Chad's economy is characterized by a large primary sector dominated by the oil sector, an embryonic secondary sector and a tertiary sector, which employs around 20% of the active population. The country joined the ranks of oil-producing countries in 2003 and since then its economy has been heavily dependent on oil. The country’s previously agrarian economy saw per capita GDP grow from about $497 in 2001-2002 (which was less than half of the average in Sub-Saharan Africa) to around $823 in 2017 . After two years of a deep recession caused by the drop in oil prices, the economy showed signs of recovery in 2018. GDP grew by 3.2% in 2019 but is expected to due to the economic impact of the COVID-19 pandemic .
Agriculture is another dominating sector, contributing 44.9 % to the country’s GDP in 2018. Overall, 80 % of the population is engaged in smallholder farming and heavily relies on agriculture for food security and livelihoods. Therefore, concerns are rising about the effects of climate change including rising temperatures, reduced water availability and the occurrence of floods and other extreme weather events. Agricultural production in Chad is primarily subsistencebased and rainfed. The main staple crops are millet, sorghum,groundnuts, maize, dry beans and rice .
The country’s dependency on oil, make it hard for the shift to a greener economy.
Since 2003 and the start of oil exploitation, Chad has become very dependent on this resource, the weight of which, in total exports, was estimated at 78% on average over the period 2016-2018. After two years of recession in 2016 and 2017, following the fall in oil prices with a GDP decline of 6.4% and 2.4% respectively, the GDP growth rate became positive again, reaching 2.4% % in 2018 and 3.0% in 2019. With the onset of the COVID-19 pandemic, GDP contracted by 0.9% in 2020 (UN2020).
Key policies and governance approach
Chad has developed the three National Development Plans which could be linked to the willingness of developing the country’s economy. These plans will be implemented to accelerate structural transformation in society, governance and the rule of law, the economy and the environment.
Successes and remaining challenges
The Chadian Government does not yet fulfil its role with regard to governance, the provision of basic services, and development policy. Core elements of the national policy for growth and poverty reduction, including good governance and rural development, are not being implemented on a broad scale. Institutional government structures are extremely fragile, particularly in rural areas .
Initiatives and Development Plans
In 2017, the country has developed “Vision 2030, the Chad we want”, which reflects the will and decision of the Republic of Chad’s High Authorities to meet the legitimate aspirations of the Chad people. It reflects the Government’s will and commitment to long term development. This is therefore a matter of stimulating the country’s development process, targeting development by 2030 through three National Development Plans (NDP 2017-2021, NDP 2022-2026 and NDP 2027-2030). These plans will be implemented to accelerate structural transformation in society, governance and the rule of law, the economy and the environment .
Two of the most ambitious plans of the country are the National Strategy for Combating Climate Change and the National Policy for Environment (2017). The projects considered by 2030 are mostly related to the power generation sector: examples are the construction of a 210 MW gas turbine power plant located in N’Gouri in the Province of Lakes, the inclusion of 2.2 MW of wind turbines and the implementation of improved drying ovens for the fishing sector savings of 30 to 40% in consumption of wood compared to a traditional oven for smoking fish.
In terms of energy efficiency, the action planned by the country is the distribution of 3,000,000 LED lamps with low energy consumption to homes as well as 100,000 LED light bulbs for offices.
Goals and Ambitions
Chad’s Vision 2030 is to be an emerging country with a middle-income economy, generated by diverse and sustainable growth sources and value adding activities . This vision is aligned to the main objective of its axis 4, which is to improve the living conditions of the population and reduce social inequalities while ensuring the preservation of natural resources and adaptation to climate change . Moreover the government has developed the National Development Plan 2017–2021, and adhered to the Africa Renewable Energy Initiative (AREI) launched by the African Union. The goal of this latter ambitious initiative is to:
- boost Africa’s renewable energy capacity by 10 GW by 2020 and by 300 GW by 2030,
- overhauling regulatory frameworks to mobilize investment,
- and engaging major capacity-building efforts by 2030.
- Continue to invest in building national capacity for responding to natural and other crises and disasters in order to mitigate the impact of crises on the development and well-being of the population.
- Continue to prioritize investment in the security sector and in peacebuilding, for sustainable development throughout Chad.
- Continue investing in new technologies to facilitate the implementation of programs
- Pursue investment in human capital as a factor of sustainable economic and social development.
- Strengthen institutional and community capacities for planning, monitoring and implementing interventions; (WB 2020)