2021 Index of Economic Freedom

Chad

OVERALL SCORE50.4
WORLD RANK158
Rule of Law

Property Rights27.7

Judicial Effectiveness25.0

Government Integrity21.0

Government Size

Tax Burden44.6

Government Spending93.9

Fiscal Health96.1

Regulatory Efficiency

Business Freedom25.3

Labor Freedom42.9

Monetary Freedom76.7

Open Markets

Trade Freedom52.0

Investment Freedom60.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 15.9 million
  • GDP (PPP):
    • $31.9 billion
    • 3.0% growth
    • -0.2% 5-year compound annual growth
    • $1,645 per capita
  • Unemployment:
    • 1.9%
  • Inflation (CPI):
    • -1.0%
  • FDI Inflow:
    • $566.6 million

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.

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Background

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.

Rule of LawView Methodology

Property Rights 27.7 Create a Graph using this measurement

Judicial Effectiveness 25.0 Create a Graph using this measurement

Government Integrity 21.0 Create a Graph using this measurement

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.

Government SizeView Methodology

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.

Regulatory EfficiencyView Methodology

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.

Open MarketsView Methodology

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.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
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