Chad flag Chad: Economic and Political Overview

The economic context of Chad

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

In 2021, Chad saw an economic rebound from the pandemic, with the country recording a GDP growth of 0.9%. However, the continued fallout of the health crisis, as well as Chad's political and security instability, hampered a stronger growth. The country should recovering throughout 2022 and 2023, with growth rates reaching 2.4% and 2.5%, as demand surges. The slight rise in oil price and the start of production at new fields should help the country continue to overcome the impact of the crisis. Gold’s prices are another factor likely to contribute to the good performance of the Chadian economy this year.

In 2021, the government continued implementing a series of fiscal measures put in response to the COVID-19 crisis, which have been effective. IMF has helped Chad through a facility of USD 183 million and a six months alleviation of the debt of the country. In 2021, the debt-to-GDP ratio decreased to 44%, and it should remain stable at 44.3% in 2022 and 42.8% in 2023. As for the country's inflation rate, it stood at 2.6% in 2021, and it is expected to reach 2.8% in 2022 and maintain that rate in 2023. In 2022,  the gradual removal of COVID-related spending and the expected increase of oil receipts will boost the government’s revenues. The current account deficit is expected to remain relatively stable, going from 5.2% in 2021 to 4.7% in 2022 and 5.8% in 2023. While export earnings are expected to increase over that period, growth in imports of goods and services to support development in the oil sector should to be quicker.

While it records a high level of schooling, Chad is still dominated by poverty and strong social inequalities. However, in the past few years, the percentage of poor people has reduced, but the crisis the country now experiences has raised the poverty rate (to 39.8% in 2019, according to the World Bank). In 2020, the unemployment rate in the country was at 2.3%.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 10.9310.8412.3512.9513.72
GDP (Constant Prices, Annual % Change) 3.0-0.80.92.42.5
GDP per Capita (USD) 686e660e730744766
General Government Gross Debt (in % of GDP) 52.347.9e44.044.342.8
Inflation Rate (%) -1.04.52.62.82.8
Current Account (billions USD) -0.52-0.88-0.65-0.61-0.79
Current Account (in % of GDP) -4.8-8.1-5.2-4.7-5.8

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture and livestock breeding are important economic activities that employ 75% of the population - most of them are engaged in subsistence farming. Overall, the primary sector accounts for 46.3% of Chad’s GDP (World Bank). Main crops grown are sorghum, millet, and berebere, with minor production of cotton, sugarcane and peanut. A vast part of Chad’s landscape is a desert landscape, and the country’s most fertile croplands (the areas with an average annual rainfall of 800 millimetres or more) are in the Soudanian, which accounts for about 10% of the total land area. The pandemic, coupled with a deterioration of harvests, had a significant impact on agriculture in 2020, with an important loss in income and employment and an increase in food prices as a result of the supply chain disruption. However, 2021 showed signs of recovery in the sector, which should continue in 2022.

The industrial sector contributes 14.2% of GDP and employs 1.8% of the active workforce. The petroleum sector dominates the economic activity – accounting for about 60% of export revenues - and attracts the bulk of foreign direct investments. Processing of cotton and cottonseed oil are other major industries. In an effort to diversify the economy and make it less dependent on global oil prices, the government of Chad has launched its national development plan (PND). However, high costs of energy and transport prevents the emergence of a robust industrial sector in the country.

The services sector is estimated to account for 43.8% of Chad’s GDP and for 23% of total employment. While Chad has great potential for tourism, insecurity and infrastructure deficit have been hampering the sector’s growth. Nevertheless, even though tourism is a relatively minor industry, it was severely impacted by the pandemic. In 2021, however, tourism started to recover, especially in the Zakouma National Park area, which attracts the highest number of visitors in the country.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 75.1 1.9 23.1
Value Added (in % of GDP) 47.7 16.9 46.9
Value Added (Annual % Change) 2.4 -0.2 -5.2

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
50,4/100
World Rank:
158
Regional Rank:
38

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

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Latest Update: April 2022

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