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Chad Economy
 
 
 

General

Landlocked Chad's economic development suffers from its geographic remoteness, drought, lack of infrastructure, and political turmoil. Over 80% of Chad's population relies on subsistence farming and livestock raising for its livelihood. The crops grown and the locations of herds are determined by the local climate. In the southernmost 10% of the territory lies the nation's most fertile cropland, with rich yields of sorghum and millet. In the Sahel only the hardier varieties of millet grow, and these with much lower yields than in the south. On the other hand, the Sahel is ideal pastureland for large herds of commercial cattle and for goats, sheep, donkeys and horses. The Sahara's scattered oases support only some dates and legumes.

Before the development of oil industry, cotton dominated industry and the labour market and accounted for approximately 80% of export earnings. Cotton remains a primary export, although exact figures are not available. Rehabilitation of Cotontchad, a major cotton company that suffered from a decline in world cotton prices, has been financed by France, the Netherlands, the European Union, and the International Bank for Reconstruction and Development (IBRD). The parastatal is now expected to be privatised.

ExxonMobil leads a consortium of Chevron and Petronas that has invested $3.7 billion to develop oil reserves estimated at one billion barrels in southern Chad. Oil production began in 2003 with the completion of a pipeline (financed in part by the World Bank) that links the southern oilfields to terminals on the Atlantic coast of Cameroon. As a condition of its assistance, the World Bank insisted that 80% of oil revenues be spent on development projects. In January 2006 the World Bank suspended its loan programme when the Chadian government passed laws reducing this amount. On 14 July 2006, the World Bank and Chad signed a memorandum of understanding under which the Government of Chad commits 70% of its spending to priority poverty reduction programmes.

The United Nations' Human Development Index ranks Chad as the seventh poorest country in the world, with 80% of the population living below the poverty line. The GDP (Purchasing power parity) per capita was estimated as $1,600 in 2008. Chad is part of the Bank of Central African States, the Customs and Economic Union of Central Africa (UDEAC) and the Organization for the Harmonization of Business Law in Africa (OHADA). Years of civil war have scared away foreign investors; those who left Chad between 1979 and 1982 have only recently begun to regain confidence in the country's future. In 2000, major direct foreign investment in the oil sector began, boosting the country's economic prospects.

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.

Overview

Economy - overview :
Chad's primarily agricultural economy will continue to be boosted by major foreign direct investment projects in the oil sector that began in 2000. At least 80% of Chad's population relies on subsistence farming and livestock raising for its livelihood. Chad's economy has long been handicapped by its landlocked position, high energy costs, and a history of instability. Chad relies on foreign assistance and foreign capital for most public and private sector investment projects. A consortium led by two US companies has been investing $3.7 billion to develop oil reserves – estimated at 1 billion barrels – in southern Chad. Chinese companies are also expanding exploration efforts and are currently building a 300-km pipeline and the country's first refinery. The nation's total oil reserves are estimated at 1.5 billion barrels. Oil production came on stream in late 2003. Chad began to export oil in 2004. Cotton, cattle, and gum arabic provide the bulk of Chad's non-oil export earnings.

GDP (purchasing power parity) :
$17.36 billion (2010 est.)


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