2013 Index of Economic Freedom

Chad

overall score45.2
world rank164
Rule of Law

Property Rights20.0

Freedom From Corruption20.0

Limited Government

Government Spending75.5

Fiscal Freedom50.4

Regulatory Efficiency

Business Freedom25.2

Labor Freedom40.5

Monetary Freedom74.6

Open Markets

Trade Freedom55.6

Investment Freedom50.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 10.5 million
  • GDP (PPP):
    • $19.5 billion
    • 1.6% growth
    • 2.9% 5-year compound annual growth
    • $1,865 per capita
  • Unemployment:
  • Inflation (CPI):
    • 1.9%
  • FDI Inflow:
    • $1.9 billion
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Chad’s economic freedom score is 45.2, making its economy the 164th freest in the 2013 Index. Its overall score is 0.4 point higher than last year, with improvements in half of the 10 economic freedoms including freedom from corruption and monetary freedom. Chad is ranked 41st out of 46 countries in the Sub-Saharan Africa region, and its overall score is lower than the regional average.

Chad lags far behind many other developing countries in terms of economic and human development. Despite recent efforts to diversify, it remains dependent on oil revenue and is subject to the volatility that this entails. Institutional support for economic freedom continues to be weak. The rule of law is poorly maintained, perpetuating systematic corruption and lax enforcement of property rights and undermining prospects for long-term economic development.

The government is largely ineffective, and oil-backed budget surpluses have allowed fiscal mismanagement to continue. Monetary stability has been helped by low inflation in recent years, but the state continues to interfere in the market for key goods through price controls.

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Background

President Idriss Deby, who seized power in 1990, was re-elected to a fourth term in March 2011 amid allegations of electoral fraud and vote tampering. Repeated reshufflings of the cabinet by Deby and Prime Minister Emmanuel Nadingar reflect the instability of the administration. Chad ranks 166th out of 167 countries on the Economist Intelligence Unit’s Democracy Index as one of the world’s least democratic countries. Due to recent terrorist activity in the Sahel, Deby has called on neighboring countries to set up a military task force to defend their borders. Conflict in eastern Chad and unrest in Sudan’s Darfur region have created hundreds of thousands of Chadian and Sudanese refugees. Over 80 percent of Chad’s people depend on subsistence agriculture, herding, and fishing. Oil revenues and investments in oil by American and Chinese companies have fueled economic growth, and oil now accounts for about half of GDP. Chad’s most important bilateral economic partnerships are with China and India.

Rule of LawView Methodology

Property Rights 20.0 Create a Graph using this measurement

Freedom From Corruption 20.0 Create a Graph using this measurement

Protection of private property is weak, and the rule of law remains uneven across the country. The constitution guarantees judicial independence, but most key judicial officials are named by the president and assumed to be subject to political influence. Despite a “Ministry of Morality” that conducts anti-corruption seminars for government employees, rampant corruption exists at all levels of government.

Limited GovernmentView Methodology

The top income tax rate is 60 percent, and the top corporate tax rate is 40 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden is equal to 5.2 percent of total domestic income. Government spending amounts to 28.6 percent of total domestic output, and public debt has reached over 30 percent of GDP. Improved oil revenue is expected to shore up recently shaky government finances.

Regulatory EfficiencyView Methodology

It takes longer than the world average of 30 days to start a company, and minimum capital requirements exceed three times the average level of annual income. Informal labor activity is widespread, and outmoded employment regulations hinder the development of a modern labor market. Most prices are determined in the market, but the state influences prices through state-owned enterprises and the regulation of key goods.

Open MarketsView Methodology

Tariffs are a significant source of government revenue. The trade-weighted average tariff rate is high at 14.7 percent, and myriad non-tariff barriers further weaken trade freedom. Although Chad allows foreign ownership and provides equal treatment to foreign investors, bureaucratic regulations remain serious impediments to new investment. The financial sector is underdeveloped, with domestic credit balances equivalent to less than 1 percent of GDP.

Country's Score Over Time

Bar Graph of Chad Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Chad to other economic country groups

Regional Ranking

rank country overall change
1Mauritius76.9-0.1
2Botswana70.61.0
3Rwanda64.1-0.8
4Cape Verde63.70.2
5Madagascar62-0.4
6South Africa61.8-0.9
7Ghana61.30.6
8Uganda61.1-0.8
9Namibia60.3-1.6
10Burkina Faso59.9-0.7
11The Gambia58.80.0
12Zambia58.70.4
13Tanzania57.90.9
14Gabon57.81.4
15Benin57.61.9
16Swaziland57.20.0
17Mali56.40.6
18Kenya55.9-1.6
19Senegal55.50.1
20Malawi55.3-1.1
21Nigeria55.1-1.2
22Mozambique 55-2.1
23Seychelles54.91.9
24Côte d'Ivoire 54.1-0.2
25Djibouti53.90.0
26Niger53.9-0.4
27Cameroon52.30.5
28Mauritania52.3-0.7
29Guinea51.20.4
30Guinea-Bissau51.11.0
31Central African Republic50.40.1
32Ethiopia49.4-2.6
33Liberia49.30.7
34Burundi490.9
35Togo48.80.5
36Sierra Leone48.3-0.8
37São Tomé and Príncipe 48-2.2
38Lesotho47.91.3
39Comoros47.51.8
40Angola47.30.6
41Chad45.20.4
42Republic of Congo 43.5-0.3
43Equatorial Guinea42.3-0.5
44Democratic Republic of Congo39.6-1.5
45Eritrea36.30.1
46Zimbabwe28.62.3
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