Chad flag Chad: Economic and Political Overview

The economic context of Chad

Economic Indicators

Having been an oil-producing nation since 2003, Chad had grown highly reliant on this resource, shifting away from its previous agricultural-based economy. Despite the ongoing humanitarian crisis sparked by the war in Sudan, Chad's economy had been poised to achieve its strongest performance since 2014, with GDP growth projected at 4.1% in 2023. This growth had been driven by a 4.4% increase in oil production. Non-oil GDP had been expected to expand by 4.1% (compared to 2% in 2022), largely due to substantial public investment. Following the floods of 2022, the recovery of the agricultural sector had been anticipated to significantly contribute to growth, amounting to 1.6 percentage points (World Bank). In 2024, growth is projected to slow down to 2.7%, with non-oil GDP forecasted at 3.4%. This deceleration is attributed to an anticipated nearly 2% decrease in global oil prices and a decrease in public investment. Over the 2025-2026 timeframe, growth is expected to average 3.1% (0.1% per capita), with non-oil GDP growth estimated at 3.5% during the same period, according to the World Bank.

The significant budget surplus observed over the past two years, largely fueled by substantial oil revenues, is expected to persist in 2024. Public revenues should remain bolstered by the uptrend in global oil prices, alongside efforts to enhance revenue collection through tax legislation simplification and expanding the tax base. These measures align with the government's commitments to the IMF program, essential for disbursements under the Extended Credit Facility. However, the surplus is projected to decrease compared to 2023, attributed to elevated defense expenditures and continued substantial spending to address food insecurity (Coface). With the signing of a debt restructuring agreement in November 2022, public debt as a proportion of GDP is expected to continue declining (from 43.2% in 2023 to 34.9% by 2025, as per the IMF). The agreement facilitated the implementation of the Extended Credit Facility (ECF). Covering USD 3 billion of external debt, over a third of which is commercial debt owed predominantly to Glencore, a British-Swiss mining and commodities trading company, the agreement was secured despite challenges stemming from the diverse creditor base. Coupled with ECF disbursements, this agreement will mitigate the risk of over-indebtedness in 2024. Meanwhile, inflation was projected at 7% in 2023, but should halve in 2024 amid improved agricultural production.

Chad grapples with widespread poverty and vulnerability, with 42.3% of its population residing below the national poverty threshold. Extreme poverty, defined as living on less than USD 2.15 per day per capita, has also surged, increasing from 31.2% in 2018 to 34.9% in 2021 and 35.4% in 2023 (World Bank). Moreover, the formal unemployment rate in Chad has increased, adding to the predominantly informal and often underutilized workforce.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 16.4217.4918.7019.7020.78
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 9439761,0141,0391,066
General Government Gross Debt (in % of GDP) 35.935.132.331.430.5
Inflation Rate (%)
Current Account (billions USD) 0.88-0.43-0.43-0.59-0.64
Current Account (in % of GDP) 5.4-2.5-2.3-3.0-3.1

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Agriculture and livestock breeding are important economic activities that employ 62.9% of the population - most of them are engaged in subsistence farming. Overall, the primary sector accounts for 22.6% of Chad’s GDP (World Bank). Main crops grown are sorghum, millet, and berebere, with minor production of cotton, sugarcane and peanut. A vast part of Chad’s landscape is desert, and the country’s most fertile croplands (the areas with an average annual rainfall of 800 millimetres or more) are in the Soudanian, which accounts for about 10% of the total land area. The effects of the extraordinary flood occurred in 2022 negatively impacted the agricultural production of 2022/2023, which amounted to 2,798,642 tonnes, representing a decrease of 1.2% compared to the five-year average production.

The industrial sector contributes half of GDP and employs 10% of the active workforce. The petroleum sector dominates the economic activity – accounting for about 60% of export revenues - and attracts the bulk of foreign direct investments. Processing of cotton and cottonseed oil are other major industries. In an effort to diversify the economy and make it less dependent on global oil prices, the government of Chad has launched its national development plan (PND). However, high costs of energy and transport prevents the emergence of a robust industrial sector in the country. Overall, the manufacturing sector is estimated to contribute a mere 3% of GDP.

The services sector is estimated to account for 26.2% of Chad’s GDP and for 21% of total employment. While Chad has great potential for tourism, insecurity and infrastructure deficit have been hampering the sector’s growth. Chad's banking sector, characterized by limited size and service offerings, is currently comprised of ten operational commercial banks.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 68.9 9.7 21.4
Value Added (in % of GDP) 22.6 49.5 26.2
Value Added (Annual % Change) 2.0 4.1 0.7

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.

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Latest Update: April 2024