Rebooting CAR economy 'a tall task'

2013-04-02 10:13
Seleka rebels in the Central African Republic (File, AFP)

Seleka rebels in the Central African Republic (File, AFP)

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Bangui - The new government has optimistically promised that business activity will resume on Tuesday, but getting the Central African Republic's economy back on its feet will be no easy task after the havoc wreaked by the country's latest coup, experts said.

"You cannot decree a recovery," noted Serge-Alain Yabouet-Bazoly, a former minister and legal advisor for the Groupement Interprofessionnel de Centrafrique (GICA), one of two employer federations in the country.

The new national unity government has pledged to resume administrative services on Tuesday, 10 days after the capital Bangui fell to rebels from the Seleka coalition who ousted president Francois Bozize.

Sporadic looting in the capital continues however, and companies have paid a high price in a country of five million people that was already one of the poorest in the world owing to repeated rebellions and corruption that made it hard to develop mineral deposits and other natural resources.

In December, GICA estimated the economic cost of the Seleka uprising, which was then in its early stages, at 27 billion CFA francs ($5.2m), and "this figure has probably mushroomed since", estimated GICA president Patrick De Jean.

The federation comprises 23 large companies that account for 45% of the country's local tax revenues, or roughly 130 billion CFA francs.

The state's coffers are now empty however.

"As things stand now, it is impossible to get things going again. Before anything else you have to re-establish security," De Jean noted.

Critical situation

"Work sites must be safe so that people return to their jobs, and neighbourhoods must be safe so that they do not fear leaving families alone at home. For now those conditions have not been met," he added.

Companies have also been subjected to racketeering by Seleka rebels, and De Jean acknowledged having to pay 20 million CFA francs to Seleka officers to protect his business, the Centrafrican Cigarette Society (Socaci), as the capital was being sacked.

"The ones who are robbing you offer to protect you," he said.

Big companies have banded together meanwhile and reached an agreement with Chadian soldiers who are part of the international force Fomac, paying 400 000 CFA francs per soldier for protection until the crisis is resolved.

Small companies have been hit even harder, and De Jean warned that "there will be many bankruptcies".

Small business owners say the situation is becoming critical for them, with one noting that "people don't have any more money. They have not been paid and they are not working any more".

As for the banks, "computers were stolen in many branches", explained Ecobank managing director Stephane Doukoure.

"We will have trouble reopening them if they don't have access to clients' accounts," he added.

Threat of armed gangs

In addition, "the administration has not resumed, and the central bank is thus 'out' for now. We cannot get supplies of cash and there will surely be a great demand for it. It's dangerous because there is the risk of not having enough for everyone, not to mention the threat of armed gangs showing up when we open the vaults".

Finally, lots of companies will need loans to start up again, but given the poor economic perspectives, banks will be wary of lending money to companies in dire straits.

"Technical unemployment and just plain unemployment will spread. Unfortunately, this crisis deals a fatal blow" to business activity, said Pierre Slovene, deputy head of the Union of Centrafrican Workers (USTC).

Long term, employers hope external aid will help keep mass unemployment at bay. "Otherwise it's impossible," said De Jean, before condemning errors made by former presidents, including Ange-Felix Patasse, who was deposed by Bozize in 2003.

"Patasse, Bozize, it has been the same thing for years. What we need now is a sustainable political situation so that things don't flare back up again. The future depends on it."

Read more on:    seleka rebels  |  francois bozize  |  central african republic  |  coups  |  central africa

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