World Bank Report Urges Sustainable Forest Management in Central African Republic

The World Bank report forecasts that inflation will ease to 1.5% in 2024 but will rise toward 3% in the following years, reflecting ongoing macroeconomic challenges.

The Central African Republic (CAR) is facing continued economic stagnation, with a projected GDP growth of only 0.7% in 2024, according to the World Bank’s 7th Edition of the Central African Republic Economic Update, released today. Growth is expected to gradually improve to around 1.6% between 2025 and 2026. However, this outlook remains constrained by persistent energy shortages and the ongoing security challenges facing the country.

Key Challenges: Fuel Shortages and Power Outages

The stagnation in CAR’s economy is primarily attributed to repeated fuel shortages since 2022, compounded by severe power outages, particularly in the capital city of Bangui, throughout the first half of 2024. These energy disruptions have significantly impacted economic productivity and hindered efforts to stimulate growth.

High Inflation and Persistent Poverty

The World Bank report forecasts that inflation will ease to 1.5% in 2024 but will rise toward 3% in the following years, reflecting ongoing macroeconomic challenges. Poverty remains alarmingly high, with approximately 65.7% of the population living below the international poverty line of $2.15 per day. The CAR continues to rank among the lowest in human capital and development indicators.

Security Issues Dampening Economic Stability

Despite slight improvements in the security situation, sporadic violence and tension continue to undermine stability and limit the potential for short-term economic recovery. The report emphasizes that without a sustained improvement in security, the country’s economic growth will remain constrained.

Opportunities in Forestry: A Path for Economic Growth

One of the most promising opportunities identified by the report is the potential of the country’s forests, which provide vital livelihoods for indigenous communities and play a significant role in global environmental services. However, the Central African forests face serious threats from human activities within the Congo Basin, including deforestation and illegal logging.

“The Central African Republic has a unique opportunity to improve forest governance and build a robust wood processing industry, which could contribute significantly to both forest conservation and economic development,” said Guido Rurangwa, World Bank Country Manager for the CAR.

Strategies for Sustainable Forest Management

To ensure the sustainable management of its forests, the report suggests a combination of fiscal instruments such as environmental taxes, tradable permits, and biodiversity offsets. These could help promote forest conservation while strengthening the role of the forestry sector in the national economy.

The World Bank recommends enhancing forest governance through stronger law enforcement, improved surveillance, and increased transparency. Regional cooperation within the Congo Basin is also crucial, with the report urging harmonized regulations and more robust fiscal policies on forestry across the region.

International Support and Compensation

The report stresses the need for greater international support to the Central African Republic and other countries in the Congo Basin for their efforts in forest conservation. Recognizing the global public good that forests provide in regulating the climate and protecting biodiversity, the World Bank calls for enhanced compensation for these countries’ efforts, particularly through increased international financing.

While CAR faces significant challenges in terms of energy shortages, security issues, and poverty, the report highlights that sustainable forest management could be a key driver of economic growth and development. By improving governance and investing in the forestry sector, the Central African Republic could both preserve its vital natural resources and foster a more resilient, low-carbon economy.