Analysis of Black Market in Central African Republic’s Mining Sector: A Multiple-Regression Analysis

Abstract

In this work, we emphasize on the analysis of the effect of the black market in the Mining sector in the Central African Republic’s economy (GDP), using the relationship between mining quantity exported and the price divided into legal and illegal price. The data collected were analyzed and tested using Ordinary Least Square (OLS). The result of this work shown that legal price coefficient indicated for each increase of 1 percent in the legal Price, holding illegal price constant, the expected change in Product is predicted to be about 52%, this mean change in the legal price has a positive effecton the official production and statistically significant (t-value is 2.745165).However, change in illegal price has a negative effect on production (about 53% with t-value equal to 2.792635 of statistical significance). Regarding this work, in order to make mining sector more efficient, the Central African Republic’s government should try to develop other sectors such as agriculture and manufacture for diversifying sources of state revenue purpose. It should also increase the export earnings of the country throughout income from mining by strengthening the country's integration into the global economy but also by ensuring the socio-economic development of mining workers.