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Chad vs. Central African Republic

Economy

ChadCentral African Republic
Economy - overview

Chad's landlocked location results in high transportation costs for imported goods and dependence on neighboring countries. Oil and agriculture are mainstays of Chad's economy. Oil provides about 60% of export revenues, while cotton, cattle, livestock, and gum arabic provide the bulk of Chad's non-oil export earnings. The services sector contributes less than one-third of GDP and has attracted foreign investment mostly through telecommunications and banking.

Nearly all of Chad's fuel is provided by one domestic refinery, and unanticipated shutdowns occasionally result in shortages. The country regulates the price of domestic fuel, providing an incentive for black market sales.

Although high oil prices and strong local harvests supported the economy in the past, low oil prices now stress Chad's fiscal position and have resulted in significant government cutbacks. Chad relies on foreign assistance and foreign capital for most of its public and private sector investment. Investment in Chad is difficult due to its limited infrastructure, lack of trained workers, extensive government bureaucracy, and corruption. Chad obtained a three-year extended credit facility from the IMF in 2014 and was granted debt relief under the Heavily Indebted Poor Countries Initiative in April 2015.

In 2018, economic policy will be driven by efforts that started in 2016 to reverse the recession and to repair damage to public finances and exports. The government is implementing an emergency action plan to counterbalance the drop in oil revenue and to diversify the economy. Chad's national development plan (NDP) cost just over $9 billion with a financing gap of $6.7 billion. The NDP emphasized the importance of private sector participation in Chad's development, as well as the need to improve the business environment, particularly in priority sectors such as mining and agriculture.

The Government of Chad reached a deal with Glencore and four other banks on the restructuring of a $1.45 billion oil-backed loan in February 2018, after a long negotiation. The new terms include an extension of the maturity to 2030 from 2022, a two-year grace period on principal repayments, and a lower interest rate of the London Inter-bank Offer Rate (Libor) plus 2% - down from Libor plus 7.5%. The original Glencore loan was to be repaid with crude oil assets, however, Chad's oil sales were hit by the downturn in the price of oil. Chad had secured a $312 million credit from the IMF in June 2017, but release of those funds hinged on restructuring the Glencore debt. Chad had already cut public spending to try to meet the terms of the IMF program, but that prompted strikes and protests in a country where nearly 40% of the population lives below the poverty line. Multinational partners, such as the African Development Bank, the EU, and the World Bank are likely to continue budget support in 2018, but Chad will remain at high debt risk, given its dependence on oil revenue and pressure to spend on subsidies and security.

Subsistence agriculture, together with forestry and mining, remains the backbone of the economy of the Central African Republic (CAR), with about 60% of the population living in outlying areas. The agricultural sector generates more than half of estimated GDP, although statistics are unreliable in the conflict-prone country. Timber and diamonds account for most export earnings, followed by cotton. Important constraints to economic development include the CAR's landlocked geography, poor transportation system, largely unskilled work force, and legacy of misdirected macroeconomic policies. Factional fighting between the government and its opponents remains a drag on economic revitalization. Distribution of income is highly unequal and grants from the international community can only partially meet humanitarian needs. CAR shares a common currency with the Central African Monetary Union. The currency is pegged to the Euro.

Since 2009, the IMF has worked closely with the government to institute reforms that have resulted in some improvement in budget transparency, but other problems remain. The government's additional spending in the run-up to the 2011 election worsened CAR's fiscal situation. In 2012, the World Bank approved $125 million in funding for transport infrastructure and regional trade, focused on the route between CAR's capital and the port of Douala in Cameroon. In July 2016, the IMF approved a three-year extended credit facility valued at $116 million; in mid-2017, the IMF completed a review of CAR's fiscal performance and broadly approved of the government's management, although issues with revenue collection, weak government capacity, and transparency remain. The World Bank in late 2016 approved a $20 million grant to restore basic fiscal management, improve transparency, and assist with economic recovery.

Participation in the Kimberley Process, a commitment to remove conflict diamonds from the global supply chain, led to a partially lifted the ban on diamond exports from CAR in 2015, but persistent insecurity is likely to constrain real GDP growth.

GDP (purchasing power parity)$25.19 billion (2019 est.)

$24.397 billion (2018 est.)

$23.832 billion (2017 est.)

note: data are in 2010 dollars
$4.483 billion (2019 est.)

$4.354 billion (2018 est.)

$4.195 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate-3.1% (2017 est.)

-6.4% (2016 est.)

1.8% (2015 est.)
4.3% (2017 est.)

4.5% (2016 est.)

4.8% (2015 est.)
GDP - per capita (PPP)$1,580 (2019 est.)

$1,576 (2018 est.)

$1,587 (2017 est.)

note: data are in 2010 dollars
$945 (2019 est.)

$933 (2018 est.)

$913 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 52.3% (2017 est.)

industry: 14.7% (2017 est.)

services: 33.1% (2017 est.)
agriculture: 43.2% (2017 est.)

industry: 16% (2017 est.)

services: 40.8% (2017 est.)
Population below poverty line42.3% (2018 est.)62% NA (2008 est.)
Household income or consumption by percentage sharelowest 10%: 2.6%

highest 10%: 30.8% (2003)
lowest 10%: 2.1%

highest 10%: 33% (2003)
Inflation rate (consumer prices)-0.9% (2019 est.)

4.2% (2018 est.)

-1.5% (2017 est.)
2.7% (2019 est.)

1.6% (2018 est.)

4.2% (2017 est.)
Labor force5.654 million (2017 est.)2.242 million (2017 est.)
Unemployment rate

NA

6.9% (2017 est.)
Distribution of family income - Gini index43.3 (2011 est.)43.6 (2003 est.)

61.3 (1993)
Budgetrevenues: 1.337 billion (2017 est.)

expenditures: 1.481 billion (2017 est.)
revenues: 282.9 million (2017 est.)

expenditures: 300.1 million (2017 est.)
Industriesoil, cotton textiles, brewing, natron (sodium carbonate), soap, cigarettes, construction materialsgold and diamond mining, logging, brewing, sugar refining
Industrial production growth rate-4% (2017 est.)3.9% (2017 est.)
Agriculture - productssorghum, groundnuts, millet, yams, cereals, sugar cane, beef, maize, cotton, cassavacassava, yams, groundnuts, taro, bananas, sugar cane, beef, maize, plantains, milk
Exports$2.464 billion (2017 est.)

$2.187 billion (2016 est.)
$113.7 million (2017 est.)

$101.5 million (2016 est.)
Exports - commoditiescrude petroleum, gold, livestock, sesame seeds, gum arabic, insect resins (2019)lumber, gold, diamonds, sea vessels, cocoa paste (2019)
Exports - partnersChina 32%, United Arab Emirates 21%, India 19%, United States 10%, France 6%, Germany 5% (2019)China 41%, United Arab Emirates 19%, France 7% (2019)
Imports$2.16 billion (2017 est.)

$1.997 billion (2016 est.)
$393.1 million (2017 est.)

$342.2 million (2016 est.)
Imports - commoditiesdelivery trucks, paints, packaged medicines, aircraft, broadcasting equipment (2019)refined petroleum, packaged medicines, natural gas, broadcasting equipment, second-hand clothing (2019)
Imports - partnersChina 29%, United Arab Emirates 16%, France 10%, United States 8%, India 5% (2019)India 18%, France 12%, United States 11%, China 9%, Netherlands 7%, Belgium 7%, Malta 6% (2019)
Debt - external$1.724 billion (31 December 2017 est.)

$1.281 billion (31 December 2016 est.)
$779.9 million (31 December 2017 est.)

$691.5 million (31 December 2016 est.)
Exchange ratesCooperation Financiere en Afrique Centrale francs (XAF) per US dollar -

605.3 (2017 est.)

593.01 (2016 est.)

593.01 (2015 est.)

591.45 (2014 est.)

494.42 (2013 est.)
Cooperation Financiere en Afrique Centrale francs (XAF) per US dollar -

605.3 (2017 est.)

593.01 (2016 est.)

593.01 (2015 est.)

591.45 (2014 est.)

494.42 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt52.5% of GDP (2017 est.)

52.4% of GDP (2016 est.)
52.9% of GDP (2017 est.)

56% of GDP (2016 est.)
Reserves of foreign exchange and gold$22.9 million (31 December 2017 est.)

$20.92 million (31 December 2016 est.)
$304.3 million (31 December 2017 est.)

$252.5 million (31 December 2016 est.)
Current Account Balance-$558 million (2017 est.)

-$926 million (2016 est.)
-$163 million (2017 est.)

-$97 million (2016 est.)
GDP (official exchange rate)$10.912 billion (2019 est.)$1.937 billion (2017 est.)
Ease of Doing Business Index scoresOverall score: 36.9 (2020)

Starting a Business score: 52.5 (2020)

Trading score: 37 (2020)

Enforcement score: 45.5 (2020)
Overall score: 35.6 (2020)

Starting a Business score: 63.2 (2020)

Trading score: 52.4 (2020)

Enforcement score: 31.4 (2020)
Taxes and other revenues13.5% (of GDP) (2017 est.)14.6% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-1.5% (of GDP) (2017 est.)-0.9% (of GDP) (2017 est.)
GDP - composition, by end usehousehold consumption: 75.1% (2017 est.)

government consumption: 4.4% (2017 est.)

investment in fixed capital: 24.1% (2017 est.)

investment in inventories: 0.7% (2017 est.)

exports of goods and services: 35.1% (2017 est.)

imports of goods and services: -39.4% (2017 est.)
household consumption: 95.3% (2017 est.)

government consumption: 8.5% (2017 est.)

investment in fixed capital: 13.7% (2017 est.)

investment in inventories: 0% (2017 est.)

exports of goods and services: 12% (2017 est.)

imports of goods and services: -29.5% (2017 est.)
Gross national saving15.5% of GDP (2017 est.)

7.5% of GDP (2016 est.)

13.3% of GDP (2015 est.)
5.4% of GDP (2017 est.)

8.2% of GDP (2016 est.)

4.2% of GDP (2015 est.)

Source: CIA Factbook