A World Bank review of the Central African Republic's public finances, published on July 2, 2026, noted a "structural budget imbalance" within the nation's economy. The document stated that current expenditures consistently exceed domestic revenues annually, indicating a fundamental challenge in the country's fiscal management. For 2025, domestic revenues were approximately 187 billion CFA francs. The review also noted a significant reliance on external support, with donors contributing about 43.5% of the state's total revenues between 2016 and 2024. This substantial dependency shows the vulnerability of the national budget to fluctuations in foreign aid and international priorities.
Persistent Fiscal Pressures
The Central African Republic's total budget for 2025 is approximately 385 billion CFA francs. Domestic revenues accounted for 10.1% of the country's Gross Domestic Product (GDP) in 2025, a figure that the World Bank review suggests is insufficient to meet the nation's expenditure needs. Between 2016 and 2021, foreign resources financed approximately 84% of public investments, further illustrating the critical role of external funding in the country's development initiatives. This high reliance on external financing for public investment points to a limited capacity for self-funded development.
The wage bill has consistently consumed a significant portion of domestic resources, placing considerable strain on the national budget. In 2020, the wage bill represented 52% of domestic resources. This figure rose sharply to 70% in 2022 and further increased to 73% in 2023, indicating a growing proportion of internally generated funds being allocated to public sector salaries. More recently, the wage bill was around 59% in both 2024 and 2025, still representing a substantial allocation of the country's own revenues. Such high wage bill percentages restrict the government's ability to allocate funds to other critical sectors like infrastructure, health, and education.
Public debt has also seen a substantial increase, rising from 44.4% to 62% of GDP since 2020. This rise is attributed to the freezing of regular budget support, according to the World Bank review, forcing the government to seek alternative financing methods. The report also indicates that the state allocates only about 1.3% of GDP to health expenditures, a figure that is notably low when considering the health needs of the population. This limited investment in health is a key concern noted by the review.
Impact of Conflict and Sectoral Shortfalls
Real revenues in the Central African Republic are estimated at approximately 8% of GDP in the context of ongoing conflict, which the World Bank review indicates is significantly lower than a potential 13% in a non-conflict scenario. This stark difference notes the profound economic cost of instability. The annual revenue loss due to conflict is estimated at about 5.4 percentage points of GDP, amounting to nearly 114 million dollars between 2013 and 2022. This substantial loss of revenue directly impacts the government's capacity to provide essential public services and invest in development. Security spending in the country doubled between 2016 and 2021, reaching about 3.4% of GDP during that period, reflecting the escalating costs associated with maintaining peace and order in a volatile environment.
Conversely, public spending on education was approximately 2.1% of GDP, while health received about 1.3% of GDP. These figures are considerably lower than international benchmarks and national objectives. Nearly a quarter of the country's revenues originate from fuel taxes, which experienced a significant 60% decline in 2022, impacting overall revenue collection. This reliance on a volatile revenue source like fuel taxes exposes the budget to external shocks. Forestry revenues are estimated at about 3.7 billion CFA francs annually, although their potential is assessed at 9.1 billion CFA francs, suggesting a significant untapped resource. Similarly, mining revenues currently stand at close to 500 million CFA francs, with an estimated potential of 6.4 billion CFA francs, indicating that better management and formalization of the mining sector could yield substantial benefits.
Education receives about 10% of public spending, which contrasts sharply with an international target of 20%, showing a significant underinvestment in human capital development. Health receives 6.4% of public spending, falling short of the 15% objective set by the Abuja Declaration, a commitment by African Union member states to allocate a minimum percentage of their annual budget to improve the health sector. The public primary education system faces a significant challenge with 271 students per state-paid teacher, noting severe resource constraints and potential impacts on educational quality. 37% of the total education budget is allocated to higher education, which raises questions about resource distribution across different levels of the education system, particularly given the challenges in primary education. The state spends only about 1.3% of GDP on health, a figure that remains critically low for addressing the widespread health needs of the population.
Transparency and Governance Gaps
In Bangui, the capital, only one out of every eight companies operates formally, with the remaining seven functioning informally. This high degree of informality limits the tax base and hinders effective revenue collection, contributing to the structural budget imbalance. The Central African Republic ranks 115th out of 125 countries in the Open Budget Index, an assessment of budget transparency, indicating serious deficiencies in public financial accountability and information disclosure. This low ranking suggests a lack of public access to budget information and limited oversight mechanisms.
In 2023, 63% of public procurement contracts were awarded through negotiated processes, bypassing open tenders. This prevalence of negotiated contracts raises concerns about transparency, fairness, and potential for corruption in public spending. Public companies ENERCA (responsible for electricity), SODECA (responsible for water), and SOCATEL (responsible for telecommunications) collectively hold debt exceeding 4% of GDP, posing a significant fiscal risk to the state. These debts indicate operational inefficiencies or undercapitalization within these vital public service providers. Only 11% of investments financed by domestic resources were executed in 2023, pointing to severe implementation bottlenecks and an inability to effectively utilize available internal funds for development projects.
Proposed Solutions and Reform Roadmap
The World Bank review outlined an ambitious objective to increase the Central African Republic's revenue from approximately 10% of GDP to 12% in the short and medium term, with a long-term goal of reaching 15%. Achieving these targets would significantly improve the country's fiscal autonomy and reduce its reliance on external aid. The report suggests that digitizing the tax administration could generate up to two additional percentage points of GDP in the short term, by improving collection efficiency and broadening the tax base. This technological upgrade represents a concrete step towards revenue mobilization.
The proposed roadmap for improvement focuses on three main axes: mobilizing more revenue, improving spending efficiency, and strengthening transparency. These interconnected pillars aim to address the root causes of the fiscal challenges identified in the review. Initial reforms concern areas such as fuel taxation, treasury and debt management, fiscal digitization, budget transparency, and the coordination of external aid. These immediate measures are designed to stabilize public finances and create a more predictable fiscal environment. For the longer term, recommendations include implementing electronic public procurement to enhance transparency and competitiveness, establishing a digital land registry to improve property taxation and land management, reforming public enterprises like ENERCA, SODECA, and SOCATEL to reduce their fiscal burden and improve service delivery, and reallocating spending to prioritize health and education, aligning expenditures with critical development needs and international commitments. These full reforms aim to build a more resilient, transparent, and effective public financial management system for the Central African Republic.