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Economy and business in Chad

According to the UN Development Report, Chad is one of the world's least developed countries. This is due to a combination of the colonial heritage, few investments, poor political governance and the country's natural foundations and geography.

Business and Economy of Chad

According to countryaah, Chad was a small priority colony under French rule. France developed no industry and little infrastructure, and few roads, schools and hospitals were built. Since 1960, the country has been characterized by repeated civil wars and uprisings that have hampered long-term investments. The war in Darfur, in neighboring Sudan, also placed burdens on Chad from the early 2000s, especially in the form of refugees. None of the post-colonial Chad presidents has practiced democratic politics. The governance is characterized by nepotism and unpredictability.

In 2003, Chad began exporting oil through a 1900 km long pipeline that runs through Cameroon to the port city of Kribi. A prerequisite from the World Bank, for loans for the construction of the pipeline, was that a significant part of the proceeds should be used for social purposes. Oil revenues had an enormous impact on Chad's economy, and from 2001 to 2014, GDP per capita in the country doubled from less than 500 dollar for around $ 1000. When oil prices were high, Chad made big money on the oil, but the fall in oil prices in 2014 had major negative consequences. Oil production revenues account for about 60 percent of the state's revenues. After 2018, oil prices have again been high. The profits benefit the population to a very small extent, but are used to pay international creditors and pay the president's own family.

Mining and energy

Chad has deposits of several minerals, especially gold, bauxite, tin, tungsten, titanium, iron, baking soda and oil. However, these are recovered to a small extent, mainly due to poor communication and lack of investment. Until the export of oil started in 2003, the extraction was limited to baking soda, as well as some gold mining, which is considered to have significant potential, especially in Mayo-Kebbi. The country's first gold mine was opened in 2001 in Ganboké. Sodium is found at the northern end of Lake Chad and is exported especially to Nigeria.

Oil production

Exploration for oil started in the north of the country in 1977, and modest quantities of oil were first mined in 1979, then stopped because of the security situation. In 1993, mapping in the Doba basin in southern Chad began. It is estimated here that there are approximately 900 million barrels, sufficient for recovery in 25-30 years.

Doba's oil production started in 2003. Exports started in 2004 and are done by a consortium of companies ExxonMobil, Petronas and ChevronTexaco. Full capacity was estimated at 225,000 barrels per day. In the peak year 2005, 173,000 barrels of oil per day were produced, but this fell to 78,000 barrels per day in 2015, following the global fall in oil prices. Since then it has again increased to between 120,000 and 150,000 barrels per day. Rehabilitation of the old oil field in Sédigui in the north began in 2000, but then stopped.

Electricity

Electricity is produced at oil-fired power stations, with installed capacity of 29 MW at the beginning of the 2000s. The rest of the power consumption is covered by imports from Nigeria.

Agriculture and fishing

Agriculture is the most important trade route for most of Chad's inhabitants, but agriculture is poorly developed. For many, it's about feeding yourself and your family.

Agriculture is the dominant industry in Chad, and employs about three-quarters of the working population, the vast majority at a self-sustaining level. Agriculture accounted for 40-50 per cent of GNP until the recovery of oil changed the economic picture.

Agriculture is essentially twofold. In the south, intensive agriculture is partly run, including cotton cultivation, while extensive animal husbandry is run in central parts of the country, partly by nomads. All the way to the north, camels and sheep are kept and dates are grown. In central Chad a lot of cattle are kept, which is the country's most important sector economically. About 40 per cent of the country's workforce is employed in animal husbandry. Despite low rational operation, it normally generates a surplus for exports of livestock and meat. A large part of meat production is exported illegally, mostly to Nigeria, and is not reflected in economic statistics.

Only 2.5 per cent of the total area is cultivated, and arable farming is mostly run by traditional methods. In addition to cattle, the cultivation of cotton is of the utmost economic importance, and is an important prerequisite for the country's industry. Other important crops are wheat, millet, peanuts, cassava, corn, rice, rubber and dates. Chad lies in the dry Sahel belt, and is often affected by rainfall and drought, and crops vary greatly. War actions over many years have also been a major burden on agriculture.

Fishing in the Chad Sea has been significant, but in recent decades it has become noticeably smaller as a result of the drying of the lake and Boko Haram's ravages.

Industry

Chad's industry is little developed and is insignificant to the country's economy. In 2002, it accounted for just over 8 per cent of GNI. After 2003, when oil exports started, the country saw a beginning of industrial development. The sector is concentrated on the processing of agricultural products. Most important is the production of textiles, followed by foodstuffs. Almost all industry is concentrated in and around N'Djamena and Moundou.

Foreign Trade

Chad has a significant deficit in the trade balance with other countries, both because of the large import and costly transport, and the country receives substantial financial support, particularly from France. Exports mainly consist of oil, while also to a certain extent cotton and animals. Due to both drought and war, the volume of exports has varied greatly from year to year. Main trading partners are France, China, Cameroon, Nigeria and the United States.

Transport and Communications

Chad's isolated location far from the sea poses major problems for outward transport, and a lack of transport infrastructure, for example, is an obstacle to economic development. There are no railways, and the road network of about 40,000 km is partly of poor quality. There is an international airport in the capital N'Djamena. Smaller airports can be found in Abeche, Moundou and Sarh.

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