2020 Index of Economic Freedom

Central African Republic

OVERALL SCORE50.7
WORLD RANK159
Rule of Law

Property Rights38.1

Judicial Effectiveness31.7

Government Integrity24.3

Government Size

Tax Burden65.5

Government Spending93.5

Fiscal Health95.3

Regulatory Efficiency

Business Freedom24.3

Labor Freedom40.4

Monetary Freedom73.3

Open Markets

Trade Freedom47.2

Investment Freedom45.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 5.1 million
  • GDP (PPP):
    • $3.6 billion
    • 4.3% growth
    • 3.8% 5-year compound annual growth
    • $712 per capita
  • Unemployment:
    • 6.5%
  • Inflation (CPI):
    • 3.0%
  • FDI Inflow:
    • $18.0 million

The Central African Republic’s economic freedom score is 50.7, making its economy the 159th freest in the 2020 Index. Its overall score has increased by 1.6 points due to an increase in the property rights score. The Central African Republic is ranked 36th among 47 countries in the Sub-Saharan Africa region, and its overall score is well below the regional and world averages.

Economic freedom in the Central African Republic has declined over time. Considered moderately free in 2003, the country has been ranked more typically as mostly unfree or repressed in the years since then. GDP growth in the past five years, however, has been solid, helped by expanded exports of diamonds.

The Central African Republic is one of the world’s poorest countries. If political stability could be achieved, the government could prioritize improvements in business freedom and the rule of law.

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Background

A former French colony, the Central African Republic became independent in 1960. In 1993, after more than 30 years of mostly incompetent and frequently brutal military regimes, a democracy was established. It ended in 2003 with a military coup led by François Bozizé, who was later elected president. In 2013, mostly Muslim Séléka rebels led by Michel Djotodia overthrew Bozizé. Subsequent sectarian violence precipitated French military intervention and the deployment of U.N. peacekeepers. Djotodia stepped down in 2014, and former Prime Minister Faustin-Archange Touadéra was elected president in 2016. Militia violence continues to fuel population displacement and hunger. The CAR has abundant timber, gold, and uranium, and previously banned exports of diamonds have resumed in some parts of the country.

Rule of LawView Methodology

Property Rights 38.1 Create a Graph using this measurement

Judicial Effectiveness 31.7 Create a Graph using this measurement

Government Integrity 24.3 Create a Graph using this measurement

Protection of property rights is weak. Businesses and homes are regularly looted or extorted by armed militants, who enter homes without judicial authorization, seize and damage property without due process, and evict persons from their places of residence both in Bangui and throughout the countryside. Courts are inefficient and politicized and do not enforce their rulings. Corruption and nepotism remain 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 6.9 percent of total domestic income. Government spending has amounted to 14.7 percent of the country’s output (GDP) over the past three years, and budget surpluses have averaged 0.4 percent of GDP. Public debt is equivalent to 48.5 percent of GDP.

Regulatory EfficiencyView Methodology

It has become slightly easier to start a business and enforce contracts, but burdensome and opaque regulations and the precarious security situation undermine business development. Private-sector economic growth that reaches more people is needed to create jobs and reduce poverty. Government distortions of the economy through subsidies and price controls are aggravated by political instability that undermines the basic functioning of state institutions.

Open MarketsView Methodology

The total value of exports and imports of goods and services equals 46.1 percent of GDP. The average applied tariff rate is 16.4 percent, and nontariff barriers further impede trade. Openness to foreign investment remains severely constrained by political instability. The high cost of credit and scarce access to financing deter private-sector development. A large part of the population remains outside of the formal banking sector.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius74.91.9
2Rwanda70.9-0.2
3Botswana69.60.1
4Seychelles64.32.9
5Cabo Verde63.60.5
6Tanzania61.71.5
7Namibia60.92.2
8Madagascar60.53.9
9Côte d'Ivoire 59.7-2.7
10Uganda59.5-0.2
11Ghana59.41.9
12South Africa58.80.5
13Senegal581.7
14Nigeria57.2-0.1
15Burkina Faso56.7-2.7
16Gabon56.70.4
17Guinea56.50.8
18The Gambia56.33.9
19São Tomé and Príncipe 56.22.2
20Mali55.9-2.2
21Mauritania55.3-0.4
22Eswatini55.30.6
23Kenya55.30.2
24Benin55.2-0.1
25Niger54.73.1
26Lesotho54.51.4
27Togo54.13.8
28Comoros53.7-1.7
29Cameroon53.61.2
30Ethiopia53.60.0
31Zambia53.5-0.1
32Guinea-Bissau53.3-0.7
33Djibouti52.95.8
34Malawi52.81.4
35Angola52.21.6
36Central African Republic50.71.6
37Mozambique 50.51.9
38Chad50.20.3
39Democratic Republic of Congo49.5-0.8
40Liberia49-0.7
41Burundi490.1
42Equatorial Guinea48.37.3
43Sierra Leone480.5
44Sudan45-2.7
45Zimbabwe43.12.7
46Republic of Congo 41.82.1
47Eritrea38.5-0.4
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