- GDP (PPP):
- $31.9 billion
- 3.0% growth
- -0.2% 5-year compound annual growth
- $1,645 per capita
- Inflation (CPI):
- FDI Inflow:
Chad’s economic freedom score is 50.4, making its economy the 158th freest in the 2021 Index. Its overall score has increased by 0.2 point, primarily because of an improvement in government integrity. Chad is ranked 38th among 47 countries in the Sub-Saharan Africa region, and its overall score is below the regional and world averages.
Chad’s economy has vacillated between mostly unfree and repressed for more than two decades. This year, it barely clung to the mostly unfree category. Chad is one of the world’s 25 poorest countries according to IMF data. Desperately needed major reforms to improve business freedom, property rights, judicial effectiveness, and the integrity of government seem unlikely to occur under the present government.
IMPACT OF COVID-19: As of December 1, 2020, 102 deaths had been attributed to the pandemic in Chad, and the economy was forecast to contract by 0.7 percent for the year.
A former French colony, Chad endured three decades of civil war and invasions before the restoration of peace in 1990. A rebellion in the northern part of the country flares up sporadically, and Chad remains at war with the Islamist terrorist group Boko Haram, which is based in neighboring Nigeria. President Idriss Déby seized power in 1990 and won a fifth term in 2016, touching off large protests. In 2018, a new constitution expanded presidential power and restored non-retroactive term limits, clearing the way for Déby to retain power until 2033. Landlocked Chad pays dearly for imported goods, and oil accounts for approximately 60 percent of export revenues. Cotton, cattle, livestock, and gum arabic account for the bulk of nonoil exports.
Although the Civil Code protects real property rights, enforcement is difficult because most landowners lack a title or a deed for their property, and the cost of property registration is high. The rule of law is weak. The judiciary lacks real independence and is subject to executive influence. Corruption, bribery, and nepotism are endemic and pervasive, especially in government procurement, customs, and tax collection.
The top individual income tax rate is 60 percent, and the top corporate tax rate is 45 percent. The overall tax burden equals 13.3 percent of total domestic income. Government spending has amounted to 14.2 percent of total output (GDP) over the past three years, and budget surpluses have averaged 0.5 percent of GDP. Public debt is equivalent to 44.2 percent of GDP.
Chad has lost ground in business freedom compared to other countries and has one of the world’s lowest business freedom scores. Child labor is a persistent problem, and 80 percent of labor occurs informally. The government maintains subsidies to inefficient state-owned enterprises, and the country’s economy remains distorted by heavily subsidized oil.
Chad has one preferential trade agreement in force. The trade-weighted average tariff rate is 14.0 percent, and nontariff barriers further impede trade. Openness to foreign investment remains severely constrained by institutional weakness. The high cost of credit and scarce access to financing deter private-sector development. A large part of the population remains outside of the formal banking sector.