Previous Quarterly Editions
Expropriation Risk: 69 70 70 74 ▲Political Violence Risk:68 68 68 68 ►Terrorism Risk:35 35 35 35 ►Exchange Transfer and Trade Sanction Risk: 64 64 64 73 ▲Sovereign Default Risk:83 75 75 83 ▲
TREND ▲
Geopolitical alignmentEast 1 2 3 4 5 West
Alignment five years agoEast 1 2 3 4 5 West
Degree of contestationSettled 1 2 3 Contested
The CAR is one of the sub-Saharan countries where the influence of Russia is most assertively exercised, despite significant popular resentment and veiled criticism from political opponents of President Faustin-Archange Touadera. His decision to develop a partnership with Moscow was rooted in security needs, with the CAR’s small army facing pressure from continued rebel activity. France, the country’s traditional defence partner, and other Western governments were cautious about approving arms deliveries to the CAR, because of the army’s fragility and the risk of a return to the sectarian conflict seen in 2013, and thus supported a continuing UN arms embargo.
Touadera therefore turned to Russia, holding talks with its foreign minister, Sergei Lavrov, in October 2017. Two months later, the Russians had secured an exemption from the embargo and the right to supply small arms and ammunition to the CAR. In early 2018, the shipment was delivered along with five official military and 170 civilian instructors to train the CAR forces. It gradually emerged that hundreds of mercenaries from the Russian security contractor Wagner – which is close to the Kremlin – were being deployed in the CAR. Russians were added to the presidential guard and a Russian assigned as security adviser to Touadera.
When the rebel Coalition of Patriots for Change (CPC) launched an offensive, pushing from the north-west down towards Bangui in December 2020, the Wagner men and regular units of the Rwandan army – which had also deployed to the CAR -- joined CAR troops in defending the capital, playing a vital role in this ultimately successful campaign which gradually shifted into an offensive drive to recover territory from the now-retreating CPC.
But increasingly questions began to be asked about the Wagner mercenaries’ behaviour and real priorities. The UN Group of Experts on the CAR accused them of committing serious human rights abuses and as the CPC threat faded, much of the Wagner effort shifted into extending their influence over the diamond and gold mining areas of the east and north. Russia had never hidden the fact that minerals exploitation was on the agenda of the original talks between Touadera and Lavrov and it gradually became clear these interests had become a key priority for Wagner whose men have, during 2022, been accused of killing civilian villagers in the mining belt.
Western governments and the United Nations are worried about Wagner’s expanded role and the Russian influence exerted over Touadera and apparent control over the flow of information reaching the president. The impacts are various. The CAR abstaining from the UN votes condemning the escalation of conflict in Ukraine is of little real surprise, there is more concern about Wagner’s influence over the attitudes and priorities of both Touadera’s inner circle and the CAR’s national military.
This has led the European Union to halt its programme of retraining the CAR army. At times, government-linked interests have obstructed the operations of the UN peacekeeping force for the CAR, MINUSCA. Seeking to restore a partnership of trust between MINUSCA and the CAR leadership, the United Nations has installed a Rwandan as head of the peacekeeping mission.China’s role in the CAR has been altogether less contentious, confined mainly to routine development support, providing medical supplies and debt cancellation.
Overall, despite the ham-fisted management of relations with traditional partners, Touadera does not seem to have any ideological alignment with Russia or desire to break with Western nations or the United Nations. The CAR’s geopolitical alignment will therefore likely remain much as now, while Touadera – only 19 months into his current five-year term at the time of writing – remains in office and reliant on Russia and Wagner. This could change given domestic political pressure, or if Wagner cannot deliver, which could see MINUSCA regain influence. Rwandans could also prove more effective than Wagner in time, and Rwanda works well with the West and United Nations.
In the CAR, the risk of expropriation should be low. Given the country’s small domestic market, landlocked location, and persistent insecurity, the CAR faces a huge challenge to attract significant volumes of foreign direct investment into economic sectors other than mining, for instance agriculture.
However, the erosion of trusting relationships with Western governments, particularly with France, and the government’s increasing reliance on the partnership with Russia alters this risk calculation. Interests in key resource sectors, particularly mining, could be less secure and the risk cannot be excluded that some investors might find themselves under pressure to sell attractive assets on sub-market terms to alternative partners preferred by the current administration.
The degree to which the CAR has partially stepped out of the habitual frameworks for dealing with international partners is illustrated by the government’s launch of a cryptocurrency against the clear wishes of the regional central bank, the Central African Economic and Monetary Community (CEMAC).
TREND ►
Sporadic CPC rebel activity continues, and other armed elements are also active. Recent history suggests a resurgence in rebel attacks cannot be ruled out, even if security conditions are less difficult than in 2021. Moreover, there is also a risk of clashes between security forces and civil urban protesters, as the government explores options for changing the constitution to allow Touadera to seek a third term.
The Constitutional Court appears to have blocked this option for now, but it seems likely the presidential inner circle will continue to look for ways to bring in this change. After the Court decision, a citizens’ movement that appears to be a vehicle for Touadera support launched a petition to demand a referendum on constitutional change. If such a vote is organised, this could trigger mass protests by those opposed to such a change.
So far, the CAR has not seen any significant terrorist activity or infiltration. Boko Haram and Islamic State jihadists have sometimes attacked areas in neighbouring Chad, but the affected zone is near Lake Chad and far from the border with the CAR. Nonetheless, the possibility of eventual terrorist infiltration cannot be ruled out, particularly given the fragility of the CAR’s security structures and the huge areas of terrain where the state is barely present.
As a member of the six-country CEMAC, the CAR has a currency pegged to the euro at a rate guaranteed by France. Despite talk of various reforms to the monetary system, the most crucial feature of the system – the fixed peg – is set to remain.
The International Monetary Fund has warned the CEMAC countries the fixed rate would remain unsustainable unless they implemented serious economic reforms. The governments have decided to opt for economic reforms rather than contemplate a devaluation that would have caused major political unrest among urban populations that consume significant volumes of imports. While in reality, the pace of reform has been slower than in the other CFA franc zone in West Africa, there is no sign of the CEMAC governments changing their fundamental strategic commitment to maintaining the present system.
The pressure on the balance of payments of most member states that export oil has been slightly eased by high energy prices or at least has allowed them to offset the increased cost of grain imports. However, the CAR is the one member of the bloc that does not export oil. Consequently, it has felt the full cost of the rise in global commodity prices, for both cereals and the fuel that it must import. The CAR will probably need more foreign aid to cope with these pressures which might nudge it into trying to restore better relations with the West. Russia may provide grain, but is unlikely to offer financial assistance.
Despite the CAR’s patchy human rights record and reliance on Wagner mercenaries, the fact Touadera is democratically elected should shield it from any risk of sanctions.
The CAR remains economically fragile but its prolonged reliance on foreign aid means it has never really had the chance to accumulate a large mountain of foreign debt and it has not been able to borrow against oil, in contrast to the neighbouring Republic of the Congo. A major debt default seems unlikely, but in the current testing global economic conditions it appears possible the CAR might need to seek further write-offs of official debt from time to time. The full financial aspects of its relationship with Russia remain opaque, but Wagner or Russian interests more generally are substantially rewarded through having been granted the operating concession for the Ndassima gold mine.
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