Since independence from France in 1960, Chad—a landlocked country in central Africa—has been plagued by instability from internal rivalries between ethnic groups, conflicts in neighboring countries, and the impact of climate change through desertification and the drying up of Lake Chad.
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, 2011, and 2016 elections. The electoral processes during these elections have, however, been controversial: the regime has faced growing public protests, rallying the youth, especially, since the April 2016 presidential elections. are Demonstrations have become more frequent and have focused on a number of issues: the cost of living, budgetary austerity, corruption, impunity, and President Déby’s election for a fifth term. These demonstrations are led by Chadians from specific social and professional categories (students, young unemployed graduates, teachers, and civil servants), and it has been a long time since social protest gained such momentum.
Although the term of the current legislature ended in March 2015, President Idriss Deby announced (in February 2017) a further postponement of more than two years (for "budgetary reasons”) of parliamentary elections initially due in 2015. A lack of funds was blamed, as the protracted decline of oil prices has kept the economy in severe recession. In February 2018, the National Assembly voted to extend the mandate of city mayors for the same reason.
Chad joined the list of oil-producing countries in 2003 and since then its economy has been heavily dependent on oil. The economy, previously agrarian, saw per capita GDP grow from about $497 in 2001/02 (which was less than half of the average in Sub-Saharan Africa) to about $967 in 2014.
However, the combined effect of the 2014 drop in oil price and the weak security environment have left the country in deep recession, with poverty expected to rise to 39.8% by 2019. This is reflected in cuts in public expenditure, low foreign direct investment, and a loss of income caused by the disruption of cross-border trade with Nigeria in livestock. Nonetheless, there were modest increases in agriculture, which constitutes the primary sector of employment for nearly 75% of Chad’s working age population.
Despite severe fiscal adjustment, the overall fiscal deficit (cash basis) increased slightly from 4.4% of non-oil GDP in 2014 to 4.9% in 2016. This was financed through treasury bonds in the regional debt market, IMF disbursement, and budgetary support from donors. The increase in public debt has led to the risk of debt distress: hard currency rationing and substantial fiscal consolidation had reduced the external current account deficit from 11.3% of GDP in 2015 to 5.2% in 2017, but Chad’s official reserves continue to fall, representing barely a month’s worth of imports as of 2017.
Short- and Medium-Term Outlooks
In the short-term, the government needs to raise more fiscal revenue while reducing expenditure. Prospects are difficult because oil prices remain low, export volumes 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 need to remain high on the agenda, as well as providing military escorts to secure selected trade corridors that allow movement of goods and people. Instability in oil revenue complicates fiscal management and budgetary planning, and regional instability is affecting economic activity by impacting trade, public expenditure, and private investment.
Chadian government employees saw a drop in their monthly salary in January because of the new Budget Act 2018, which stripped away some of their bonuses and allowances. As a result, the Labor Union Platform called an unlimited general strike in the public sector. In March, the trade unions and government signed an agreement that put an end to the strike. The government committed to back pay on public salaries but obtained a three-month moratorium (February, March, April) from banks on loans. The two parties also agreed on the suspension of the census and to study other measures as an alternative way to save 30 billion CFA francs on the wage bill.
Chad is hosting about 400,000 refugees from Sudan, the Central African Republic (CAR), and Nigeria, who represent about 4% of the country’s total population. Returnees and internally displaced people also need humanitarian assistance: host communities have shared their land, food, and houses, and hope to see their lives improved as well. The plight of these people is exacerbated by the climate with changing weather patterns worsening their fate.
Chad is ranked far down on the 2015 United Nations Development Program (UNDP) Human Development Index (HDI), at 185 out of 188 countries. Many Chadians face severe deprivation; most of the Millennium Development Goals were not met by 2015. Between 2003 and 2011, Chad achieved moderate but significant progress in poverty reduction, with the national poverty rate falling from 55% to 47%. However, with this current economic and financial crisis, poverty could increase, and the absolute number of poor is projected to rise from 4.7 million to 6.3 million between 2012 and 2019.
Progress on non-monetary poverty presents a mixed picture, with gains in some areas offset by losses in others. According to a joint Demographic and Household Survey (DHS), and Multi-Indicators Clusters Surveys (MICS) undertaken in early 2015, infant mortality has decreased from 91% in 2005–2009 to 72% in 2010–2014. Child mortality has also decreased from 79% to 65%, while maternal mortality fell from 1,099 per 100,000 births to 860 per 100,000 births.
lastupdated: May 17, 2018