China recently decided to invest $15 billion CFA francs in the Central African Republic to
develop the cotton sector from the crop to the ginning and textiles industries. We analyze the
economic impacts of such investment on the Central African Republic by accounting for euro
versus dollar depreciation (the CFA franc is pegged to the euro). We build a 2012 social
accounting matrix, considering the restoration of textile sector. We develop a computable
general equilibrium model called CARCHINA based on the PEP 1.1 model. We note an increase
in sectoral production, an improvement in household living standards and higher real GDP. Euro
depreciation amplifies those effects.
