The Republic of CHAD : Economic Perspectives
Lockdown measures and border closures to limit the outbreak of the Coronavirus have driven the Chadian economy into recession, -0.9% in 2020. The economy has been impacted by the falling of global demand for oil.
However, the IMF expects the country to recover in 2021 (1.8%) following the increase of oil demand.
- The Primary sector only accounts for 6% of the country’s GDP and employs up to 76.3% of the workforce. Actually, most people working in Agriculture and Animal Husbandry are engaged in subsistence farming. The main crops are sorghum, millet and beer, sugar cane, groundnuts and cotton (little production). 10% of the total arable land are found in Sudan because most of the Chadian landscape is desert land.
- The Industrial Sector contributes to 3% of GDP and barely employs 2% of the working population. The Oil sector dominates the country’s economic activity, representing 60% of the export earnings but Chad also processes Cotton and cottonseed oil in its industries.
- The Tertiary Sector contributes to 5% of GDP and employs about 23% of the total working population. Even though the country has great potential for Tourism, insecurity and lack of infrastructure prevent its development.
With more than 15 million inhabitants, the 24th most populous country in Africa, Chad is the continent’s 30th richest country with an estimated GDP of USD 10.74 Billion in 2020. Although the country has a high level of education, it remains dominated by poverty and strong social inequalities : the World Bank estimated the poverty rate at 39.8% and the unemployment rate at 3.3% in 2019.
| Population (2020 UN) | 32.51 million inhabitants |
|---|---|
| GDP / Capita USD (2021, IMF) | USD 10.0 |
| HDI (2020, UNDP) | 79th over 190 |
| Doing Business (2020 World Bank rank) | 75th over 190 |
| Corruption Perceptions Index 2021 | 36h over 180 |
| Unemployment rate (FMI 2021) | 9.7% |
On a Demographic point on view, more than 50% of the population live in the Capital Kingston. 62.5% of the population are Evangelic, 2.6% Catholic, 14.2% have traditional beliefs and 20.9% are atheists. Density is at 271 inhabitants per Km², and literacy rate barely reaches 90% of the population.
On a Political point on view, Chad has been chaired since 1990 by Idriss Deby Itno, who was re-elected President of the Republic for the 5th time in April 2016. In power for 30 years, he died on April 20, 2021, of injuries received while commanding his army in fighting against rebels in the north of the country. His son Mahamat Idriss Deby has been named President of the Transitional Military Council and thus President of the Republic.
On an Economical point of view, the slight increase of the price of Oil and the start of production in new fields and the increase of Gold prices are expected to help Chad overcome the recession.
In response to the Covid-19 crisis, the Chadian government has invested 6% of the country’s GDP (equivalent) in a solidarity fund, which helped :
- Eliminate payment of electricity and water bills for the population
- Distribute food
- Reimburse payment arrears
A wage agreement has also been settled with social partners to improve the living conditions of the employees. USD 183 Million Facility and six-month debt relief were granted by the IMF. The debt-to-GDP ratio is expected to decrease to 41.7% in 2021 (vs 43% in 2020). Inflation is supposed to reach 3% in 2021 (vs 3.5% in 2020) while the overall deficit will increase to 3.8% in 2020 (vs only 1.9% in 2020).
| Economic Indicators | 2019 | 2020 | 2021e | 2022e | 2023e |
|---|---|---|---|---|---|
| GDP ($ Billion current price) | 230.87 | 205.46 | 225.86 | 231.69 | 246.72 |
| GDP growth (%) | 2.2 | -11.0 | 10.0 | 4.6 | 4.5 |
| Inflation rate (%) | 2.1 | 1.8 | 3.1 | 2.5 | 2.3 |
| Public debt (% GDP) | 27.1 | 35.1 | 35.0 | 36.9 | 38.5 |
| Current balance (% GDP) | -0.9 | 0.8 | 0.4 | 0.1 | -0.4 |
Focus on Exports and Imports
In 2019, Chad was the number 139th economy in the world in terms of GDP (current US$), the 153rd exporter in the world and 180th importer in the world. The country exported USD 1.19 Billion and imported USD 965 Million, resulting in a positive trade balance of USD 225 Million.
The top exports of Chad are Crude Petroleum ($877M), Gold ($252M), Other Oily Seeds ($34.8M), Insect Resins ($21M) and Raw Cotton ($1.34M). Chad exports mostly to China ($386M), United Arab Emirates ($253M), India ($225M), USA ($119M), and France ($73.5M).
The top imports are Delivery Trucks ($41.6M), Nonaqueous Paints ($41.1M), Packaged Medicaments ($238M), Planes, Helicopters and/or Spacecraft ($36.9M) and Broadcasting Equipment ($34.7M). It imports mostly from China ($278M), United Arab Emirates ($159M), France ($95.3M), USA ($77.6M) and India ($52.4M).
