Investment Climate in Chad
Oil provides about 60% of export revenues while agriculture that includes cotton, cattle, livestock, and gum arabic provide the bulk of Chad’s non-oil export earnings. The services sector contributes about one-third of GDP and has attracted foreign investment mostly through telecommunications and banking. Chad became an oil-producing nation in 2003 with the completion of the Chad-Cameroon pipeline pipeline linking its oilfields to terminals on the Atlantic coast. The Government’s vision for 2025 is for Chad to be an emerging economy “driven by diversified and sustainable growth sources, creating value-added and jobs, and making sure that every Chadian citizen has appropriate access to core social services, decent housing, and suitable opportunities for skill training.”
Economic growth reached an estimated 4.1% in 2015, possibly falling to only 2.6% in 2016 due to the collapse in oil prices and a steep fall in export revenues.
The economy was running with an estimated inflation rate of 2.6% in 2016 from 3.6% in 2015 and 1.7% in 2014. The country achieved a real estimated GDP growth of -1.1% in 2016, 1.8% in 2015 and in 6.9% 2014.
Why invest in Chad?
Chad is currently politically stable and the economy is recovering. The government is focused on improving the investment climate.
Chad suffered political instability until 2009, but a dialogue between the presidential majority and the opposition began from 2006 led in 2007 to an agreement with a view to strengthening the democratic process. This agreement, for which the EU played an important role as a facilitator, was the basis for the legislative reform and the establishment of an electoral administration, which allowed elections to be held in 2011. On 2 April 2013, a political agreement protocol was signed by the political players (majority and opposition) and the representatives of civil society to create the National Framework for Political Dialogue that led to the launch of the new electoral cycle. The electoral process began with the enrolment of Chadians abroad, then those inside the country, by the Independent National Electoral Commission in 2015.The Presidential election occurred in April 2016 Incumbent President Idriss Déby of Patriotic Salvation Movement was re-elected for a fifth term.
Chad has an estimated 2015 population of 13.6 million people up from 10.3 million people estimated in 2009. The population is projected to reach 16.4 million people by 2020 with annual growth rate of 3.05%. The last census was done in 1993 and confirmed a population of 6.27 million.
Only 26% of the country’s people live in urban areas with almost half of the urban dwellers being under the age of 15.
Doing business in Chad
The highlights of World Bank score of doing business in Chad are summarised as follows;
|Topics||World Bank 2017 Rank||World Bank 2016 Rank||Change in Rank|
|Starting a Business||182||186||
|Dealing with Construction Permits||133||131||
|Protecting Minority Investors||158||157||
|Trading across Borders||171||170||
There are no time and value limitations on remittances of dividends, returns on investment, interest, and principal on private foreign debt, lease payments, royalties, or management fees.
Chad is signatory to an investment agreement among the member states of CEMAC, CEEAC, and OHADA. The OHADA Investment Arrangement, with provisions for securities, arbitration, dispute settlement, bankruptcy, recovery, and other aspects of commercial regulation, has defined the commercial rights of several economic stakeholders, for example the Chadian Treasury, and provides for the enforcement of foreign arbitral awards
Key development challenges
- Handling the regional spread of Boko Haram attacks;
- The drop in oil price given the economy’s strong dependence on oil revenue;
- limited infrastructure;
- lack of trained workers and
- Unreliable energy
Chad is number 159 least corrupt nation out of 175 countries and scored 20 points out of 100 according to the 2016 Corruption Perceptions Index reported by Transparency International. Chad has an anti-corruption legislation, the 004/PR/2000 Act, on economic crimes which criminalises active and passive bribery, embezzlement and influence peddling, among others
The regional violent extremist organizations pose significant threats to Chad. In 2015, Boko Haram conducted attacks on N’Djamena, and it continues to pose a serious regional security and economic threat. Chad’s political stability is therefore vulnerable due to heightened social tensions and a regional spread of Islamist activism and conflicts from neighbouring countries.
Unemployment and skilled labour
Chad has a shortage of skilled labour in most sectors due its weak education system with an estimated labour force of 5.268 million in 2015. The unemployment rate was estimated at 7% in 2014.
Attitude to Foreign Direct Investment
The government attitude towards foreign direct investment (FDI) is generally positive. There are few formal restrictions on foreign trade and investment. Since 2011, Chad’s foreign investment inflows have been increasing, largely due to investments in the oil sector.
Restrictions on Foreign investment
There are no limits on foreign ownership or control. Chad’s laws and regulations encourage FDI. The National Investment Charter of 2008, a set of guildelines promulgated by the National Agency for Investment and Exports (ANIE, Agence Nationale des Investissements et des Exports), located within the Ministry of Economy and Trade, offers incentives to foreign companies establishing operations in Chad, including up to five years of tax-exempt status. Under Chadian law, foreign and domestic entities may establish and own business enterprises. The National Investment Charter permits full foreign ownership of companies in Chad. The only limit on foreign control is on ownership of companies deemed to be related to national security. The National Investment Charter guarantees both foreign companies and individual’s equal standing with Chadian companies and individuals in the privatization process.
Intellectual Property (IP) Rights.
Chad is a member of the African Intellectual Property Organization (OAPI) and the World Intellectual Property Organization (WIPO). Chad ratified the revised Bangui Agreement (1999) in 2000 and the Berne Convention in 1971. The GOC adheres to OAPI rules within the constraints of its administrative capacity.
Chad’s national parks include Aouk National Park, Bahr Salamat Faunal Reserve, Goz Beïda National Park, Manda National Park and Zakouma National Park
Petroleum, natron, oil, gold, uranium, tungsten, tin, bauxite, iron ore, sand, gravel, kaolin and salt and titanium.
Investment Climate in Chad has been summarized to include the following;
Double Taxation Treaties of Chad
Exports of Chad
International Trade Agreements with Chad
Investment Guarantees in Chad
Investment Incentives in Chad
Investment Opportunities in Chad
Natural Resources of Chad
Trading Partners of Chad
Chad Stock Exchange