2017 Index of Economic Freedom

Central African Republic

overall score51.8
world rank151
Rule of Law

Property Rights12.6

Government Integrity28.7

Judicial Effectiveness33.0

Government Size

Government Spending94.1

Tax Burden65.8

Fiscal Health84.1

Regulatory Efficiency

Business Freedom27.2

Labor Freedom42.7

Monetary Freedom68.2

Open Markets

Trade Freedom55.2

Investment Freedom80.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 4.8 million
  • GDP (PPP):
    • $3.0 billion
    • 4.3% growth
    • -4.7% 5-year compound annual growth
    • $630 per capita
  • Unemployment:
    • 7.6%
  • Inflation (CPI):
    • 5.4%
  • FDI Inflow:
    • $3.0 million
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The Central African Republic is one of the world’s least-developed countries. More than half of its people live in rural areas and depend on subsistence agriculture. Progress in developing a more stable climate for entrepreneurial activity has been only marginal. The CAR scores very poorly on such regulatory factors as the business and investment climate, labor market flexibility, and taxation.

The overall economic environment is further undermined by ongoing political and security challenges. The inability to deliver basic services reliably has severely eroded confidence in the government, and weak rule of law and pervasive corruption seriously impede prospects for economic development.

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Background

In early 2013, Muslim Seleka rebels led by Michel Djotodia ousted President François Bozizé. The sectarian violence that followed precipitated a French intervention in December 2013, and the U.N. deployed almost 12,000 peacekeepers starting in September 2014. Djotodia stepped down early in 2014 and was replaced by interim President Catherine Samba-Panza. Voters overwhelmingly approved a new constitution by referendum in December 2015, and former Prime Minister Faustin-Archange Touadéra was elected president in a runoff vote in February 2016. A cease-fire was signed in April 2015, but the violence, which has resulted in about 6,000 deaths and more than 800,000 refugees and internally displaced persons, continues. The CAR has abundant timber, diamonds, gold, and uranium.

Rule of LawView Methodology

Property Rights 12.6 Create a Graph using this measurement

Government Integrity 28.7 Create a Graph using this measurement

Judicial Effectiveness 33.0 Create a Graph using this measurement

Protection of property rights is weak. There have been numerous reports of armed militias entering homes without judicial authorization, seizing property without due process, and evicting residents both in the capital city of Bangui and throughout the countryside. The new government is struggling to provide basic protection and services. Ordinary citizens have very limited access to justice. Corruption remains pervasive.

Government SizeView Methodology

The top personal income tax rate is 50 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax. The overall tax burden equals 4.4 percent of total domestic income. Government spending has amounted to 14 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.2 percent of GDP. Public debt is equivalent to 65.0 percent of GDP.

Regulatory EfficiencyView Methodology

Establishing a business remains time-consuming, and other burdensome and opaque regulatory requirements increase the cost of conducting business. The labor market remains severely underdeveloped. Government distortions of the economy through subsidies and wage and price controls are exacerbated by persistent political volatility that undermines the functioning of state institutions.

Open MarketsView Methodology

Trade is moderately important to the Central African Republic’s economy; the value of exports and imports taken together equals 40 percent of GDP. The average applied tariff rate is 14.9 percent. The government taxes exports and restricts sugar imports. The financial system is underdeveloped, and access to financing for businesses remains very limited. Less than 1 percent of the population has access to banking services.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius74.70.0
2Botswana70.1-1.0
3Rwanda67.64.5
4Côte d'Ivoire 633.0
5Namibia62.50.6
6South Africa62.30.4
7Seychelles61.8-0.4
8Swaziland61.11.4
9Uganda60.91.6
10Burkina Faso59.60.5
11Benin59.2-0.1
12Mali58.62.1
13Gabon58.6-0.4
14Tanzania58.60.1
15Madagascar57.4-3.7
16Nigeria57.1-0.4
17Cabo Verde56.9-9.6
18Democratic Republic of Congo56.410.0
19Ghana56.2-6.8
20Guinea-Bissau56.14.3
21Senegal55.9-2.2
22Comoros55.83.4
23Zambia55.8-3.0
24São Tomé and Príncipe 55.4-1.3
25Mauritania54.4-0.4
26Lesotho53.93.3
27Kenya53.5-4.0
28The Gambia53.4-3.7
29Togo53.2-0.4
30Burundi53.2-0.7
31Ethiopia52.71.2
32Sierra Leone52.60.3
33Malawi52.20.4
34Cameroon51.8-2.4
35Central African Republic51.86.6
36Niger50.8-3.5
37Mozambique 49.9-3.3
38Liberia49.1-3.1
39Chad492.7
40Sudan48.8N/A
41Angola48.5-0.4
42Guinea47.6-5.7
43Djibouti46.7-9.3
44Equatorial Guinea451.3
45Zimbabwe445.8
46Eritrea42.2-0.5
47Republic of Congo 40-2.8
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