2014 Index of Economic Freedom

Chad

overall score44.5
world rank167
Rule of Law

Property Rights20.0

Freedom From Corruption15.9

Limited Government

Government Spending80.0

Fiscal Freedom46.2

Regulatory Efficiency

Business Freedom24.9

Labor Freedom43.3

Monetary Freedom69.8

Open Markets

Trade Freedom55.2

Investment Freedom50.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 10.7 million
  • GDP (PPP):
    • $20.7 billion
    • 5.0% growth
    • 3.7% 5-year compound annual growth
    • $1,924 per capita
  • Unemployment:
  • Inflation (CPI):
    • 7.7%
  • FDI Inflow:
    • $323.5 million
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Chad’s economic freedom score is 44.5, making its economy the 167th freest in the 2014 Index. Its overall score is 0.7 point lower than last year, with substantial deteriorations in freedom from corruption, fiscal freedom, 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.

Over the 20-year history of the Index, Chad’s economic freedom has been largely stagnant. Despite notable score improvements in the areas of open markets measured by trade freedom, investment freedom, and financial freedom, the country’s overall gain has been largely offset by declines in business freedom, the management of government spending, and property rights. In the absence of lasting progress toward greater economic freedom, Chad remains one of the economically “repressed” countries in the Index.

The government is largely ineffective, but the state continues to interfere in the market for key goods through price controls. Poor maintenance of the rule of law perpetuates systemic corruption and lax enforcement of property rights and undermines prospects for long-term economic development.

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Background

President Idriss Déby, who seized power in 1990, won a fourth term in 2011 in a highly dubious election. Due to recent terrorist activity in the Sahel, Chad sent a task force to Mali to help secure the northern half of the country from Tuareg separatists and al-Qaeda–linked groups. In May 2013, state security forces foiled a developing coup. Conflict in eastern Chad and unrest in Sudan’s Darfur region have generated hundreds of thousands of internally displaced Chadian and Sudanese refugees in the country. Over 80 percent of Chad’s people depend on subsistence agriculture, herding, and fishing. Oil revenues and investments by American and Chinese companies have fueled recent economic growth, and oil 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 15.9 Create a Graph using this measurement

Corruption is rampant within President Déby’s inner circle, who siphon off the nation’s oil wealth. The rule of law and the judicial system remain weak, and the courts are heavily influenced by the political leadership. The constitution guarantees judicial independence, but most key judicial officials are named by the president. Protection of private property is weak, and fraud is common in property transactions.

Limited GovernmentView Methodology

The top individual income tax rate has increased to 60 percent, and the top corporate tax rate has risen to 45 percent. Other taxes include a value-added tax (VAT) and a property tax. Overall, the tax burden is 5.1 percent of GDP. Government expenditures have been steady at around 26 percent of the domestic economy, and public debt is 35 percent of GDP.

Regulatory EfficiencyView Methodology

Progress in improving the inefficient business framework has been slow and uneven. Although burdensome labor regulations are not generally enforced, the labor market remains poorly developed. Most of the population remains employed outside of the formal sector, primarily in agriculture. The state subsidizes retail fuel prices and such public enterprises as electricity, water and cotton companies, an oil refinery, and a tractor assembly plant.

Open MarketsView Methodology

Chad’s average tariff rate is 14.9 percent. As with other members of the Central African Economic and Monetary Community, it may take weeks to import cargo. There are few formal barriers to foreign investment, but state-owned enterprises operate in several sectors of the economy. Poor access to credit hinders private-sector growth. The banking system remains highly dependent on the government and state-owned companies.

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
1Mauritius76.5-0.4
2Botswana721.4
3Cape Verde66.12.4
4Rwanda64.70.6
5Ghana64.22.9
6South Africa62.50.7
7Madagascar61.7-0.3
8Swaziland61.24.0
9Zambia60.41.7
10Uganda59.9-1.2
11The Gambia59.50.7
12Namibia59.4-0.9
13Burkina Faso58.9-1.0
14Gabon57.80.0
15Tanzania57.8-0.1
16Côte d'Ivoire 57.73.6
17Kenya57.11.2
18Benin57.1-0.5
19Seychelles56.21.3
20Djibouti55.92.0
21Mali55.5-0.9
22Malawi55.40.1
23Senegal55.4-0.1
24Niger55.11.2
25Mozambique 550.0
26Nigeria54.3-0.8
27Guinea53.52.3
28Mauritania53.20.9
29Cameroon52.60.3
30Liberia52.43.1
31Burundi51.42.4
32Comoros51.43.9
33Guinea-Bissau51.30.2
34Sierra Leone50.52.2
35Ethiopia500.6
36Togo49.91.1
37Lesotho49.51.6
38São Tomé and Príncipe 48.80.8
39Angola47.70.4
40Central African Republic46.7-3.7
41Chad44.5-0.7
42Equatorial Guinea44.42.1
43Republic of Congo 43.70.2
44Democratic Republic of Congo40.61.0
45Eritrea38.52.2
46Zimbabwe35.56.9
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