Overview

Country Overview

Since gaining independence from France in 1960, Chad, a landlocked country in central Africa, has been plagued by instability stemming from internal rivalries between ethnic groups, conflicts in neighboring countries, and the impacts of climate change through desertification and the drying up of Lake Chad.

Political Context

President Idriss Deby Itno and his party, the Patriotic Salvation Movement, have dominated Chadian politics since ascending to power in 1990. Deby 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.  While the opposition contested the results each time around, their voice became louder during the latest electoral process as civil society organizations joined them to protest austerity measures that followed the protracted economic crisis that has been crippling the country since 2015. Although the term of the current legislature ended in March 2015, parliamentary and municipal elections are expected sometime in 2017. Earlier in 2016, a special criminal court in Dakar, Senegal found former president Hissene Habre guilty of crimes against humanity and sentenced him for life.

President Idriss Deby Itno was sworn-in for a fifth term on August 8, 2016 in N’Djamena during a public ceremony attended by fourteen heads of state and many more foreign officials. He is currently chairing the African Union (January 2016 to January 2017).

Economic Overview

Chad joined the list of oil-producing countries in 2003, and since then, its economy has become heavily dependent on oil. The Chadian economy, which was predominately agrarian, saw its gross domestic product per capita (GDP) grow from approximately $220 in 2001-2002 (less than half of the average in Sub-Saharan Africa) to approximately $1,024 in 2014.

However, the recent oil price collapse that started in 2015, the rainfall deficit, and the deterioration of the security situation have led to a recession, wiping out all the gains that led to reaching HIPC Completion Point in April 2015.

Despite expenditure cuts, domestic arrears reached 3.9% of non-oil GDP at end-2015. The ensuing large 2015 fiscal deficit was financed primarily through the rescheduling of oil-sale advances, the issuance of treasury bonds in the regional debt market, statutory advances from the Central Bank, IMF disbursement and budget supports from the World Bank, the European Union, and the African Development Bank (AfDB). The same institutions are planning another budget support for 2016 as the fiscal situation further worsened. Chad ranked 183 out of 189 on the 2016 Doing Business ranking.

Short and Medium Term Outlooks

In the short term, the government needs to raise more fiscal revenues while reducing expenditures. Prospects for the short-term are more difficult because oil prices continue to remain low, export volumes are constrained and the government needs to repay the Glencore oil sales advances.

In the medium term, the establishment of a stabilization fund, economic diversification, and ways to mitigate regional security risks as well as providing military escorts to secure selected trade corridors that allow movement of goods and people in an insecure environment need to remain high on the agenda.  Instability in oil revenues complicates fiscal management and budgetary planning. Regional instability is affecting economic activity by impacting trade, public expenditures, and private investments.

Social Context

In January 2015, Chadian troops joined Cameroonian and Nigerian troops to combat Boko Haram. Chad has been at the forefront of this operation to root out terrorism to help maintain stability, security, and peace in the region. Deadly suicide bombings hit N’Djamena in June and July 2015 causing dozens of fatalities and injured many more. Subsequent attacks have been sporadic.

As the military campaign continues, humanitarian issues have emerged. Chad is hosting about 400,000 refugees from Sudan, the Central African Republic (CAR), and Nigeria, all of whom represent about 4% of the country’s population. Other returnees and internally displaced people in significant numbers also need humanitarian assistance. Hosting communities have shared their land, food and houses on occasion and hope to see their lives improved as well. The plight of these people is exacerbated by the climatic conditions, as changing weather patterns are worsening their fate.

Development Challenges

Chad is ranked 185 out of 188 countries according to the 2015 United Nations Development Program (UNDP) Human Development Index (HDI). Many Chadians still face severe deprivation and most of the Millennium Development Goals were not 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. Progress on non-monetary poverty presents a mixed picture, with gains in some areas offset by losses in others. According to the joint Demographic and Household Survey (DHS) and Multi-Indicators Clusters Surveys (MICS) undertaken in early 2015, infant mortality has decreased from 91% during the period of 2005-2009 to 72% during the period of 2010-2014. Child mortality has also decreased from 79% to 65% over the same periods, while maternal mortality fell from 1,099 per 100,000 births to 860 per 100,000 births.

Last Updated: Oct 18, 2016

World Bank Group Engagement in Chad

Chad joined the World Bank in 1963. Since then, the World Bank has financed more than 50 development projects, supporting the country’s efforts to achieve sustainable economic growth while reducing poverty.

The World Bank Group’s engagement in Chad in the past decade has largely taken the form of support for the Chad-Cameroon Pipeline Project (CCPP). The Bank contributed to the financing of the pipeline through three credits subject to an agreement on the use of the oil revenues. In 2010, the World Bank’s Board of Executive Directors approved an Interim Strategy Note (ISN) for engagement in Chad covering the period of June 2010 to June 2012. The main objectives were to re-establish fruitful collaboration and dialogue between state and non-state actors, and expand the Bank’s knowledge base for stronger engagement in the future.

Following implementation of the 2010-2012 Interim Strategy Note, the government prepared a National Development Plan (NDP) for the 2013-2015 period. The Bank helped organize of a donor conference in Paris in June 2014 to mobilize funds in order to bridge the financing gap of the 2013-2015 NDP. Moreover, the Bank is engaged in areas that fall within the framework of this plan and are consistent with the Country Partnership Framework (CPF 2016-20) approved by the World Bank Board of Executive Directors on December 10, 2015.

The World Bank Group portfolio consists of eight national International Development Association (IDA) operations totaling $143 million of commitments, five trust funds, and three regional IDA operations.

International Finance Corporation (IFC)

IFC commitments in Chad currently stand at about $63 million. IFC is teaming up with the World Bank to support developing a programmatic approach to improving the investment climate. In addition to facilitating access to finance via extending its risk sharing facility to selected commercial banks (ECOBANK and ORABANK) and rolling out a leasing program in Chad, IFC is investing in mobile communications (Milicom) and private health service delivery.

Last Updated: Oct 18, 2016

Education Reform

The second phase of the Chad Education Sector Reform Project (PARSET), approved in June 2013, aims to improve teaching and learning conditions in primary and secondary schools in selected areas. The following are the results obtained during the first phase:

  • 400 classrooms were built and equipped;
  • 2,606,300 textbooks were procured and distributed to schools;
  • 20,000 people (60% of whom are women) were taught to read and write;
  • 11,700 community teachers were trained; and
  • A new national center for curriculum development was created, and the overall rate of children attending school increased from 87% in 2003/2004 to 96% in 2007/2008.

Macroeconomic Stability and Fiscal Consolidation

In 2015, the Bank started a series of DPOs to support the government’s efforts towards fiscal consolidation in order to maintain macro stability and improve public finance management (PFM) as the country continues to face the wrath of a severe economic crisis due mainly to the oil price collapse and the costly operation against Boko Haram.

Women’s Health and Empowerment

The Bank is partnering with UNFPA to raise awareness and promote women’s health and participation in income generating activities. In June 2014, Parliament voted to prohibit underage girls’ marriage prior to 18. Chad ranks second in the world after Niger in terms of female fertility, but more women are engaging in using modern contraceptive methods.

Emergency Project to Assist Central African Republic (CAR) Refugees

The Bank is partnering with the Food and Agriculture Organization (FAO) and the World Food Program (WFP) to assist returnees and refugees from the CAR crisis and host communities in the south of Chad. A new initiative is being launched in partnership with UNHCR to transform two pilot refugee camps (Gombe and Amboko) into integrated villages where all victims of forced displacement and local communities will be supported to engage in livelihood and sustainable economic activities that will help them take care of themselves.

Last Updated: Oct 18, 2016

The World Bank Group is an active member of the Financial and Technical Partners Committee (Comité des Partenaires Techniques et Financiers CPTF), which includes all United Nations agencies represented in Chad as well as the African Development Bank (AfDB), the European Union, the Swiss Agency for Development and Cooperation, France, Germany, and the United States. 

Last Updated: Oct 18, 2016


LENDING

Chad: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments