RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/183 
7 May 2007  
 
(07-1822) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
CENTRAL AFRICAN REPUBLIC 
 
  
 
This report, prepared for the first Trade Policy Review of Central African 
Republic, has been drawn up by the WTO Secretariat on its own responsibility.  
The Secretariat has, as required by th e Agreement establishing the Trade Policy 
Review Mechanism (Annex 3 of the Ma rrakesh Agreement Establishing the 
World Trade Organization), sought clarification from Central African Republic 
on its trade policies and practices. 
 
Any technical questions arising from this report may be addressed to Mr Jacques 
Degbelo (022 739 55 83). 
 
Document WT/TPR/G/183 contains the policy statement submitted by Central 
African Republic. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Revi ew Body on the Central African Republic. Central African Republic WT/TPR/S/183 
 Page iii 
 
 
CONTENTS 
 
 
  Page 
SUMMARY OBSERVATIONS vii 
(1) E CONOMIC ENVIRONMENT  vii 
(2) T RADE AND INVESTMENT REGIMES  viii 
(3) T RADE POLICY INSTRUMENTS  viii 
(4) S ECTORAL POLICIES  ix 
(5) T RADE POLICY AND TRADING PARTNERS  xi 
I. ECONOMIC  ENVIRONMENT 1 
(1) M AIN FEATURES OF THE ECONOMY  1 
(2) R ECENT ECONOMIC TRENDS  4 
(3) T RADE AND INVESTMENT PERFORMANCE  6 
(4) P ROSPECTS  9 
II. TRADE AND INVESTMENT REGIMES 10 
(1) O VERVIEW  10 
(2) P OLICY OBJECTIVES  12 
(3) T RADE AGREEMENTS AND ARRANGEMENTS  13 
(i) The WTO 13 (ii) Regional agreements 14 
(4) I
NVESTMENT  20 
ANNEX II.1:  TRADE-RELATED TECHNICAL ASSISTANCE 23 
(1) I MPLEMENTATION OF AGREEMENTS AND POLICY FORMULATION  23 
(2) S UPPLY -SIDE CONSTRAINTS  24 
(3) I NTEGRATION OF TRADE IN DEVELOPMENT STRATEGIES  25 
III. TRADE POLICIES AND PRACTICES BY MEASURE 26 
(1) I NTRODUCTION  26 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  26 
(i) Registration 26 
(ii) Customs procedures 27 (iii) Rules of origin 29 
(iv) Customs levies 29 
(v) Prohibitions, quantitative restrictions and licensing 35 (vi) Standardization, accreditation and certification 36 
(vii) Sanitary and phytosanitary (SPS) measures 36 
(viii) Rules on packaging, marking and labelling 37 (ix) Contingency measures 37 
(x) Other measures 37 WT/TPR/S/183 Trade Policy Review 
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   Page 
 
(3) MEASURES  DIRECTLY  AFFECTING  EXPORTS 37 
(i) Customs procedures 37 (ii) Export duties and taxes 38 
(iii) Prohibitions, quantitative restrictions, export controls and licences 39 
(iv) Export subsidies, promotion and assistance 39 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  39 
(i) Protection of intellectual property rights 39 
(ii) Competition policy 43 (iii) Incentives 44 
(iv) State trading, State-owned enterprises and privatization 44 
(v) Government procurement 45 
IV. TRADE POLICY AND PRACTICE BY SECTOR 47 
(1) I
NTRODUCTION  47 
(2) A GRICULTURE AND RELATED ACTIVITIES  47 
(i) Overview 47 
(ii) Agricultural policy 48 
(iii) Policy by subsector 50 
(iv) Fishing and aquaculture 55 
(v) Forestry 55 
(3) M INING , ENERGY AND WATER  57 
(i) Mining products 57 
(ii) Petroleum products and natural gas 58 (iii) Electricity 59 
(iv) Water 60 
(4) M
ANUFACTURING SECTOR  61 
(5) S ERVICES  62 
(i) Transport 62 
(ii) Tourism 64 (iii) Telecommunications and postal services 65 
(iv) Financial services 66 
 REFERENCES 69 
 
APPENDIX TABLES 73 Central African Republic WT/TPR/S/183 
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GRAPHS 
 
 
 Page 
 
I. ECONOMIC ENVIRONMENT 
I.1 Structure of merchandise trade, 1995-2005 3 
I.2 Direction of merchandise trade, 1995-2005 8 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Breakdown of MFN duties applied, 2006 31 
III.2 Escalation of MFN duties applied, 2006 33  
IV. TRADE POLICY AND PRACTICE BY SECTOR 
IV.1 River traffic, 1980-2006 63 
 
 
TABLES 
  
I. ECONOMIC ENVIRONMENT 
 
I.1 The Central African Republic in figures, 1998-2006 1 
I.2 Main economic indicators, 1998-2006 4 I.3 Balance of payments, 1997-2006 7 
 
II. TRADE AND INVESTMENT REGIMES  
II.1 Principal trade-related laws and regulations, March 2007 11 
II.2 Investment Charter:  Benefits ava ilable for newly created manufacturing 21 
 or processing enterprises 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 MFN applied tariff structure, 2006 30 III.2 Summary of MFN tariff applied, 2006 32 
III.3 Fines and terms of imprisonment under the Bangui Agreement (1977) 40 
and its revision (1999) 
III.4 Subjects and terms of protection under the Bangui Agreement (1977) 41 
and its revision (1999) 
III.5 Status of the Central African Republic regarding ratification of 43 
the intellectual property protection treaties administered by the WIPO, 2007 
III.6 Enterprises with State participation, March 2007 45 
 IV. TRADE POLICY AND PRACTICE BY SECTOR 
 
IV.1 Production of food crops, 1993-1994 and 1998-2006 48 IV.2 Exports of Robusta green coffee, 2000-2005 50 
IV.3 Production and export of timber, 2000-2005 56 
IV.4 Electricity rates, March 2007 60 
IV.5 Basic telecommunications indicators, 2002-2006 66  WT/TPR/S/183 Trade Policy Review 
Page vi 
 
 
APPENDIX TABLES 
 
 
  Page 
 
I. ECONOMIC ENVIRONMENT 
AI.1 Structure of exports, 1995-2005 75 
AI.2 Structure of imports, 1995-2005 77 AI.3 Destination of exports, 1995-2005 79 
AI.4 Origin of imports, 1995-2005 80 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
AIII.1 Tariffs by HS chapter, 2006 81 
 IV. TRADE POLICY AND PRACTICE BY SECTOR 
AIV.1 Applied MFN tariffs by ISIC Rev.2 category, 2006 84 
 
  Central African Republic WT/TPR/S/183 
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SUMMARY OBSERVATIONS 
(1) ECONOMIC ENVIRONMENT  
1. Several years after the military- 
political crisis that undermined the 
foundations of its economy as from 1996, the 
Central African Republic, a vast and sparsely populated land-locked country in the heart of Africa, has returned to economic growth (3.7 per cent in 2006 as compared to a yearly 
average of 0.6 per cent from 1998 to 2005).  
This economic recovery, helped along by a return to constitutional order in 2004 and the holding of elections in 2005, should continue in 2007 and 2008 with the macroeconomic stabilization programme and structural 
reforms.  During 2007, the Central African 
Republic intends to finalize its Poverty Reduction Strategy Paper (PRSP), and hopes to gain access to the enhanced Heavily Indebted Poor Countries (HIPC) initiative as a 
means of reducing its external debt burden. 
2. On the demand side, consumption is 
currently sustained by more regular payment of wages and salaries to civil servants, who absorb all of fiscal revenue (excluding grants) – hence the recurring budget deficit.  Private 
investment, which had dried up during the 
crisis, is recovering in leading sectors such as mobile telecommunications, mining and forestry.  Public investment being extremely limited, a number of development partners are 
financing, to a certain extent, the upgrading of 
the country's roads and other infrastructure.  In 2006, grants accounted for about one third of overall budgetary receipts.  Thanks to the restrictive monetary policy of the Bank of 
Central African States (the central bank of the 
Central African Monetary Union, of which the Central African Republic is a member) it has been possible, overall, to contain inflation.  However, it will take some time for the country to extricate itself from its disastrous economic 
and financial situation and fight against the 
alarming poverty in which its population lives.  In 2005, per capita income stood at US$338, and according to the UNDP, the Central 
African Republic ranked 172
nd (out of 
177 countries) in the human development index. 
3. The Central African Republic's 
economy is based essentially on subsistence farming (including livestock breeding, hunting, fishing, and forestry), which provides employment for about 75 per cent of the 
population and produces about 50 per cent of 
GDP.  The mining and quarrying sector  and the manufacturing sector account for only 7 per cent and 2 per cent of the GDP respectively. Services, including trade, transport and communications, account for 
approximately 32 per cent GDP.  Among the 
supply-side constraints are the poor state of transport infrastructure, the non-availability of inputs such as electricity, and a financial system that mainly focuses on short-term 
credits, not to mention the higher costs 
connected with the country's land-locked situation. 
4. According to official statistics (which 
are far from complete), the ratio of merchandise trade to GDP remained at 20 per 
cent in 2005.  Raw diamonds and wood are the 
leading export products.  Imports are more diversified, consisting mainly of petroleum products, foodstuffs and medicines, and materials and equipment.  The European 
Union is the Central African Republic's main 
trading partner. Leaving aside the considerable transit tra ffic through Cameroon, 
the African countries would appear to account for only a small share of the country's trade.  
While there has been a surge in world prices 
of petroleum products (entirely imported) over the past few years, the trend for diamonds and wood has been less favourable.  This deterioration in the terms of trade and the disruptions in export volumes during the crisis 
go a long way to explain why the traditional 
trade balance surplus became a deficit starting in 2004.  The Central African Republic is a net importer of services. 
 WT/TPR/S/183 Trade Policy Review 
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(2) TRADE AND INVESTMENT REGIMES  
5. The Ministry in charge of trade is 
responsible for defining domestic and foreign trade policy.  For the purposes of the trade 
negotiations, it is assisted by an 
interministerial structure.  The Ministry in charge of industry is responsible for industrial investment policy, while investment policy in the forestry and mining subsectors is defined 
by the ministries responsible for those areas.  
The Ministry in charge of finance handles customs and government procurement matters.  The private sector would like to be more closely associated in defining trade and investment policy. 
6. The Central African Republic 
inherited the status of GATT contracting party on 3 May 1963, and has been a member of the WTO since 31 May 1995.  It is recognized as a least developed country (LDC).  It is not a 
party to the plurilateral agreements concluded 
under WTO auspices, nor to the agreements concluded since the end of the Uruguay Round, i.e. the Agreement on Information Technology and the protocols on telecommunications and financial services.  It 
grants most favoured nation (MFN) treatment 
to all of its trading partners.  It does not maintain a mission in Geneva, a fact which hinders its participation in the WTO's regular activities.  It does, however, participate in the 
WTO ministerial conferences, and generally 
supports the positions adopted by the developing countries and the African Group. 
7. The Central African Republic has a 
long history of regional integration with its 
neighbours in central Africa.  It is a member of 
the Central African Economic and Monetary Community (CEMAC), whose common currency is pegged to the euro and whose common external tariff (CET) was established in 1993.  In view of the cash flow problems it 
is experiencing, the Central African Republic 
has obtained a waiver on application of the CEMAC generalized preferential tariff (GPT).  Consequently, it grants no tariff preferences to 
any country.  The EU is currently negotiating 
with CEMAC and associated countries (Sao Tomé and Principe, and the Democratic 
Republic of the Congo) the economic partnership agreement (EPA), scheduled to come into force in January 2008.  The Central 
African Republic also belongs to two larger 
economic areas:  the Community of Sahelan-Saharan States (CEN-SAD), and the Economic Community of Central African States (ECCAS);  however, their respective tariff 
reduction projects (for the purposes of 
creating free trade zones) have not yet been launched. 
8. The new Investment Charter of the 
Central African Republic entered into force in 2001.  Its main objective is the promotion of 
activities, in particular manufacturing 
activities.  The authorizations granted to enterprises under this Charter provide for tax and customs exemptions, which are also available to enterprises operating under 
sectoral codes (forestry and mining), or which 
have concluded establishment agreements or bilateral agreements. For tax control purposes, all tax and customs exemptions granted before 1 January 2007 were suspended. 
9. Within the framework of its PRSP, the 
Central African Republic intends to rationalize its trade policies (domestic and foreign) and its investments.  To that end, it is relying on this trade policy review report and on the 
Diagnostic Trade Integration Study (DTIS) 
under the Integrated Framework.  It also hopes to obtain further technical assistance in the areas of capacity building to enhance understanding of the WTO agreements;  
notifications;  trade policy formulation and 
integration thereof in its development strategy;  dismantling of supply-side constraints;  and participation in trade negotiations, inter alia, in the context of the Doha Development Agenda. 
(3) T
RADE POLICY INSTRUMENTS  
10. The Central African Republic applies 
the CEMAC's Customs Code.  Apart from a few exceptions, its customs tariff is based on the CEMAC's CET.  The simple average of its Central African Republic WT/TPR/S/183 
 Page ix 
 
 
applied MFN tariff is 18.2 per cent, with 
considerably higher tariff protection (22.7 per cent) for agricultural products (WTO definition).  Overall, the tariff shows mixed 
escalation owing to the relatively high degree 
of protection afforded to unprocessed agricultural products. 
11. During the Uruguay Round, the 
Central African Republic bound 62.3 of its 
tariff lines.  However, the applied rate for 
bicycles exceeds the bound  rate.  The "other 
import duties and taxes" have been bound at zero or 16 per cent, depending on the category of product.  This  poses a problem of 
consistency with regard to products subject to 
the CEMAC Community Integration Tax (TCI) 
of 1 per cent, the ECCAS Community Integration Contribution (CCI) of 0.4 per cent, the OHADA levy of 0.05 per cent, and the levy on computer equipment for finance (REIF) of 
0.5 per cent. 
12. Domestic taxes, such as value added 
tax (VAT) and excise duties on certain products, are levied on imports and local products.  However, unlike imports, locally-produced non-alcoholic beverages are 
exempted from the excise duty of 10 per cent.  
Moreover, unlike local goods, in keeping with CEMAC regulations the taxable base for VAT on imports also includes the excise duty.  Imports whose value is at least CFAF 500,000 
are generally subject to pre-shipment 
inspection by the company BIVAC, the cost of which is charged to the importer (1 per cent of the f.o.b. value).  The Central African Republic is encountering difficulties in implementing the 
WTO Agreement on Customs Valuation.  It has 
never resorted to any contingency measures. 
13. Approximately 80 per cent of the 
goods going to the Central African Republic transit through the port of Douala in Cameroon and are transported the 1,500 km 
between Douala and Bangui.  In view of the 
importance of customs revenue (approximately 65 per cent of total fiscal revenue excluding grants in 2006), this traffic is strictly controlled. Meanwhile, a number of malfunctions in the customs administration led 
to its reorganization in 2007. 
14. Sugar imports are subject to licensing, 
with a 90 per cent share reserved exclusively 
for the national producer (SUCAF-RCA) until 
2008.  Coffee imports are allowed only once all the domestic output has been sold.  The Central African Republic observes the provisions of international treaties on 
environment protection as well as 
international standards with respect to sanitary and phytosanitary measures. 
15. The privatization programme, 
introduced in 1996, has resulted among other things in the opening up to competition of 
activities downstream of the hydrocarbons 
sector.  Prices at the pump are administered, and taxes on the products concerned were reduced in 2006 in order to limit the impact of the increase in world prices on Central 
African consumers.  Intellectual property is 
protected, inter alia by the revised Bangui Agreement.  Domestic legislation on copyright and neighbouring rights is obsolete, and needs to be brought up to date.  The same applies to competition legislation.  The Central African 
Republic has no regulatory framework for 
standardization, essential to improving the quality of its products.  The government procurement regime is currently being revised. 
(4) S
ECTORAL POLICIES  
16. The Central African Republic has 
considerable potential in the agricultural sector.  Priority has been given to reviving coffee and cotton subsectors, once the most important cash crops in the country.  In the 
medium term, the Government intends to focus 
on reviving food crops and livestock breeding.  While awaiting the arrival of a new strategic partner, the State is managing the cotton subsector and fixes minimum purchase prices for cotton growers.  However, the insecurity 
that still prevails in certain parts of the 
interior remains a threat to economic recovery in the rural areas, and without that recovery, it will be difficult to make any true progress WT/TPR/S/183 Trade Policy Review 
Page x 
 
 
towards poverty reduction.  Average tariff 
protection in the agricultural sector (ISIC (Rev.2) definition) is 23.2 per cent, well above the overall average of 18.2 per cent. 
17. The forestry subsector has 
traditionally attracted foreign investors.  Through export duties and various forestry royalties, it accounted for approximately one quarter of fiscal revenue (excluding grants) in 
2006.  A large portion of the forests of the 
south-west are under concession, and the authorities intend to extend the areas with forest management plans that meet sustainable management criteria beyond the 6.5 per cent level of 2005 in accordance with the 
International Tropical Timber Organization 
(ITTO).  Under the Forestry Code of 1990, companies are obliged to process 60 per cent of the logs felled on the spot, but in practice only 48 per cent of the total volume was 
processed in 2005.  The new draft Forestry 
Code (not yet enacted) would prohibit the exportation of logs.  The profitability of the wood sector is considerably reduced by high road transport costs to Douala, in Cameroon.  Forestry and logging together enjoy an 
average tariff protection of 25.1 per cent, as 
opposed to 36 per cent for logging alone. 
18. The mining sector is fast expanding 
following the adoption of a new mining code in 2004.  The official trade in raw diamonds 
appears to operate according to the Kimberley 
Process requirements.  Raw diamonds are subject to various taxes levied on export (approximately 9 per cent in 2006), and on import (approximately 93 per cent).  These 
taxes do not encourage the local processing of 
diamonds, which are cut exclusively abroad.  The industrial exploitation of gold will begin in the near future.  A specific regime for uranium was introduced in 2006 in order to facilitate exploitation of the Bakouma deposit. 
19. High protection in the agricultural 
sector is not conducive to the development of the agri-food industries, since it pushes up production costs.  In addition to the tariff structure, the high prices and shortages ofbasic inputs stand in the way of the 
development of the manufacturing sector, which is still confined to producing basic products for the local market.  Owing to their 
limited production capacity, none of the 
Central African enterprises appears to be taking advantage of the preferential access to neighbouring markets which is available for their products under the CEMAC's GPT.  
Average tariff protection of manufactured 
products is 18 per cent. 
20. The absence or poor condition of 
basic infrastructure (including transport, fixed telephony, hotels) and above all the irregular electricity supply, even in the capital, Bangui, 
coupled with the high cost of related services, 
are among the major challenges to the country's development, including the development of trade and tourism (for which there is immense potential).  The river 
network, once the main access route to the 
Atlantic Ocean from the Central African Republic, is now only navigable during the rainy season.  Consequently, goods are transported mainly by road, which is more costly but more rapid.  Development partners 
are financing the restoration of the river 
transport network and the asphalting of the main roads.  Tourism is the main services category in which the Central African Republic has made commitments under the 
GATS. 
21. Teledensity has progressed 
considerably since the introduction of mobile telephony in the Central African Republic in 1996, but basic fixed telecommunication 
services remain unsatisfactory.  The 
privatization of the traditional operator, the Société centrafricaine des télécommunications – SOCATEL (Central African Telecommunications Company), which currently has a monopoly of basic services, is 
under consideration. Banking and 
microfinance services are subject to the common banking regulations of the CEMAC.  Banking institutions are chiefly involved in Treasury operations and loans to support 
import-export transactions;  their involvement Central African Republic WT/TPR/S/183 
 Page xi 
 
 
in the financing of production activities is 
minimal.  Microfinancing helps to meet the financing needs of craftsmen, farmers and small businessmen.  With the exception of 
compulsory insurance for automobiles and 
construction sites, insurance services are not very developed. 
(5) T
RADE POLICY AND TRADING 
PARTNERS  
22. The resumption of support from the 
international community should help to reinforce the incipient positive impact of the country's reconstruction efforts.  For this to happen, order will have to be restored in the regions where insecurity  still prevails and the 
different reforms (including structural 
reforms) aimed at reducing the numerous supply-side constraints will have to be pursued.  The country's land-locked situation is in itself a natural barrier to trade and tends 
to push up costs.  However, trade facilitation 
measures, including the streamlining of institutional structures and the various taxation systems (import and export) which add to the costs of the goods traded, could help to contain its effects. 
23. Continuation of the different reforms 
should facilitate the country's access to the Heavily Indebted Poor Countries Initiative and provide debt relief which, in the long term, could securitize resources to support the ongoing financing by foreign donors of the 
rehabilitation of infrastructure and to implement other components of the poverty reduction strategy, for which the paper is 
currently being finalized.  This report for the 
Central African Republic's first Trade Policy Review highlights certain areas in which trade policy could play a role in that strategy.  With that in mind, the Central African Republic 
would do well to improve the implementation 
of its commitments under the WTO Agreements, and to strengthen its commitments in the area of trade in goods and services. 
24. These efforts should help the Central 
African Republic to adhere more closely to the 
principles of the WTO, to create a more business-friendly environment, and to make its trade regime more transparent, more credible and more predictable.  This, in its turn, would 
help to attract the capital needed to exploit the 
country's enormous potential, to profit more fully from its participation in the multilateral trading system, and to better exploit the trade preferences it has been granted.  The international community could do more to help 
the Central African Republic in its economic 
reconstruction efforts by opening up its markets, on a stable basis, to products and services of interest to the country, and by responding favourably to its requests for 
technical assistance, particularly in the area 
of capacity-building.