Foreign Direct Investment

FDI flows to the Central African Republic (CAR) have resumed since the 2013 civil war, which had caused almost all economic activity to stop and led investors to withdraw from the country, but they remain limited. According to UNCTAD’s World Investment Report 2023, FDI inflows increased to USD 24 million in 2022, up from USD 5 million one year earlier and almost at the same pre-pandemic level recorded in 2019. At the end of the same period, the FDI stock was estimated at USD 715 million, around 29% of the country’s GDP. The wood and diamond sectors attract most of the FDI, and France as well as China are the two main investors in the country.

The Plateau region abounds with untapped potential, encompassing various aspects: its fertile agricultural land, of which only a fraction is utilized, alongside minimal exploitation per agricultural worker; its diverse agro-ecological zones conducive to the cultivation of a wide array of crops and livestock; its hydrography offering opportunities for hydroelectricity, fishing, and irrigation; ample mineral resources such as gold, diamonds, iron, and limestone; and a vibrant fauna appealing to tourists. Coupled with the vitality of the local communities, this potential sets a promising stage for development in the region (UNDP). However, the unfavorable security climate and political instability are a source of concern for investors, in this country where the majority of underground wealth is controlled by armed gangs. Other factors limiting its attractiveness include insufficient infrastructure and a shortage of skilled labor. The country has, however, undertaken various reforms to attract investment, in addition to the ongoing efforts under the peace agreements. Among these reforms are the establishment of a public-private dialogue framework, tax incentives for businesses, the reduction of the minimum capital required to start a business, and measures to protect minority investors. The Central African Republic ranks 149th among the 180 economies on the 2023 Corruption Perception Index and 168th out of 184 countries on the latest Index of Economic Freedom.