Since independence from France in 1960, Chad, a landlocked country in Central Africa, has been plagued by instability and conflict arising from tensions between different religious and ethnic factions.
President Idriss Déby Itno and his party, the Patriotic Salvation Movement, have dominated Chadian politics since ascending to power in 1990. Déby won the 1996 elections—the first multi-party elections held in Chad—as well as the 2001, 2006, and 2011 elections. The electoral processes during these elections have, however, been controversial. President Deby’s party won the legislative elections of February 2011, with 118 of the 188 seats in the National Assembly (however these results were contested amidst accusations of massive fraud). The party in power also won the local elections held on January 2012, while opposition parties won the majority of votes in Mondou, the main economic city of the south, as well as Bébédjia, an important city in Chad’s oil region.
Chad joined the list of oil-producing countries in 2003, and its economy has become heavily dependent on oil. Before the start of the oil era, the Chadian economy was predominately agrarian, with per capita gross domestic product (GDP) estimated at around $220 in 2001-2002—less than half of the average in Sub-Saharan Africa. In 2013, per capita GDP had risen to approximately $1,226. The upsurge in revenue from oil production led to a substantial increase in public spending on social programs aimed at reducing poverty and improving health. However, the decline in the poverty rate was more than offset by population growth. Consequently, the total population affected by poverty in Chad increased by 15%.
Macroeconomic performance remains stable in 2014, with a slight increase in economic growth. GDP is expected to increase by 9.6% in 2014, against 3.9% in 2013. Non-oil GDP is projected to reach 6.3% in 2014—against 5.9% in 2013—largely as a result of a return to higher levels of agricultural production. In 2014, with the coming on stream of new oil fields, oil GDP is expected to grow by 30%, against a drop of 6% in 2013. However, the heavy dependence of public finances and the entire economy on oil revenue makes the outlook highly vulnerable to negative oil price shocks. In the medium and long term, economic growth will return to a slightly higher level than the population growth rate.
The 12-month inflation rate fell to 0.2% in 2013 as a result of both the favorable harvest and the lowering of energy and housing costs. It is forecasted to converge to the 3% target for the CEMAC (Central African Economic and Monetary Community) zone by 2014.
Public debt indicators in Chad have remained relatively stable in recent years. However, the risk of debt distress is still high in light of the fact that in 2014, an advance of $1.3 billion was taken on oil sales to finance the purchase of shares (25%) by the State in the largest oil consortium operating in Chad.
In July 2013, a Staff Monitored Program (SMP) for June to December 2013, approved by the IMF Executive Board, was satisfactorily completed. The success of the SMP facilitated access to the Extended Credit Facility (ECF) in August 2014, which was implemented satisfactorily in six months and met the social sector triggers, resulting in achievement of the completion point and allowing Chad to benefit from debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). The progress made toward the HIPC completion point (including improvement of the Country Policy and Institutional Assessment (CPIA)) should help significantly reduce vulnerabilities associated with Chad's debt.
The instability in Darfur (Sudan), South Sudan, Libya, Central African Republic (CAR), and northern Nigeria prompted a massive influx of refugees and returnees and internal displacement of Chadian civilians. Ranked by the United Nations High Commissioner for Refugees (UNHCR) as the African country with the second highest number of refugees, Chad currently has over 650,000 refugees, more than 359,000 of whom come from Sudan, 106,650 from CAR, and thousands from Nigeria fleeing the atrocities committed by Boko Haram.
To address this situation, Chad has called on the international community for €32 million in assistance, an appeal to which the technical and financial partners, including the World Bank, have responded. Total World Bank assistance amounts to $21.5 million and supports an emergency project targeting those affected by the crisis in CAR as well as another project aimed at ensuring the reinsertion and integration of victims over the long run.
Chad is ranked 184 out of 187 countries according to the 2014 United Nations Development Program (UNDP) Human Development Index (HDI). Despite improvements in school attendance and access to potable water, many Chadians still face severe deprivation and most of the Millennium Development Goals will not be met by 2015. Between 2003 and 2011, Chad achieved moderate but significant progress in overall poverty reduction, with the national poverty rate falling from 55% to 47% during the period.
Last Updated: Oct 21, 2014