2016 Index of Economic Freedom

Central African Republic

overall score45.2
world rank168
Rule of Law

Property Rights10.0

Freedom From Corruption24.0

Limited Government

Government Spending93.6

Fiscal Freedom65.7

Regulatory Efficiency

Business Freedom28.0

Labor Freedom40.9

Monetary Freedom62.9

Open Markets

Trade Freedom52.2

Investment Freedom45.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 4.7 million
  • GDP (PPP):
    • $2.9 billion
    • 1.0% growth
    • -4.9% 5-year compound annual growth
    • $607 per capita
  • Unemployment:
    • 7.4%
  • Inflation (CPI):
    • 15.0%
  • FDI Inflow:
    • $3.5 million
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Political violence has shattered the Central African Republic’s already fragile economy. The CAR performs poorly in many areas of economic freedom and lags behind many other developing countries in terms of economic and human development. Government effectiveness remains low, and the management of public finance has deteriorated.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 45.2 (down 0.7 point)
  • Economic Freedom Status: Repressed
  • Global Ranking: 168th
  • Regional Ranking: 42nd in Sub-Saharan Africa
  • Notable Successes: Monetary Freedom
  • Concerns: Rule of Law, Regulatory Efficiency, and Open Markets
  • Overall Score Change Since 2012: –5.1

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Background

In 2013, Muslim Seleka rebels led by Michel Djotodia ousted President François Bozizé. Responding to widespread atrocities by the Seleka militia and the Christian “anti-balaka” militia that formed to fight them, France sent forces to its former colony in December 2013, and the U.N. deployed a peacekeeping force in September 2014. Djotodia stepped down early in 2014 and was replaced by interim President Catherine Samba-Panza. A cease-fire was signed in April 2015, but the violence, which has resulted in more than 6,000 deaths and more than 800,000 displaced persons, continues. The CAR is one of the world’s least-developed countries. More than half of the population lives in rural areas and depends on subsistence agriculture. The country has abundant timber, diamonds, gold, uranium, and prospects for oil exploration.

Rule of LawView Methodology

Property Rights 10.0 Create a Graph using this measurement

Freedom From Corruption 24.0 Create a Graph using this measurement

The 2013 coup removed all elected officeholders and imposed a non-transparent, unelected regime. The security situation prevents the current government from providing basic protection and services. Corruption remains pervasive. Armed groups are involved in illicit trade and exploitation of natural resources, especially gold and diamonds that account for more than half of export earnings. Protection of property rights is weak.

Limited GovernmentView 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 5.2 percent of total domestic income. Government spending amounts to 14.7 percent of total domestic output. The government budget has been in deficit in recent years, and public debt stands at around 42 percent of GDP.

Regulatory EfficiencyView Methodology

Private enterprises face costly regulatory hurdles. Minimum capital requirements to launch a company exceed four times the average level of annual income. The formal labor market is not fully developed. Government distortions of the economy through subsidies and wage/price controls are aggravated by persistent political volatility that undermines the basic functioning of state institutions.

Open MarketsView Methodology

The Central African Republic’s average tariff rate is a relatively high 16.4 percent. Many products face export taxes. State-owned enterprises operate in the water, energy, and telecommunications sectors. The financial system is underdeveloped, and access to financing for businesses remains very limited. Loans to the private sector equal less than 10 percent of GDP.

Country's Score Over Time

Bar Graph of Central African Republic Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Central African Republic to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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