The Full Wiki

Economy of Chad: Wikis

Advertisements
  
  
  

Note: Many of our articles have direct quotes from sources you can cite, within the Wikipedia article! This article doesn't yet, but we're working on it! See more info or our list of citable articles.

Encyclopedia

From Wikipedia, the free encyclopedia

Economy of Chad
Currency CFA Franc (XAF)
Fiscal year Calendar year
Trade organisations AU, WTO
Statistics [1]
GDP ranking 132st (2005) [2]
GDP $15.66 billion (2004)
GDP growth 38% (2004)
GDP per capita $1,600 (2004)
GDP by sector agriculture: {22.6%}, industry: {35.6%}, services: {41.7%) (2004)
Inflation 8% (2004)
Pop below poverty line 80% (2001)
Labour force N/A (2004)
Labour force by occupation agriculture more than (80%) (subsistence farming, herding, and fishing)
Unemployment N/A (2004)
Main industries oil, cotton textiles, meatpacking, beer brewing, natron (sodium carbonate), soap, cigarettes, construction materials
Trading Partners [3]
Exports $365 million (2003)
Export - Commodities cotton, cattle, gum {arabic}
Main partners U.S. 74.2%, the People's Republic of China 14.8%, Portugal 5.2% {2004)
Imports $500.7 million( 2004)
Imports - Commodities machinery and transportation equipment, industrial goods, petroleum products, foodstuffs, textiles
Main Partners France 22.9%, Cameroon 13.7%, U.S. 11.8%, Portugal 10.9%, Germany 7.7%, Belgium 4.8% (2004)
Public finances [4]
Public debt N/A
Revenues $1.131 billion (2004)
Expenses $957.7 million (2004)
Economic aid $238.3 million (recipient) note - $125 million committed by Taiwan (1997); $30 million committed by African Development Bank; ODA $150 million 2001)
The Doba oil field, located in in southern Chad, offers substantial promise of foreign income.

Landlocked Chad's economic development suffers from its geographic remoteness, drought, lack of infrastructure, and political turmoil. About 85% of the population depends on agriculture, including the herding of livestock. Of Africa's Francophone countries, Chad benefited least from the 50% devaluation of their currencies in January 1994. Financial aid from the World Bank, the African Development Bank, and other sources is directed largely at the improvement of agriculture, especially livestock production. Because of lack of financing, the development of oil fields near Doba, originally due to finish in 2000, was delayed until 2003. It was finally developed and is now operated by Exxon Mobil Corporation.[1]

Economic statistics for Chad must be treated with caution. Significant trade with neighbouring countries, e.g. exports of camels and other livestock to neighbouring states, such as Libya, and imports of manufactured goods, are conducted "informally" and probably not fully recorded.

Contents

Macro-economic trend

This is a chart of trend of gross domestic product of Chad at market prices estimated by the International Monetary Fund with figures in millions of CFA Francs.

Year Gross Domestic Product US Dollar Exchange Inflation Index (2000=100)
1970 90,500 N/A N/A
1975 149,400 N/A N/A
1980 146,801 225.15 CFA Francs 44
1985 390,350 449.19 CFA Francs 69
1990 439,300 272.18 CFA Francs 64
1995 721,729 499.12 CFA Francs 85
2000 986,013 709.87 CFA Francs 100
2005 2,859,966 526.60 CFA Francs 118

Current GDP per capita of Chad grew 23% in the Sixties reaching a peak growth of 80% in the Seventies. But this proved unsustainable and growth consequently scaled back to 30% in the Eighties. Finally, it shrank by 40% in the Nineties.

Average wages in 2007 hover around $3-4 per day.

Structure and sectors

In 2000, Chad's nominal GDP was estimated at just over $1.43 billion with per capita income at approximately $188. Cotton, cattle and gum arabic are Chad’s major exports. More than 80% of the work force is involved in agriculture (subsistence farming, herding, and fishing). Like many other developing countries, Chad has a small formal sector and a large, thriving informal sector. Government statistics indicate the following distribution: Agriculture--38% (farming--23%, livestock--12%, fishing--3%); industry--13%; and services--45%. Chad is highly dependent on foreign assistance. Its principal donors include the European Union, France, and the multilateral lending agencies.

Exports

Chadian exports in 2006

Primary markets for Chadian exports include neighboring Cameroon and Nigeria and France, Germany, and Portugal. Until crude oil production began in 2003, cotton played the dominant role, accounting for 40% of total exports in 1999 and remains important. Rehabilitation of Cotontchad, the major cotton company that suffered from a decline in world cotton prices, has been financed by France, the Netherlands, the European Economic Community (EC), and the International Bank for Reconstruction and Development (IBRD). As of January 2002, the parastatal was undergoing privatization.

The other major export is livestock, herded to neighboring countries. Herdsmen in the Sudanic and Sahelian zones raise cattle, sheep, goats, and, among the non-Muslims, a few pigs. In the Saharan region, only camels and a few hardy goats can survive. Chad also sells smoked and dried fish to its neighbors and exports several million dollars worth of gum arabic to Europe and the U.S. each year. Other food crops include pearl millet, sorghum, peanuts, rice, sweet potatoes, manioc, cassava, and yams.

Instability and uncertainty

Local market in Abeche

Chad’s economic performance continues to depend on fluctuations in rainfall and in prices of its principal export commodities, especially cotton. Between 1996 and 1998, the Chadian economy averaged 4.7% growth from. However, unfavorable weather conditions contributed to disappointing harvests in 1999-2000, and GDP grew only by 1% and 0.6% respectively. Inflation was estimated 3.7% in 2000 after prices fell by 8% in 1999.

The effects on foreign investment of years of civil war are still felt today, as investors who left Chad between 1979-82 have only recently begun to regain confidence in the country's future. By early 1983, the return of internal security and a successful Geneva donors' conference had prompted a number of international business representatives to make exploratory visits to Chad. By far the most important venture to date is the oil extraction project in southern Chad.

As of 2004 the economy of Chad has been subjected to further pressure due to fleeing refugees from the conflict in the neighbouring Darfur region of Sudan.

Structural reform

Leather shop in Abeche.

Since 1995, the Government of Chad has made incremental progress in implementing structural reforms and improving government finances under two successive structural adjustment programs. Most state enterprises have been partially or completely privatized, nonpriority public spending has been lessened and the government has gradually liberalized some key sectors of the economy. Liberalization of the telecommunications, cotton and energy sectors is expected to proceed over the next several years. In May 2001, the IMF announced that Chad would qualify for the Heavily Indebted Poor Countries (HIPC) debt relief initiative.

Oil production

Beginning in late 2000, the Doba Basin oil project has stimulated major investments into Chad and it is expected to double government tax revenues by 2004. It is hoped that this project will serve as a catalyst for the entire economy by helping to reduce energy costs and attract additional trade and investment in other sectors. The question remains whether Chad will continue to consolidate its economic reforms and invest its oil revenues wisely in order to encourage a wider range of economic initiatives. Recent political controversy surrounding the contested 2001 presidential election and a continuing rebellion in northern Chad have continued to dampen Chad's economic prospects by exposing the weaknesses in Chad's political institutions.

The International Monetary Fund has projected high growth rates during the next 3 years, as the Doba basin oil project in southern Chad accelerates. The Exxon Mobil-led project will pump oil from reserves in Chad through an underground pipeline to coastal Cameroon, where it will be loaded onto tankers. Following a crucial World Bank financing decision in June 2000, the Doba project officially began its construction phase in October 2000. Between 2000 and 2003, an American-led consortium invested $3.7 billion into the project, approximately $2 billion of which was invested in Chad. By the year 2003-04 the consortium planned to produce between 150,000 to 250,000 barrels of oil a day from three fields in southern Chad. The project is expected to provide between $80 and $100 million in annual government revenues during the 25-year production phase. However, despite this economic growth, some environmentalists and African NGOs fear that the project will lead to grave environmental damage and the dominance of the Chadian economy by foreign powers.

Diversification

In 2007, cotton and hydrocarbon industries accounted for well over 95% of the Chadian economy. Diversification of the economy into manufacturing industries remain a long-term issue.

References

See also

References

External links

Advertisements

Advertisements






Got something to say? Make a comment.
Your name
Your email address
Message