Chad

Politics:

• Analysis

  Chad politics: Quick View - Public-sector strike difficulties continue

  Event

  On October 8th the Union des syndicats du Tchad (UST) warned that it might renew its call for strikes.

  Analysis

  The threat to resume strikes came after the UST said that mediation by religious leaders had failed to resolve disagreements with the government. Intermittent and minimum-service strikes began in July, but in mid-September the UST called for the industrial action to be suspended for a month, in order to give the government a chance to honour its commitments on salary increases. The mediation by religious leaders began in early September after the president, Idriss Deby, abruptly declared on television that budget constraints meant that it was no longer possible to implement some of the salary increases covered by a November 2011 agreement with the UST-under which 70,000 public-sector workers were due to receive a salary increase totalling CFAfr12.5bn (US$24.4m) over three years. However, during September relations between the government and the UST deteriorated further after a judge announced that the UST's president and vice-president would be jailed on charges of defamation and inciting racial hatred by circulating a petition criticising the "arbitrary powers" of Mr Deby and poor standards of governance in Chad. The judge also ordered a one-year prison term and a fine for a journalist on N'Djamena Hebdo, an opposition newspaper that reported the petition, and imposed a three-month suspension on the newspaper.

  The failure to bring an end to the strikes and to resolve the disagreements between the UST and the government is typical of Chad's dysfunctional government and public sector. Throughout Mr Deby's 22-year rule, Chad's public services have been plagued by intermittent strikes, and repeated and often prolonged delays in salary payments. In principle, the advent of oil income in the 2000s could have improved relations between the government and the UST and public-sector workers. However, the combination of corruption, patronage and profligate use of oil revenue has prevented any significant improvement in governance.

  October 19, 2012

• Background

  Chad: Constitution and institutions

  The constitution is revised

  Under the 1996 constitution the government is dominated by a strong executive branch, which has effective control over the judiciary and regional administration. The 155-seat National Assembly, whose members are elected by direct universal suffrage, remains theoretically the sole legislative body. The prime minister, appointed by the president, officially nominates the government. A revision to the electoral law, passed in 2000, gave northern and eastern electoral districts—traditional strongholds of the MPS—disproportionate representation in relation to their share of the population. It also placed the independent electoral commission under government control, as the government appoints 25 of its 31 members. The president has used these measures to ensure executive dominance over the National Assembly. In June 2005 a referendum approved significant changes to the 1996 constitution. These revisions included:

  • the removal of the limit of two five-year terms for the president;
  • the removal of the age limit of 70 for presidential candidates;
  • the abolition of the Senate (which was established in the constitution but never formed) and its replacement with an Economic, Social and Cultural Council, whose members would be nominated by the president; and
  • the stipulation that future constitutional revisions should be a presidential prerogative.

  Mr Deby Itno denied that the amendments were proposed to allow him to pursue a third term in office, claiming that they were needed to update obsolete provisions in the 1996 constitution. However, in addition to allowing him to be a candidate in the 2006 presidential election, the revisions enable Mr Deby Itno to further centralise the political decision-making processes around the presidency. With a hand-picked Economic, Social and Cultural Council and a National Assembly in which the ruling party, the MPS, holds a vast majority, Mr Deby Itno essentially has complete domination of the political system.

  June 20, 2007

• Structure

  Chad: Political structure

  Official name

  République du Tchad

  Form of state

  Unitary republic

  Legal system

  Based on the Napoleonic Code; the 1989 constitution was suspended in December 1990; a new constitution was adopted by referendum in April 1996 and amended in June 2005

  National legislature

  National Assembly, with 188 members; elected by universal suffrage

  National elections

  A legislative election was held on February 13th 2011; a presidential poll was held on April 25th 2011; the next elections are due in 2016

  Head of state

  President; re-elected by universal suffrage in April 2011

  National government

  The prime minister and Council of Ministers

  Main political parties

  Mouvement patriotique du salut (MPS; the ruling party); Fédération action pour la République (FAR); Rassemblement national pour la démocratie au Tchad (RNDT)-le Réveil; Rassemblement pour la démocratie et le progrès (RDP); Action pour le renouveau et la démocratie (ARD); Union pour la démocratie et la République (UDR); Parti pour la liberté et le développement (PLD); Alliance tchadienne pour la démocratie et le développement (ATD)

  Key ministers

  President: Idriss Déby

  Prime minister: Emmanuel Nadingar

  Agriculture & irrigation: Djimet Adoum

  Civil service & employment: Mahamat Abba Ali Salah

  Communications & government spokesperson: Hassane Sylla Bakari

  Defence & veterans' affairs: Benaindo Tatola

  Environment, water & fisheries: Hassan Térap

  Finance & budget: Christian Georges Diguimbaye

  Foreign affairs & African integration: Moussa Faki Mahamat

  Health: Mamouth Nahor N'gawara

  Infrastructure & equipment: Gata Ngoulou

  Interior: Kedallah Younous Hamidi

  Justice, public sanitation & good governance: Abdoulaye Sabre Fadoul

  Mines & geology: Nodjitolbaye Kladoumadji

  Oil & energy: Brahim Al Khallil Hileou

  Planning, economy & international co-operation: Bedouma Kordje

  Primary education: Etienne Faitchou

  Public security & immigration: Ahmat Mahamat Bachir

  Tourism & crafts: Abder-Assoul Aboubakar

  Trade & industry: Mahamat Allahou Taher

  Transport & civil aviation: Hassane Touka

  Governor of Banque des Etats de l'Afrique centrale

  Lucas Abaga Nchama

  December 11, 2012

Economy:

• Background

  Chad: Education

  Chad is among the world's least-developed countries

  Development of Chad's public services has been hindered by chronic political instability, poor infrastructure and limited financial resources. However, although Chad's social indicators are low even by Sub-Saharan standards, gradual progress has been achieved in developing infrastructure and improving basic services. Education and healthcare are still hampered by shortages of qualified personnel and problems of access in rural areas, where the population is sparsely distributed. It is hoped that the implementation of Chad's oil revenue management programme, which focuses on poverty reduction and the improvement of social services, will improve health and education standards (see The economy: Economic policy). The UNDP's human development index shows that there has been some progress since the 1970s, but Chad remains among the least-developed countries in the world, ranking 171st out of 177 countries surveyed in 2006. This places it between Ethiopia and the Central African Republic (CAR).

  Education is deficient

  Educational facilities at primary and secondary level remain inadequate and mainly concentrated in the non-Islamic south. According to the World Bank's 2006 African Development Indicators, adult literacy in 2004 was just 38%. Primary and secondary gross enrolment rates are low, standing at 71% and 15% respectively. The national university has about 1,500 students. Advanced training is provided by a teacher-training college, the Ecole nationale d'administration, and several private technical schools in N'Djamena. In 2003 there were 3,653 primary schools, 209 junior high schools and 36 higher secondary schools.

  June 20, 2007

• Structure

  Chad: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011a	2012a
  GDP at market prices (CFAfr bn)	3,808.3	3,255.9	3,986.6	4,492.1	5,223.4
  GDP (US$ bn)	8.5	6.9	8.0	9.5	10.2
  Real GDP growth (%)	-0.4	-1.6	13.0	3.1	6.2
  Consumer price inflation (av; %)	10.3b	10.0b	-2.1	-4.9	5.0
  Population (m)	10.7	10.9	11.2	11.5	11.8
  Exports of goods fob (US$ m)	4,232	2,876	3,593	4,704	4,857
  Imports of goods fob (US$ m)	-1,976	-2,573	-3,580	-3,758	-3,628
  Current-account balance (US$ m)	-1,146	-1,218	-2,958	-2,300	-1,668
  Foreign-exchange reserves excl gold (US$ m)	1,345b	617b	632b	951b	924
  Exchange rate (av) CFAfr:US$	447.8b	472.2b	495.3b	471.9b	511.0
  a Economist Intelligence Unit estimates. b Actual.

  Download the numbers in Excel

  Origins of gross domestic product 2009	% of total	Components of gross domestic product 2009	% of total
  Primary sector	57.2	Private consumption	77.8
  Secondary sector	8.9	Government consumption	15.5
  Tertiary sector	33.9	Gross domestic investment	32.4
  		Exports of goods & services	41.7
  		Imports of goods & services	69.5
  Principal exports 2009a	CFAfr bn	Principal imports 2009b	US$ m
  Oil	1,082.9	Oil sector	416.6
  Cattle	144.3	Non-oil sector	218.3
  Cotton	17.9	Public sector	178.2
  Main destinations of exports 2011c	% of total	Main origins of imports 2011c	% of total
  US	83.2	Cameroon	16.9
  China	6.8	France	15.7
  France	5.6	China	10.7
  Netherlands	1.1	Finland	6.5
  Germany	0.5	Sweden	6.0
  a IMF; b Banque des Etats de l'Afrique centrale official estimates. c Drawn from partners' trade returns, subject to a wide margin of error.

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  Download text file (csv format)

  December 11, 2012

• Outlook

  Chad: Country outlook

  Chad: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: Chad's political situation is set to remain largely stable over the 2013-14 forecast period. The president, Idriss Déby, has a large majority in the National Assembly and has consolidated his power over the political system. However, the risk of civil unrest remains, especially in relation to labour and wage disputes between the government and Chad's powerful unions. The Economist Intelligence Unit does not expect the government to make significant progress on fiscal reform in 2013-14, as it has persistently demonstrated that it lacks the incentive to do so. We forecast a real GDP growth rate of 4% in 2013 owing to lower oil output at the country's Doba fields. New oil developments will drive an acceleration of economic growth to 5% in 2014. The current-account deficit is set to widen from 16.3% of GDP in 2012 to 17.6% of GDP in 2013, before narrowing to 15.9% of GDP in 2014, in line with fluctuations in oil output and prices.

  DOMESTIC POLITICS: The political situation in Chad is expected to remain largely stable in 2013-14. Mr Déby, who was re-elected comfortably in April 2011, has a large pro-government majority in the National Assembly. He has consolidated his control over the political system and appears to enjoy the loyalty of the security services. The president will maintain his policy of stifling dissent and concentrating power in the hands of a small number of people. Mr Déby broadly commands the support of the army, but there is a persistent danger of him being toppled in a palace coup. Despite the current weakness of the rebels, it remains possible that senior members of the president's inner circle will defect, particularly if allies believe themselves to have been passed over for government posts. There is also potential for inter-ethnic hostilities, especially if Mr Déby's Zaghawa ethnic group is seen to receive preferential access to state services and funds. These inter-ethnic rivalries, together with the country's extremely low population density and the lack of a large and frustrated middle class, suggest that a popular uprising similar to those seen recently in North Africa is unlikely. Although the opposition is divided and usually unable to rally much popular support, it will seek to capitalise on labour and wage disputes between the government and Chad's powerful unions. Frequent sackings and reshuffles of the cabinet are likely to create an opportunity to highlight divisions within the ruling Mouvement patriotique du salut and challenge its dominance-although it is questionable whether the opposition will be able to take advantage of this. Lower international food prices will reduce the risk of cost-of-living protests, but the lingering possibility of unrest will limit the government's ability to implement any economic reforms that entail the cutting of government subsidies for food and fuel products. The rump of the rebel forces, grouped as Alliance nationale pour le changement démocratique since 2010, is unlikely to have much political impact. The insurgents are set to be a diminished force, as the non-aggression pact signed between the governments of Chad and Sudan looks likely to hold, thereby depriving the Chadian insurgents of the support and safe haven previously available to them in Sudan. Both countries' governments will continue to support joint military patrols of the common border. Nonetheless, the east of the country, where the UN peacekeeping force was stationed until end-2010, will remain highly insecure. The potential for internal tensions in Sudan and disputes between Sudan and South-Sudan means that joint security efforts in the border region could fall by the wayside. Although some Chadian insurgents operating in the Central African Republic (CAR) have surrendered and were repatriated in September 2012, the risk that security threats from northern CAR spill over across Chad's southern border cannot be ruled out. Following the hotly disputed legislative and presidential elections held in February and April 2011 respectively, which were followed in January 2012 by the country's first-ever local elections, no further significant polls are due to be held in 2013-14. We do not expect the next national elections, due in 2016, to be any fairer or less divisive than the 2011 polls.

  INTERNATIONAL RELATIONS: The rapprochement with Sudan is expected to hold in 2013-14 as both sides become more interested in enhancing crossborder transport infrastructure, with the vision of developing the trade route between Chad and the Red Sea. Chad's relations with the CAR will remain strong, although potential instability around the countries' shared border could disrupt this process. Chad will struggle to build the same warm ties with the current Libyan regime as those it enjoyed with the country's former dictator, Colonel Muammar Qadhafi. In any event, the new Libyan government is likely to review the extensive state investments in Chad and may cancel some of them. As the Chadian government will work hard to limit the fall in investment, we expect the strain on relations between the two countries to subside in 2013-14. Chad's likely contribution to a military intervention aimed at quelling an insurgency in Northern Mali will boost its regional influence. Diplomatic and commercial ties with France will remain important, although some discord will emerge, including over human rights, a major theme in the relations with Africa of France's new government. The future of France's decades-long military presence in Chad, currently around 1,000 troops, may give Mr Déby a strong hand in negotiations, as France wants to maintain a regional base in view of the instability in Mali and the Sahel. Despite tensions over the 60% Chinese-owned Djermaya oil refinery in early 2012, China will remain a leading player in helping to sustain Chad's declining oil sector and other areas of the economy. China is expected to extend soft loans to finance the fiscal deficit. The stake held by the US in Chad's oil industry and a small counter-terrorism programme-which could soon be enlarged if a regional terrorist group, al-Qaida in the Islamic Maghreb, is deemed to be active in the country-will ensure co-operation between the two nations. The US is set to remain by far the largest market for Chadian oil exports.

  POLICY TRENDS: In the absence of a staff-monitored programme, the IMF assesses Chad's economic and policy performance through yearly Article IV consultations. The latest Fund mission to Chad, in September 2012, once again highlighted that issues regarding fiscal policy remain unaddressed. There are concerns over the direction, efficiency and management of public spending, as well as the government's overdependence on oil revenue. The Fund has recommended that the government improve public expenditure management as well as non-oil revenue collection. However, we do not expect this to be acted upon strongly during the forecast period, as the government has demonstrated a lack of incentive to reform while oil revenue remains reasonably strong. Although these inflows are set to remain highly volatile, they will not fall sufficiently to alter the government's current lack of political will. Despite ranking next-to-bottom in the 2013 edition of the World Bank's Doing Business report, Chad does not seem intent on trying to improve the business environment, which we expect to remain unfavourable. While a new agreement for a Fund staff-monitored programme during 2013-14 is not impossible, it is far from being assured owing to the authorities' lack of political will. According to the most recent data available, Chad's budget balance was in surplus in 2011 thanks to relatively prudent expenditure management. However, in 2012 the fiscal accounts are estimated to have recorded a deficit as a result of below-target non-oil revenue collection and extra-budgetary spending, including on defence and subsidies to public enterprises. Overall, we expect the budget deficit to have come in at 2.3% of GDP. These trends are set to continue in 2013-14, as public expenditure management will remain weak and subsidies continue to weigh on the fiscal balance. The government may also end up paying substantial salary arrears to public-sector workers. As a result, the deficit is forecast to widen to 3.2% of GDP in 2013 and 3.7% of GDP in 2014. This forecast remains subject to substantial changes, as government revenue, around two-thirds of which comes from oil, is strongly influenced by international oil prices. The government is likely to turn to China and to domestic borrowing to cover these shortfalls. Monetary policy is managed by the regional central bank, Banque des Etats de l'Afrique centrale (BEAC), which prioritises controlling inflation and maintaining the CFA franc's peg to the euro. The BEAC has broadly tracked European Central Bank (ECB) policy, and we expect it to continue with this approach. The ECB cut its refinancing rate by 25 basis points to a new record low of 0.75% in July 2012. We expect it to cut the rate by a further 25 basis points to 0.5% in 2013, before gradually tightening policy from 2014 onwards. Under these circumstances, and given the relatively benign inflation outlook in the subregion, the BEAC may decide to lower its main policy rate, the taux des appels d'offres (auction rate), by 25 basis points during 2013, before raising it in 2014, roughly in line with changes in the ECB policy rate.

  ECONOMIC GROWTH: Although government spending on infrastructure is expected to fall well short of expectations, it will continue to rise in 2013-14, boosting the contribution made to growth by construction, especially through road building. Oil production from the Doba fields is expected to dwindle further in 2013-14, as the country's challenging geology has made it increasingly difficult for the operator, EssoChad, to extract oil. Meanwhile, the China National Petroleum Corporation continues its exploration and construction programme in the Ronier field in the Bongor basin, north of Doba, which is expected to yield 60,000 barrels/day once it reaches full capacity, although this figure is speculative and production will remain at or below the field's current capacity, estimated at 20,000 b/d, throughout 2013-14. Canada-based Griffiths Energy, which teamed up with Glencore, an Anglo-Swiss multinational, in 2012, hopes to reach significant production levels at its Badila and Mangara fields in 2014. Therefore, we provisionally forecast a drop in the country's total oil output in 2013, before a return to growth in 2014. Chad's manufacturing sector-the output of which comprises basic goods such as soap, cigarettes, sugar and some textiles-will remain small, at around 7% of GDP. However, a cement factory with an annual capacity of 200,000 tonnes opened in February 2012 and is expected to boost the industrial contribution to growth, as will the new oil refinery and its onsite 20-mw electricity plant. Nevertheless, constraints on larger-scale industrialisation, including small market size, low credit availability and the lack of skilled labour and infrastructure, will persist. Services, which account for around 40% of economic output (including government services), will experience some growth in 2013-14, led by telecommunications and banking, which will continue to attract foreign investment, particularly from Nigeria. Overall, we expect real GDP growth to moderate from 6.2% in 2012 to 4% in 2013 in line with a decline in oil production. In 2014 economic growth will accelerate to 5%, mainly driven by a recovery in the oil sector. However, given the importance to GDP of rain-fed agriculture-which, including livestock, forestry and fishing, accounts for 19% of GDP and is highly vulnerable to climatic fluctuations-our forecasts remain tentative.

  EXTERNAL ACCOUNT: Trends in oil production and prices will remain crucial for the current account during 2013-14. After firming to US$111.9/barrel in 2012, we expect Brent Blend to drop to US$103.8/b in 2013 and nudge back up to US$104.5/b in 2014. Export volumes are likely to drop slightly in 2013, before recovering in 2014 as some new wells come on stream. Despite some improvements in production, export receipts from cotton were undermined by a 40% fall in the international price of cotton in 2012. Assuming average weather conditions, exports will increase moderately as prices stabilise and output improves, and if rains are plentiful, we expect livestock exports to continue their improvement in 2013 and 2014. Mainly driven by oil, total exports will decline from US$4.9bn in 2012 to US$4.4bn in 2013, before increasing to US$4.8bn in 2014. Imports, estimated at US$3.6bn in 2012, are forecast to increase only slowly, as the newly built Djermaya oil refinery will drastically reduce the oil bill. We therefore expect an import bill of US$3.7bn in 2013 and US$3.8bn in 2014. The services deficit will widen gently in 2013-14, from US$2.1bn in 2012 to US$2.2bn in 2014, in line with the growth in imports. We expect the income deficit, driven mainly by profit repatriation by oil companies, to move in line with oil production and prices, causing a slight narrowing in 2013, when oil prices and output are expected to ease. The current transfers surplus will increase slightly to an average of US$569m in 2013-14, following movements in remittances from workers in both Western and neighbouring countries. Overall, we forecast the current-account deficit to widen from 16.3% of GDP in 2012 to 17.6% of GDP in 2013, before narrowing back to 15.9% of GDP in 2014. The deficit will be financed by borrowing from China, by donor funds and by investments from the foreign parent companies of local oil firms.

  December 11, 2012

View detailed map

Country Briefing

Land area

1,284,000 sq km

Population

12.1m (2012 World Gazetteer estimate)

Main towns

Population in 2012 (World Gazetteer estimates; '000)

N'Djamena (capital): 1,092

Moundou: 137

Sarh: 103

Abéché: 76

Climate

Tropical in the south, semi-arid in the Sahelian belt, and desert and semi-desert in the north

Weather in N'Djamena (altitude 295 metres)

Hottest month, April 23-42°C; coolest month, December, 14-33°C; driest months, November-March, 0 mm average rainfall; wettest month, August, 320 mm average rainfall

Languages

French and Chadian Arabic (Tourkou) are the official languages; over 100 local languages, including Sara derivatives, are also widely spoken

Measures

Metric system

Currency

CFA franc

Time

1 hour ahead of GMT

Public holidays

Fixed holidays: January 1st (New Year's Day), May 1st (Labour Day), August 11th (Independence Day), November 1st (All Saints' Day), November 28th (Republic Day), December 1st (Freedom and Democracy Day), December 25th (Christmas)

Moveable holidays (according to Christian and Muslim calendars): Eid al-Adha, El am Hejir (New Year), Mawlid al-Nabi (birth of the Prophet), Eid al-Fitr (end of Ramadan), Easter

March 01, 2012