stress test with a tailored shock at 15 percent of GDP, including higher assumed shocks for non-guaranteed SOE debt and domestic arrears to reflect elevated 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is the debt distress risk level for the Central African Republic in this analysis?","Question",{"text":75,"@type":76},"The analysis rates the country as high risk for external debt distress and high risk for overall debt distress.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Why do liquidity indicators breach for several years starting in 2023?",{"text":80,"@type":76},"Liquidity indicators breach for five years starting in 2023, largely because obligations to the Fund are falling due.",{"name":82,"@type":73,"acceptedAnswer":83},"How does this DSA treat contingent liabilities and what shocks are assumed?",{"text":84,"@type":76},"It uses a combined contingent liabilities stress test with a tailored shock at 15 percent of GDP, including higher assumed shocks for non-guaranteed SOE debt and domestic arrears to reflect elevated 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