Recent Developments & Prospects
Economic Cooperation, Regional Integration & Trade
Economic & Political Governance
Public Sector Management, Institutions & Reform
Natural Resource Management & Environment
Thematic analysis: Structural transformation and natural resources
Author: Claude N’Kodia, Ali Madaï Boukar
- After a slowdown in 2013, growth picked up in 2014 (7.2%), and this trend could continue in 2015 thanks to the start of production at new oil fields.
- Chad is highly exposed to oil price fluctuations, so it needs to step up its budgetary consolidation efforts; its main social challenges, meanwhile, are linked to security crises and preparation of the electoral process.
- Implementation of spatial inclusion and structural transformation policies is essential, if Chad wishes to achieve economic emergence by 2030, in order to better develop its natural resources and meet many socioeconomic challenges.
Economic growth in Chad stood at 7.2% in 2014, according to estimates, and could reach 9% in 2015 due to the start of production at new oil fields. However, the current adverse conditions in the international oil market could squeeze oil revenue, which would mainly affect the non-oil sector due to falling public investment and shrinking domestic demand. The rate of inflation, estimated at 2.9% in 2014, complies with the community standard of 3% set in the convergence pact of the Central African Economic and Monetary Community.
The satisfactory results obtained in the implementation of the monetary agreement signed with the International Monetary Fund in July 2013 allowed Chad to enter into a programme of reforms supported by an Extended Credit Facility, approved on 1 August 2014. Its proper application, notably through the pursuit of budgetary consolidation efforts and the national development plan (Plan national de développement), should allow the country to reach the completion point of the Heavily Indebted Poor Countries initiative during the first semester of 2015.
Given the heavy dependence of the Chadian economy on oil, and with the country also facing the impact of the climate challenge, increasing its resilience in an unstable national and regional economic environment is a necessity. Undertaking actions aimed at achieving greater structural transformation and better spatial inclusion could contribute to building resilience through their positive effects on the country’s socioeconomic development and social cohesion.
Table 1: Macroeconomic indicators
|Real GDP growth||3.9||7.2||9||5|
|Real GDP per capita growth||0.9||4.2||6.1||2.1|
|Budget balance % GDP||-2.7||-5.6||-5.2||-4.1|
|Current account balance % GDP||-9.9||-9.3||-10||-9.2|
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.