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Select Economic and Financial Indicators 2014 2015 2016 2017e 2018f
Real GDP (% change) 6.9 1.8 -6.4 0.6 2.4
GDP (USD bn) 14.0 11.0 10.1 9.7 10.1
Inflation (average) 1.7 6.8 -1.1 0.2 1.9
Fiscal Balance (% GDP) -4.2 -3.1 -2.0 1.7 1.5
Broad Money (% change, end period) 26.5 -4.7 -7.7 5.8 7.4
Population (mn) 13.6 14.0 14.5 14.9 15.4
Exports (USD bn) 4.4 2.9 2.5 3.2 3.4
Imports (USD bn) 6.2 4.7 4.0 4.1 4.3
Current Account Balance (% GDP) -8.9 -12.3 -9.2 -2.0 -2.8
FX Reserves (USD bn, end period) 1.4 0.4 0.0 0.0 0.1
Exchange Rate (average) 496.16 594.11 597.41 588.92 565.09
Oil production (mn bpd) 0.083 0.082 0.078 0.115 0.132
Sources: IMF, World Bank, UN, Bloomberg, Ecobank Research

Economic outlook

Economic outlook

Real GDP: Chad’s economy is forecast to continue its recovery in 2018, albeit at a moderate pace, due partly to a mild rebound in the price of oil (which accounts for close to 85% of Chad’s export revenue), alongside higher oil production levels. However, economic activity will be constrained as oil prices remain well below pre-crisis highs, and as security challenges continue (amid the government’s efforts to tackle against a terrorist insurgency). Security challenges and the weak (albeit improving) economic performance in neighbouring Nigeria will continue to subdue trading activity between the two economies, further constraining Chad’s growth outlook.

Inflation: Inflation is projected to accelerate in 2018 to around 2%, after Chad overcame deflation last year (the 2017 estimate for inflation is 0.2%, against -1.1% in 2016). The faster pace of price rises is in line with the expansion in domestic demand. Furthermore, disruptions to cross-border trade with Cameroon and Nigeria caused by the security situation will put intermittent pressures on the prices of goods imported from these countries. However, inflation will remain below the 3% regional convergence criterion as trends for global commodity imports remain moderate, and the XAF’s exchange rate peg to the EUR (which is expected to strengthen somewhat in 2018) continues to anchor imported prices.

Fiscal balance: The fiscal position is expected to remain positive with Chad forecast to maintain a budget surplus in 2018. This follows the reversal of a fiscal deficit of 2.0% of GDP in 2016 into a surplus of 1.7% of GDP in 2017, as improved oil receipts provided a boost to government revenue. Budgetary operations will be supported by continued efforts to implement IMF-advised reforms – in June 2017, Chad agreed a USD312mn, three-year IMF loan package, supplanting the previous USD110 deal effective since August 2014. The reforms seek to strengthen tax collection, rationalise spending (current expenditure is expected to be cut by 2.2%, after an estimated 1.5% trim in 2017), and improve public financial management. Alongside this, moderately improved oil prices, and budget support disbursements from donors (particularly from the AfDB, EU, IMF, World Bank, and France) should help to support a positive turnout. Nonetheless, a sharp rise in projected debt servicing costs, alongside continued counter-terrorism measures by the government, and the need to host hundreds of thousands of refugees and internally displaced persons affected by the insecurity, will contribute to fiscal pressures.

Current account: Developments in Chad’s current account balance will be influenced heavily by international oil price developments. As such, higher oil receipts, amid improved prices and increased domestic production, is expected to keep the current account deficit significantly smaller than in 2016 (9.2% of GDP). However, it is expected to widen from 2.0% of GDP recorded last year to just around 3.0% of GDP in 2018, amid higher import demand and lower budget support requirements compared to 2017.

Risks

The main risk revolve around the potential for the regional security situation to deteriorate once again; and for another collapse in global oil prices. Weather-related shocks would significantly disrupt pastoralism activity. Failure to make vital fiscal reforms would impede fiscal imposition, with knock-on effects on growth. Meanwhile, reliance upon donor support remains crucial and any weakening in the relationship will undermine the country’s economic prospect.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange Rate Structure

Regime Fixed
Target XAF655.957 to EUR1
Type of intervention Via Central Bank
Convertible currency? Partial
Market participants Corporate (24%); Interbank (32%); Local asset managers (12%); Insurance companies (2%); Foreign investors (3%); Others (27%)
Source: Bloomberg, IMF, and Ecobank Research

FX

FX Products Spot Forwards Non-deliverable Forwards Options Swaps
On offer Yes No No No No
Daily trading volume (USD mn) n/a n/a
Average trade size (USD mn) n/a
Average spread n/a
Trading hours 8.00-17.00
Settlement cycle T+2
FX Market Structure BEAC’s exchange regime is free of restrictions on payments and transfers for current international transactions, apart from restrictions maintaned for security.
Non-resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow No restrictions n/a
Financial flow
Resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow No restrictions n/a
Financial flow
Source: Bloomberg, IMF, and Ecobank Research

FI

Primary Market Treasury bills Treasury notes Treasury bonds Central Bank bills OMOs
Issuer Government n/a Government n/a
End use Government financing Government & infrastructure financing
Maturity structure 91- to 364-days 2- to 5-yrs
Coupon Zero Fixed
Coupon payments n/a Annual
Secondary Market  
Daily trading volume Limited trading n/a
Average trade size Limited trading
Settlement cycle n/a
Ecobank local affiliate contact details:
Ecobank Tchad, Avenue Charles de Gaulle, N’Djaména
Tel: +235 22 52 43 14 / 20 / 21
Source: Bloomberg, IMF, and Ecobank Research

FI Primary Market information

FI Primary Market information

Chad Debt 2014 2015 2016 2017e 2018f
Government debt (% GDP) 39.4 43.3 51.2 47.6 43.3
    Sub-Sahara average 44.5 52.6 56.1 55.6 55.8
External debt (official creditors, % GDP) 27.0 24.5 25.8 28.6 27.8
    Sub-Sahara average 25.5 30.2 31.9 32.9 33.2
External public debt stock (USD bn) 3.8 2.7 2.6 2.8 2.8
    Share of total sub-Sahara debt (%) 1.5 1.0 0.9 0.8 0.8
Source: IMF; Ecobank Research

Commodity and Trade Information

Commodity and Trade Information

Hydrocarbon & mineral production

Crude oil production started in Chad in 2003. The country produced about 120,000 bpd of crude oil in 2016, exporting over 90% of output owing to limited domestic consumption. Crude oil revenues account for over 75% of government revenue. Chad is home to the 20,000-bpd N’Djamena refinery, built in 2011 by the China National Petroleum Company (CNPC). The bulk of the refinery’s output is exported as Chad only consumes one tenth of its output. Operations at the refinery have been periodically disrupted by disputes between the Chinese operators and the government over environmental regulation, expatriate quotas and crude oil prices. Chad exports most of its crude oil through the Chad-Cameroon pipeline, which links Chad’s oil fields to Cameroon’s Atlantic coast pumping stations, for which Cameroon charges a fee of US$1.30 per barrel. The pipeline, which was sponsored by ExxonMobil, RoyalDutch Shell and Total, with the support of the World Bank, has shipped over 450mn barrels of oil since its completion in 2003.

Chad’s hard mineral sector is underdeveloped and the country’s potential resources are underexplored. Gold is the key mineral produced in Chad, with an estimated 5 tonnes exported in 2016 (all to the UAE). Small amounts of silver and limestone are also mined and exported. The country has known reserves of bauxite (aluminium ore), tin and tungsten (in the Tibesti mountains) and uranium (close to the border with Libya), which it is keen to exploit. The country produces around 200,000 tonnes of cement, primarily for domestic consumption.

Soft commodity production

Chad is a West Africa’s sixth-largest producer of cotton, with estimated output of 71,000 tonnes of cotton lint in 2016/17. The country’s cotton is prized by cotton traders for its superior quality. Unlike other West African origins, Chadian cotton is of extra-long fibre length (1 5/32 inch staple), which is used in the manufacture of high quality knit apparel. Chad is the world’s second largest producer of gum Arabic (which is mainly used as an emulsifier in soft drinks), after Sudan, with estimated output of 20,000 tonnes. However, given the fragmented nature of production and harvesting of the crop, a large proportion is smuggled into Sudan, distorting the country’s output. Most other agricultural production is of staple foods for domestic consumption, including an estimated 154,000 tonnes of milled rice in 2016. Chad is also a leading exporter of livestock to the sub-region.

Trade flows

Imports

Chad’s imports totalled US$576mn in 2016. Chad is dependent on imports of capital & consumer goods, and of industrial raw materials. The country imported machinery & vehicles worth US$95mn in 2016, along with US$54mn of pharmaceuticals, US$40mn of iron & steel, US$36mn of electronics and US$24mn of plastics, reflecting the underdevelopment of its local manufacturing sector. Chad imported an estimated US$33mn worth of cereal & flour in 2016, but official data do not capture the high volume of grains & cooking oils traded informally across the country.

Exports

Chad’s exports totalled US$1.7bn in 2016. Crude oil was Chad’s most valuable export, worth US$1.4bn in 2016, all of which was exported via the Chad-Cameroon pipeline, with the USA as the largest offtaker. Chad also exported gold worth US$167mn. The country’s leading agricultural exports were cotton, worth US$31mn, most of which went to India, Thailand and Portugal; sesame seed, worth US$24mn; and gum Arabic, worth US$23mn, most of which went to the USA and France for use in the soft drinks and prepared food industries. Chad trades large volumes of livestock with its neighbours, little of which are captured in official trade data.

  • Flag
  • Population
    15,353,184
  • Area
    1,284,000
  • Capital
    N'Djamena
  • Largest city
    N'Djamena
  • Official language
    Arabic, French
  • Major languages
    Sar
  • Currency
    Central African CFA Franc (XAF)

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