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Chad Economical Facts

 

Economical overview

Several decades of civil war have prevented Chad from developing economically. However, the deepest causes of poverty are ancient: geographical isolation and a desert climate with recurring drought. The civil wars and the refugee streams have made the situation worse. In the 1990s, large oil deposits were discovered in the Doba region in the south. During the first years of the 2000s, the oil provided Chad with new income after a long-term dependence on cotton cultivation and livestock management.

Much of all economic activity in Chad takes place outside the official economy through agriculture for self-catering, street trading and smuggling to neighboring countries.

  • Countryaah.com: Major imports by Chad, covering a full list of top products imported by the country and trade value for each product category.

Since Idriss Déby took power in 1990, the state's budget deficit increased and the external debt grew. The International Monetary Fund (IMF) called for cuts in the public sector in exchange for loans. In 1994, the CFA franc (currency in 14 Central and West African countries) was devalued, leading to increased exports, government revenues growing and growth accelerating. High prices of cotton were also favored. Privatization of state-owned companies also generated revenue, although sales in sectors such as cotton, energy and telecommunications were delayed.

Between 1990 and 2001, Chad's gross domestic product (GDP) grew an average of just over 3 percent per year. Increased oil recovery led to GDP growth of just over 8 per cent in 2002, close to 15 percent in 2003 and a full 33 percent in 2004 before it slowed down and stopped at 0.2 percent in 2006. That year oil production fell, but in return agriculture went ahead. After several weak years, growth accelerated again in 2010 by just over 4 percent. However, almost all growth occurred in sectors other than oil.

  • Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including TCD which represents the country of Chad.

Economical Facts of Chad

Although foreign oil companies make the most of their profits - Chad gets only 12.5 percent - oil is still the country's most important export product, followed by livestock and cotton. In 2010, oil accounted for about 90 percent of export earnings. Thanks to the oil, Chad now has a surplus in commodity trade abroad, but in the current account (trade in both goods and services) there is still a deficit due to the high transport costs that exports entail.

The deficits are covered by loans and assistance from abroad. France is the largest donor, but even Libya, Germany, the US and the EU have donated significant sums. During certain periods, the economy has only been started with external assistance.

The World Bank was involved in the development of the Chadian oil industry and, in conjunction with it, set rules for how Chad should use its oil revenues: 80 percent of the proceeds would go to education, health care, rural development, infrastructure and water supply and 10 percent to a fund. intended for future generations. 5 percent of the oil money would be invested in development projects in the Doba region where the oil is extracted.

At the end of 2005, however, Parliament decided to use funds from the Oil Fund to solve urgent financial problems caused by the war against East rebels (see Current Policy). The World Bank responded by freezing the loans to Chad. The government then threatened to stop oil recovery. Finally, a compromise was reached which meant that 70 percent of all oil income, including taxes, should go to poverty reduction. At the same time, the Future Fund was abolished.

The settlement with the World Bank was a prerequisite for Chad's future debt cancellation in accordance with the IMF and the World Bank's program for the world's poorest and most debt-burdened countries (HIPC). In September 2008, however, the World Bank suspended its support for the oil sector in Chad, citing the government's use of oil revenues for the wrong things. Shortcomings in economic policy, with, among other things, resource-consuming investments in infrastructure projects, have led to Chad not yet fulfilling the requirements for debt write-offs according to HIPC. Foreign debt at the end of 2010 amounted to just over $ 1.7 billion.

Public procurement has been characterized by a lack of transparency and laced with suspicions of corruption. They have also led to a large budget deficit, in 2010 of almost 13 percent of GDP.

FACTS - FINANCE

GDP per person

US $ 730 (2018)

Total GDP

US $ 11,303 million (2018)

GDP growth

2.6 percent (2018)

Agriculture's share of GDP

44.8 percent (2018)

Manufacturing industry's share of GDP

3.0 percent (2016)

The service sector's share of GDP

37.6 percent (2018)

Inflation

3.0 percent (2019)

Government debt's share of GDP

48.3 percent (2018)

External debt

US $ 3 139 million (2017)

Currency

Central African Franc

Merchandise exports

US $ 135 million (1994)

Imports

US $ 212 million (1994)

Current account

- US $ 38 million (1994)

Commodity trade's share of GDP

43 percent (2018)

Main export goods

oil, livestock, cotton

Largest trading partner

USA, France, Cameroon, China

 

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