Building capacity to help Africa trade better

Chad

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Chad

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Chad

Key Facts

  • Capital: N Djamena
  • Region: Central Africa
  • Language: Arabic and French
  • Independence Day: August 11, 1960
  • Area: 1,284,000 sq km
  • Population (2018): 15.5 million
  • REC membership: CEN-SAD, ECCAS
  • WTO membership: October 19, 1996
  • GDP (2018): US$ 11.27 billion
  • GNI per capita (2018): US$ 670
  • Currency: CFA franc

Economic overview

After two years of recession (2016 and 2017) following the fall in the price of oil, which led to a debt crisis, real GDP growth turned positive, reaching 2.4% in 2018 and 2019, driven by the good performance of grain (up 1.2% in 2019), cotton (142%), and oil production (14%, or 146,000 barrels a day).

Inflation averaged 3.0% in 2019, within the CEMAC criterion of 3%. Fiscal consolidation in the framework of an IMF program, including debt rescheduling in 2018 with the Glencore corporation, contributed to the sustainability of public spending.

The fiscal balance turned positive in 2018 (1.9% of GDP) and 2019 (0.2%), but domestic arrears remain high (10% of GDP in 2018), a big obstacle to the resumption of economic activity. Financing the public deficit with bank loans weakened the viability of the country’s banks and had a crowding-out effect that reduced financing to the private sector. The current account deficit was 6.7% of GDP in 2019, up from 3.4% in 2018. With a poverty rate of 46.7%, Chad ranks 186 of 188 countries on the Human Development Index. The unemployment rate is 5.8%, with youth unemployment very high, rising from 42% in 2015 to 60% in 2017 due to the economic recession.

Prospects are good, with 5.5% GDP growth projected for 2020 and 4.9% for 2021. As a member of CEMAC, Chad is a stakeholder in the regional strategy launched in 2017 to correct the fiscal and external imbalances of all countries in the region.

With significant potential for arable land and livestock, agriculture accounts for nearly 35% of GDP and employs 75–80% of the population. In August 2018, the government adopted a bill for a framework law on agriculture to support value chain development. It brought in foreign investors, specifically the Olam Group, to revitalize the cotton sector and implement initiatives to promote exports of livestock and meat. Chad is contributing to regional infrastructure (roads, electricity interconnection, preservation of the Lake Chad Basin, internet backbone, and the Trans-Sahara Highway linking Algeria to Nigeria).

The following factors pose risks to the outlook:

  • Dependence on oil (79% of export revenues and 37% of budget receipts in 2019) and an unattractive business environment.

  • Endemic poverty, high youth unemployment (60% of college graduates without work), and demographic pressure (3.5% population growth and a fertility rate of 6.4 children per woman).

  • High exposure to the effects of climate change.

  • Political instability and security concerns.

Last updated: April 2020

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