2022 Investment Climate Statements: Chad

Policies Towards Foreign Direct Investment

The GOC’s policies towards foreign direct investment (FDI) are generally positive. Chad’s laws and regulations encourage FDI, and there are few formal restrictions on foreign trade and investment. Under Chadian law, foreign and domestic entities may establish and own business enterprises.

The National Investment Charter of 2008 permits full foreign ownership of companies in Chad. The only limit on foreign control is on ownership of companies deemed related to national security. The National Investment Charter guarantees both foreign companies and individuals equal standing with Chadian companies and individuals in the privatization process. In principle, tenders for foreign investment in state-owned enterprises (SOEs) and for government contracts are conducted through open international bid procedures. The National Investment Charter also offers incentives to certain foreign companies establishing significant operations in Chad, including up to five years of tax-exempt status.

Chad’s National Agency for Investment and Exports (ANIE, Agence Nationale des Investissements et des Exports), an agency of the Ministry of Industrial and Commercial Development & Private Sector Promotion, facilitates foreign investment. ANIE’s mandate is to contribute to the creation of a business environment that meets international standing, promote investment and exports, support the development of SMEs, and inform GOC decision makers about economic policy. ANIE acts as a one-stop shop for new investors.

Chad has demonstrated few signs of prioritizing investment retention or maintaining an ongoing dialogue with investors, such as through a formal business roundtable or Ombudsman. The Presidential Council for Improving the Investment Climate has met only twice since its 2021 establishment and is still working to clarify its work plan.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign ownership or control. There are no sector-specific restrictions that discriminate against market access for U.S. or other foreign investors, and no de facto anti-foreign discriminatory practices. In terms of investment screening mechanisms, the government reviews potential investment projects in a holistic and project-by-project way but has not made public any fixed criteria or standardized methodology.

Other Investment Policy Reviews

UNCTAD published a French-language Investment Policy Review (IPR) on Chad in July 2019 ( https://investmentpolicy.unctad.org/publications/1212/investment-policy-review-of-chad ).

The World Trade Organization (WTO) published a joint trade policy review for Chad, Cameroon, Republic of Congo, Gabon, and Central African Republic in 2013 ( https://www.wto.org/english/tratop_e/tpr_e/tp385_e.htm ), and a standalone trade policy review for Chad in 2007 ( https://www.wto.org/english/tratop_e/tpr_e/tp275_e.htm ).

The OECD has not published any investment policy reviews of Chad.

Civil society groups have not shared useful reviews of investment policy-related concerns, though many Chadians at large have voiced concern about the negative effects of Chad’s onerous and lethargic tourist visa process as dissuading potential foreign investment, compared to other countries which boast inexpensive, hassle-free visas on arrival. To date, the government has shown little interest in addressing this common complaint. A Chamber of Commerce does exist, though has published little information regarding policy-related investment concerns.

Business Facilitation

Foreign businesses interested in investing in or establishing an office in Chad should contact ANIE, which offers a one-stop shop for filing the legal forms needed to start a business. The process officially takes 72 hours and is the most important legal requirement for investment. ANIE’s website ( www.anie-tchad.com ) provides additional information. An easy step to facilitate business (that the government has not taken) would be completing online business registration via the Global Enterprise Registration web site ( www.GER.co ) and the Business Facilitation Program ( www.businessfacilitation.org ). The World Bank estimated in 2019 that it took, on average, 58 days to start a business in Chad.

Contracts are tailored to each investment and often include additional incentives and concessions, such as permissions to import labor or agreements to work with specific local suppliers. Some contracts are confidential. Occasionally, government ministries attempt to change the terms of contracts or apply new laws broadly, even to companies that have pre-existing agreements that exempt them. Chad’s judicial system is weak, and rulings, including those relating to contract disputes, are susceptible to government interference. There is limited capacity within the judiciary to address commercial issues, including contract disputes. Frivolous lawsuits are expensive and difficult to resolve. Parties usually settle disputes directly or through arbitration provided by the Chamber of Commerce, Industry, Agriculture, Mining, and Crafts (CCIAMA) or through an outside entity, such as the International Chamber of Commerce (ICC) in Paris.

Outward Investment

The GOC does not offer any programs or incentives encouraging outward investment. The GOC does not restrict domestic investors from investing abroad.

Chad does not have a bilateral investment treaty (BIT) with the United States. Chad has signed bilateral investment treaties with Benin, Burkina Faso, China, Egypt, Germany, Guinea, Italy, Lebanon, Mali, Mauritius, Morocco, Qatar, and Switzerland, and Turkey. According to the United Nations Conference on Trade and Investment (UNCTAD), only the treaties with Germany, Italy, and Switzerland are in force.

Chad is not one of the twenty countries with a free trade agreement (FTA) with the United States but is eligible for tariff exemptions under the African Growth and Opportunity Act (AGOA). The bulk of Chad’s total exports under AGOA is crude oil. Chad is eligible for the Special Rule for Apparel.

Chad does not have a bilateral taxation treaty with the United States. Chad is not a member of the 141 countries that form the OECD Inclusive Framework on Base Erosion and Profit Shifting, nor the Inclusive Framework’s 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

Transparency of the Regulatory System

Chad implements laws to foster competition and establish clear rules based on Uniform Acts produced by the Organization for the Harmonization of Business Law in Africa (OHADA, Organisation pour l’Harmonisation en Afrique du Droit des Affaires, www.ohada.com ). However, certain Chadian and foreign companies may encounter difficulties from well-established companies with a corner on the market, discouraging competition.

Regulations and financial policies generally do not impede competition in the financial sector. Legal, regulatory, and accounting systems pertaining to banking are transparent and consistent with international norms. Chad began using OHADA’s accounting system in 2002, bringing its national standards into harmony with accounting systems throughout the region. Several international accounting firms have offices in Chad. However, while accounting, legal, and regulatory procedures are consistent with international norms, some local firms do not use generally accepted standards and procedures in their business practices.

Chad develops forward regulatory plans to encourage foreign investment and budget support. Government ministries draft regulations, subject to approval by the Secretary General of the Government, Council of Ministers, National Assembly, and President. National regulations are most relevant to foreign investors. There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. The GOC occasionally provides opportunities for local associations, such as the National Council of Employers (CNPT, Conseil National du Patronat Tchadien) or the CCIAMA to comment on proposed laws and regulations pertaining to investment. All contracts and practices are subject to legal review, which can be weak.

The government publishes all budget information, including on the Ministry of Finance and Budget website. Other proposed laws and regulations are not published in draft form for public comment. The Observatory on Public Finance is an online framework for the dissemination of public finance data and the operationalization of the Code of Transparency and Good Governance. This code is an implementation of one of the six CEMAC directives on the December 2011 harmonized framework for public financial management that set 2020 as its goal for complete implementation.

The Presidential Council to Improve the Business Climate was announced in 2018, met once in late 2019, and formally launched in January 2021 due to the negative impact of COVID-19 in 2020. This effort to reform Chad’s investment climate and improve Chad’s performance in World Bank assessments is still in its embryonic stage.

The government has not registered Chad on UNCTAD’s website for helping governments simplify, digitize, and automate administrative procedures, www.businessfacilitation.org , despite the website’s ability to be customized for any procedure or level of government without changing any of its laws. To date, the government has not promoted or required companies environmental, social, and governance (ESG) disclosure to facilitate transparency and/or help investors and consumers distinguish between the quality of potential investments.

While the government publishes both its general budget and a simplified “citizen” budget to the website of the Ministry of Finance and Budget and to the Observatory on Public Finance website, it does not allow transparency into its debt obligations, including explicit and contingent liabilities.

International Regulatory Considerations

Chad has been a member of the WTO since October 19, 1996, and a member of GATT since July 12, 1963. Chad is a member of OHADA and the CEMAC ( www.cemac.int ). Since 2017, Chad is gradually implementing business and economic laws and regulations based on CEMAC standards and OHADA Uniform Acts. Chad’s banking sector is regulated by COBAC (Commission Bancaire de l’Afrique Centrale), a regional agency.

Legal System and Judicial Independence

Chad’s legal system and commercial law are based on the French Civil Code which gives rise to the proliferation of frivolous lawsuits and judicial abuse by corrupt authorities. The constitution recognizes customary and traditional law if it does not interfere with public order or constitutional rights. Chad’s judicial system, which often lacks access to printed versions of Chad’s own laws, rules on commercial disputes in a limited technical capacity. Courts normally award monetary judgments in local currency, although it may designate awards in foreign currencies based on the circumstances of the disputed transaction. Historically, the Chadian President appointed judges without National Assembly confirmation, and thus the judiciary may have been subject to executive influence. Following the April 2021 establishment of the Transitional Military Council, its members appointed 93 members to an interim legislative body known as the Transitional National Council (CNT). Many Chadian civil society groups criticized the CNT’s appointment, rather than popular election, as well as its makeup as disproportionately reflecting individuals aligned with former President Deby, and for resulting perceptions of a lack of neutrality.

Chad’s commercial laws are based on standards promulgated by CEMAC, OHADA, and the Economic Community of Central African States (CEEAC, Communaute Economique des Etats de l’Afrique Centrale, http://www.ceeac-eccas.org ). The government is in the process of adopting legislation to comply fully with all these provisions.

Specialized commercial tribunal courts were authorized in 1998 and operationalized in 2004. These tribunals exist in five major cities but lack adequate technical capacity to perform their duties. Firms not satisfied with judgments in these tribunals may appeal to OHADA’s regional court in Abidjan, Cote d’Ivoire, that ensures uniformity and consistent legal interpretations across its member countries. Several Chadian companies have done so. OHADA also allows foreign companies to utilize tribunals outside of Chad, generally in Paris, France, to adjudicate business disputes. Finally, CEMAC established a regional court in N’Djamena in 2001 to hear business disputes, but this body is not widely used.

Contracts and investment agreements can stipulate arbitration procedures and jurisdictions for settlement of disputes. If both parties agree, and settlements do not violate Chadian law, Chadian courts uphold the decision of the court in the nation where an agreement was signed, such as the United States. This principle also applies to disputes between foreign companies and the Chadian Government. The International Chamber of Commerce (ICC) can arbitrate such disputes and foreign companies frequently choose to include clauses in their contract to mandate ICC arbitration.

Bilateral judicial cooperation is in effect between Chad and certain nations. Chad signed the Antananarivo Convention in 1970, covering the discharge of judicial decisions and serving of legal documents, with eleven other former French colonies (Benin, Burkina Faso, Cameroon, CAR, Congo-Brazzaville, Gabon, Cote d’Ivoire, Madagascar, Mauritania, Niger, and Senegal). Chad has similar arrangements in place with France, Nigeria, and Sudan.

Laws and Regulations on Foreign Direct Investment

The National Investment Charter encourages foreign direct investment. Chad is a member of CEMAC and OHADA. Since 2017, Chad has gradually implemented business and economic laws and regulations based on CEMAC standards and OHADA Uniform Acts.

Foreign investors using the court system are not generally subject to executive interference. In addition, the OHADA Treaty allows foreign companies to utilize tribunals outside of Chad, e.g., the International Chamber of Commerce (ICC) in Paris, France, to adjudicate any disputes. Companies may also access the OHADA’s court located in Abidjan, Ivory Coast.

Foreign businesses interested in investing in or establishing an office in Chad should contact ANIE, which offers a one-stop shop for filing the legal forms needed to start a business. The process officially takes 72 hours and is the most important legal requirement for investment. ANIE’s website ( www.anie-tchad.com ) provides additional information.

Competition and Antitrust Laws

Regulation of competition is covered by the OHADA Uniform Acts that form the basis for Chadian business and economic laws and regulations. The Office of Competition in Chad’s Ministry of Industrial and Commercial Development & Private Sector Promotion reviews transactions for competition-related concerns.

Expropriation and Compensation

Chadian law protects businesses from nationalization and expropriation, except in cases where expropriation is in the public interest. There were no direct government expropriations of foreign-owned property in 2021, though the government maintains indirect expropriation measures, such as a confiscatory tax regime that boasts the third-highest corporate tax rate in the world. There are no indications that the GOC intends to directly expropriate foreign property in the near term, though foreign businesses have reported difficulty repatriating profits from Chadian bank accounts and the open-source reporting indicates that the Chadian government has demanded an extralegal multi-million dollar exit payment from a large multinational.

Historically, a 1967 Land Law has prohibited since its passage the deprivation of ownership without due process, stipulating that the state may not take possession of expropriated properties until 15 days after the payment of compensation. While the government continues to work on reform of the 1967 Land Law, the May 2018 constitution (amended in December 2020), prohibited in its Article 45 the seizure of private property, except in cases of urgent public need — of which there are no known cases. The transitional government’s constitutional charter, which came into place in April 2021 upon the dissolution of Chad’s constitution by the Transitional Military Council, likewise prohibits expropriation outside the framework of the law in its Article 26, though without inclusion of “public utility” or “fair and prior compensation” that were present in the 2018 document.

Dispute Settlement

ICSID Convention and New York Convention

Chad has been a signatory and contracting state of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”) since 1966.

Chad is not one of the 169 contracting states of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Arbitration Convention”). Throughout 2021, multiple multinational companies reported government authorities repeatedly ignored for several years requests for resolution of overdue amounts, with the legally obligated amounts ranging into the millions of dollars.

Investor-State Dispute Settlement

Chad is signatory to an investment agreement among the member states of CEMAC, CEAC, 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, e.g., the Chadian Treasury, and provides for the enforcement of foreign arbitral awards. Chad has no Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with an investment chapter with the United States.

There is no formal record of the government’s handling of investment disputes. Some U.S. and other foreign investors have been involved in disputes with the GOC, particularly over issues regarding taxes and duties, though there are no official statistics. Investment disputes involving foreign investors are frequently arbitrated by an independent body.

International Commercial Arbitration and Foreign Courts

In addition to independent courts, such as the International Chamber of Commerce (ICC), Chad’s constitution recognizes customary and traditional law as long as it does not interfere with public order or constitutional rights. As most businesses operate in the informal sector, customary and traditional law function as alternative dispute resolution (ADR) mechanisms when parties are from the same tribe or clan and express their desire to settle outside of the formal court. To its credit, the Chadian central government dissolved the creation by a traditional court of a death payment agreement that many viewed to promote impunity for homicide, in violation of constitutional rights.

Specialized commercial tribunal courts were authorized in 1998 and became operational in 2004. These tribunals exist in five major cities but lack adequate capacity to perform their duties. The N’Djamena Commercial Tribunal has heard disputes involving foreign companies.

Foreign investors using the court system are not generally subject to executive interference. In addition, the OHADA Treaty allows foreign companies to utilize tribunals outside of Chad, e.g., the ICC in Paris, France, to adjudicate any disputes. Companies may also access OHADA’s court located in Abidjan, Ivory Coast.

Bankruptcy Regulations

Chad’s bankruptcy laws are based on OHADA Uniform Acts. According to Section 3, Articles 234 – 239 of OHADA’s Uniform Insolvency Act, creditors and equity shareholders may designate trustees to lodge complaints or claims to the commercial court collectively or individually. The OHADA provisions grant Chad the discretion to apply its own sentences.

Investment Incentives

The Chadian tax code (CGI, Code General des Impôts) offers incentives to new business start-ups, new activities, or substantial extensions of existing activities. Eligible economic activities are limited to the industrial, mining, agricultural, forestry, and real estate sectors, and may not compete with existing enterprises already operating in a satisfactory manner (Articles 16 and 118 of the National Investment Charter).

To spur investment into target sectors, the GOC authorized tax credits, discounts, and exemptions for investments in the agriculture, animal husbandry, solar and wind energy, information technology, oil, and plastics sectors in the 2021 Finance Law.

Foreign investors may ask the GOC for other incentives through investment-specific negotiations. Large companies usually sign separate agreements with the government, which contain negotiated incentives and obligations. The possibility of special tax exemptions exists for some public procurement contracts, and a preferential tax regime applies to contractors and sub-contractors for major oil projects. The government occasionally offers lower license fees in addition to ad hoc tax exemptions. Incentives tend to increase with the size of a given investment, its potential for job creation, and the location of the investment, with rural development being a GOC priority. Investors may address inquiries about possible incentives directly to the Ministry of Industrial and Commercial Development and Private Sector Promotion.

The GOC does not issue guarantees but jointly finances some foreign direct investments, with mixed results.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are currently no foreign trade zones in Chad. The Chadian Agency for Investment and Exportation (ANIE) is examining the possibility of creating a duty-free zone. The United Nations Conference on Trade and Investment (UNCTAD) estimated in 2014 that Chad received less than one percent of Foreign Direct Investment (FDI) to Africa. There are no Special Economic Zones and none currently planned. Given poor infrastructure, lack of port access, and high cost of air transport (especially for relatively heavy agricultural or livestock products that result from the large percentage of the unskilled population employed in those industries), Chad’s non-oil exports have historically been extremely limited. Intra-African trade is no different; UNCTAD estimates that Chad accounts for 0.2 percent of intra-African exports (the lowest on the continent).

Performance and Data Localization Requirements

Chad does not follow forced localization, the policy in which foreign investors must use domestic content in goods or technology.

Foreign companies are legally required to employ Chadian nationals for 98 percent of their staff. Firms can formally apply for permission from the Labor Promotion Office (ONAPE) to employ more than two percent expatriates if they can demonstrate that skilled local workers are not available. Most foreign firms operating in Chad have obtained these permissions. Foreign workers require work permits in Chad, renewable annually. Companies must present personnel files of local candidates not hired to the GOC for comparison against the profiles of foreign workers. Multinational companies and international non-governmental organizations routinely protest these measures.

There are no requirements for foreign IT providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software or turn over keys for encryption). There are no rules on maintaining a certain amount of data storage within Chad.

Real Property

The Chadian Civil Code protects property rights. Since 2013, landowners may register land titles with the One-Stop Land Titling Office (Guichet Unique pour les Affaires Foncieres). However, enforcement of these rights is difficult because most landowners do not have a title or a deed for their property. In 2022, an effort by the Food and Agricultural Organization of the United Nations (FAO) to advise the government on a more systematic framework to approach property issues marked the first major effort in many years to address property rights conflicts.

The office of Domain and Registration (Direction de Domaine et Enregistrement) in the Ministry of Finance and Budget is responsible for recording property deeds and mortgages. In practice, this office asserts authority only in urban areas; rural property titles are managed by traditional leaders who apply customary law. Chadian courts frequently deal with cases of multiple or conflicting titles to the same property. A significant portion of the legal system’s bandwidth is involved in ongoing land disputes. In cases of multiple titles, the earliest title issued usually has precedence. Fraud is common in property transactions. By law, all land for which no title exists is owned by the government and can only be given to a separate entity by presidential decree. There have been incidents in which the government has reclaimed land for which individuals held titles, which government officials then granted to other individuals without the backing of presidential decrees.

The GOC does not provide clear definitions and protections of traditional use rights of indigenous peoples, tribes, or farmers.

Intellectual Property 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.

Within the ministry responsible for trade, the Department of Industrial Property and Technology addresses intellectual property rights (IPR) issues. This department is the National Liaison Unit (SNL) within the OAPI and is the designated point of contact under Article 69 of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Intellectual property violations are widespread. Counterfeit pharmaceuticals and pirated artistic works, such as music and films, are common in Chad. Imported counterfeit watches, athletic apparel, footwear, denim jeans, cosmetics, perfumes, and other goods are also readily available. Despite limited resources, Chadian customs officials make occasional efforts to enforce copyright laws, normally by seizing and burning counterfeit medicines, CDs, and mobile phones, though the government does not regularly track or report on seizures of counterfeit goods or on prosecution of IPR violations. Occasionally, Chadian authorities will, however, announce such a seizure in the local press. Customs officers have the authority to seize and destroy counterfeit goods ex officio. The government pays for storage and destruction of such goods. In 2021, the government did not enact any new intellectual policy laws or regulations.

Chad is not listed on the United States Trade Representative (USTR) Special 301 Report or Notorious Markets List. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

Chad’s financial system is underdeveloped. There are no capital markets or money markets in Chad. A limited number of financial instruments are available to the private sector, including letters of credit, short- and medium-term loans, foreign exchange services, and long-term savings instruments. Chad maintains an exchange system that is free from restrictions and multiple currency practices on payments and transfers for current international transactions. This includes due to any actions delegated to BEAC.

Commercial banks offer credit on market terms, often at rates of 12 to 25 percent for short-term loans. Access to credit is available but is prohibitively expensive for most Chadians in the private sector. Medium-term loans are difficult to obtain, as lending criteria are rigid. Most large businesses maintain accounts with foreign banks and borrow money outside of Chad. There are ATMs in some major hotels, most neighborhoods of N’Djamena, the N’Djamena airport, and in major cities.

Chad does not have a stock market and has no effective regulatory system to encourage or facilitate portfolio investments. A small regional stock exchange, known as the Central African Stock Exchange, in Libreville, Gabon, was established by CEMAC countries in 2006. Cameroon, a CEMAC member, launched its own market in 2005. Both exchanges are poorly capitalized.

Money and Banking System

Chad’s banking sector is small and continues to streamline lending practices and reduce the volume of bad debt accumulated before and during the 2016-2017 economic crisis. While Chad’s banking rate remains low due to low aggregate savings and limited trust in and exposure to banks, according to the World Bank it increased from nine to 22 percent between 2009 and 2017.

Chad’s four largest banks have been privatized. The former Banque Internationale pour l’Afrique au Tchad (BIAT) became a part of Togo-based Ecobank; the former Banque Tchadienne de Credit et de Depôt was re-organized as the Societe Generale Tchad; the former Financial Bank became part of Togo-based Orabank; and the former Banque de Developpement du Tchad (BDT) was reorganized as Commercial Bank Tchad (CBT), in partnership with Cameroon-based Commercial Bank of Cameroon. There are two Libyan banks in Chad, BCC (formerly Banque Libyenne) and BSCIC (Banque Sahelo-Saharienne pour l’Investissement et le Commerce), along with one Nigerian bank — United Bank for Africa (UBA). In 2018, the GOC funded a new bank Banque de l’Habitat du Tchad (BHT) with the GOC as majority shareholder with 50 percent of the shares and two public companies, the National Social Insurance Fund (Caisse Nationale de Prevoyance Sociale, CNPS) and the Chadian Petroleum Company (Societe des Hydrocarbures du Tchad, SHT), each holding 25 percent.

Chad, as a CEMAC member, shares a central bank with Cameroon, Central African Republic, Republic of Congo, Equatorial Guinea, and Gabon — the Central African Economic Bank (BEAC, Banque des Etats de l’Afrique Centrale), headquartered in Yaounde, Cameroon.

Foreigners must establish legal residency in order to establish a bank account.

Foreign Exchange and Remittances

Foreign Exchange

The BEAC implemented foreign exchange regulation in 2019 that required full repatriation of export earnings and centralizing foreign currency holdings with the BEAC, though extractive industry companies received an exemption through December 2021.

The government does not restrict converting funds associated with an investment (including remittances of investment capital, earnings, loan repayments, lease payments, royalties) into a freely usable currency at legal market-clearing rates. There are currently no restrictions on repatriating these funds, although there are some limits associated with transferring funds. Individuals transferring funds exceeding $1,000 USD must document the source and purpose of the transfer with the local sending bank. Transactions of $10,000 USD or more for individuals and $50,000 USD or more for companies are automatically notified to the COBAC. Companies and individuals transferring more than $800,000 USD out of Chad need BEAC authorization to do so. Authorization may take up to three working days. To request authorization for a transfer, companies and individuals must submit contact information for the sender and recipient, a delivery timetable, and proof of the sender’s identity. Approvals are routine, although the Central Bank has occasionally temporarily restricted capital outflows. Businesses can obtain advance approval for regular money transfers.

Chad is a member of the African Financial Community (CFA) and uses the Central African CFA Franc (FCFA) as its currency. The FCFA is pegged to the Euro at a fixed rate of one Euro to 655.957 FCFA exactly (100 FCFA = 0.152449 Euro). There are no official restrictions on obtaining foreign exchange, but in practice foreign exchange can be difficult to acquire.

Remittance Policies

There are no recent changes to or plans to change investment remittance policies. There are no time limitations on remittances, dividends, returns on investment, interest, and principal on private foreign debt, lease payments, royalties, or management fees.

Chad does not engage in currency manipulation.

Chad is a member state of the Action Group against Money Laundering in Central Africa (GABAC), which is in the process of becoming a Financial Action Task Force (FATF)-style regional body. On the national level, the National Financial Investigation Agency (ANIF) has implemented GABAC recommendations to prevent money laundering and terrorist financing.

Sovereign Wealth Funds

The GOC does not maintain a Sovereign Wealth Fund.

All Chadian SOEs operate under the umbrella of government ministries. SOE senior management reports to the minister responsible for the relevant sector, as well as a board of directors and an executive board. Historically, the president appointed members of SOE boards of directors, executive boards, and CEOs though no new appointments have happened since the April 2021 establishment of the Transitional Military Council. The boards of directors give general directives over the year, while the executive boards manage general guidelines set by the boards of directors. Some executive directors consult with their respective ministries before making business decisions.

The GOC operates SOEs in several sectors, including Energy and Environmental Industries; Agribusiness; Construction, Building and Heavy Equipment; and Information and Communication. The percentage of their annual budget that SOEs allocate to research and development (R&D) is unpublished.

There were no reports of discriminatory action taken by SOEs against the interests of foreign investors in 2021. Some foreign companies operated in direct competition with SOEs. Chad’s Public Tender Code (PTC) provides preferential treatment for domestic competitors, including SOEs.

SOEs are not subject to the same tax burden and tax rebate policies as their private sector competitors and are often afforded material advantages such as preferential access to land and raw materials. SOEs receive government subsidies under the national budget, which the government does not publish. SOEs often comingle government and SOE funds, which complicates their financial picture.

Chad is not a party to the Agreement on Government Procurement within the framework of the WTO. Chadian practices are not consistent with the OECD Guidelines on Corporate Governance for SOEs.

(Please use DOC key words for industries in this section; list available at https://www.export.gov/industries ).

Privatization Program

Foreign investors are permitted and encouraged to participate in the privatization process. There is a public, non-discriminatory bidding process. Having a local contact in Chad to assist with the bidding process is important. To combat corruption, the GOC has recently hired private international companies to oversee the bidding process for government tenders. The Chamber of Commerce submitted a ‘white paper’ (livre blanc) in 2018 with recommendations for the GOC to facilitate and simplify private sector operations, including establishing a Business Observatory and a Presidential Council, which would implement over 70 recommendations to improve the investment climate in Chad. The Presidential Council became operational in January 2021.

The GOC has expressed general willingness to privatize its generally unprofitable SOEs, including to foreign investors. As an example, in 2018, it sold a majority stake in cotton export company CotonTchad Société Nouvelle (CotonTchad SN) to the Singaporean Olam International. Qatari investors recently purchased a slaughterhouse in Moundou as well. Investors from the UAE are under talks to purchase a slaughterhouse in Farcha, though their progress has stalled.

Chad is considering privatization in the following industries:

• Information & Communication (SOTEL Tchad)
• Food Processing & Packaging (the Société Tchadienne de Jus de Fruit (STJF), which produces fruit juice in Doba
• Agricultural Products (Société Moderne de Abbatoires (SMA), a slaughterhouse and meat packaging company in Farcha)

In addition, a 2019 law opened the market for power generation to private companies, though involvement in transmission remains under the control of the state-owned Societe Nationale d’Electricite du Tchad (SNE), which is reportedly unprofitable.

There is a general awareness of Responsible Business Conduct (RBC) among firms in Chad. Most Western firms operating in Chad adhere to RBC, particularly those in the petroleum and telecommunications sectors. For example, Esso Exploration and Production Chad, Inc. (EEPCI), a significant oil producer, has implemented Environmental Management Plans (EMPs), prioritizing hiring local residents and local purchase of goods and services, establishing international safety standards, and protecting biodiversity. A critical part of EMP has been the Land Use Management Action Plan (LUMAP) that compensates individuals and communities for land used by the project. LUMAP has distributed approximately $1.7 million in cash, in-kind goods, and training. EMP’s efforts are complemented by the ExxonMobil Foundation, which supports projects to improve girls’ education and fight malaria.

Many foreign firms commit to extensive skill-building of local staff, purchasing local goods, and donating excess equipment to charities or local governments. Internet companies Airtel and Moov, as well as some banks, continue to engage in RBC focused on public awareness campaigns countering violent extremism and promoting social cohesion.

While work safety and environmental protection regulations exist, the government does not always enforce them, and companies do not always adhere to them. There are several local NGOs, particularly in the southern oil-producing regions, which monitor safety and environmental protection in the oil sector, and which have held government and private companies publicly accountable. EEPCI adheres to U.S. Occupational Safety and Health Administration (OSHA) guidelines for recording accidents and injuries and implements a rigorous program of safety procedures and protocols.

Chad joined the Extractive Industries Transparency Initiative (EITI) in 2010. While private security companies do operate within Chad, they typically employ unarmed guards at private residences and business premises.

Department of State

• Country Reports on Human Rights Practices ()
• Trafficking in Persons Report ()
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ()

Department of Labor

• Findings on the Worst Forms of Child Labor Report ( )
• List of Goods Produced by Child Labor or Forced Labor ()
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ()
• Comply Chain ()

Climate Issues

In concert with the UNDP, the government maintains the Chad National Adaptation Plan Advancement Project, which is anchored to the Chadian Vision 2030. This plan intends to integrate climate change adaptation into medium- and long-term planning and budgeting of climate-sensitive sectors to support Chad in achieving its nationally determined contribution (NDC) to the Paris Agreement. Given its overall lack of development, Chad, even on an income-adjusted basis, is not a significant source of greenhouse gas emissions in absolute, relative, or cumulative terms and currently boasts one of the world’s most efficient and sustainable resource use patterns.

Nevertheless, Chad is one of the world’s most vulnerable countries to the adverse effects of climate change and its landlocked climate is dominated by increasing desertification. While the government has not introduced any policies to reach net-zero carbon emissions by 2050, in 2015 it did develop its nationally determined contribution to global efforts to reduce greenhouse gas emissions and strengthen resilience to climate change. Chad’s NDC focuses on the water, agriculture/agroforestry, livestock, and fisheries sectors. The government is currently planning for an unconditional reduction of 18.2% of its emissions by 2030 compared to a 2018 baseline, and a conditional reduction of 71% of the country’s emissions by 2030, though no fossil fuel phase-out is in place.

Currently, no regulatory incentives exist to achieve policy outcomes that preserve biodiversity, clean air, or other desirable ecological benefits. The only renewable incentive policy current in available is import tax and VAT exemptions for renewable energy equipment. In terms of government policies that preserve biodiversity, clean air, or other desirable ecological benefits, the government has evidenced a growing commitment to these issues through its signing of an October 2017 Memorandum of Understanding with the successful conservation organization, African Parks, for the management of the 30,693 km2 Greater Zakouma Ecosystem, which includes Zakouma National Park and Siniak Minia Wildlife Reserve. This expanded management agreement allows African Parks to draw on their deep conservation experience across Africa to cover 13,000 km2 of the Bahr-Salamat area and 10,000 km2 of adjoining wildlife corridors. Africa Parks has been instrumental in protecting and promoting biodiversity, clean air, and other desirable ecological benefits through its having practically eliminated widespread elephant poaching and catalyzed a rise in Zakouma’s elephant population for the first time in decades. The government has recognized African Parks’ important contribution to Chad’s future, and enthusiastically support African Parks plans to complete infrastructure, ranger training, as well as socio-economic studies and mapping of the Greater Zakouma Ecosystem.

Climate change risks are not being integrated into development activities or investment decisions such as the government’s budget allocations and public procurement policies do not currently include environmental or green growth considerations such as resource efficiency, pollution abatement, or climate resilience. This is principally due to the weak institutional capacity of policymakers to extract or use climate, socioeconomic, and environmental data in decision-making.

Foreign investors should be aware that corruption is endemic in Chad and constitutes a significant deterrent to nearly all economic activity, including foreign direct investment. Corruption is pervasive in many areas of government, including procurement, the awarding of licenses or concessions, dispute settlement, regulation enforcement, customs, and taxation.

Chad is not a signatory country of the UN Convention Against Corruption (UNCAC). Chad is not a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“the OECD Anti-Bribery Convention”).

There is an independent Court of Auditors (Cour des Comptes), equivalent to a supreme audit institution (SAI), to enhance independent oversight of government decisions, although its members are nominated by presidential decree. Concurrently, the GOC created a General Inspectorate for State Control within the Presidency to oversee government accountability. No reports have been published, however. In addition to these bodies, prior to the April 2021 dissolution of the National Assembly, its Finance Committee had carried out verifications of the GOC’s annual financial statement though typically did not make audits publicly available. The creation of the transitional legislature’s (CNT) Commission Controle Budget Automone is currently expected to carry out a similar responsibility, though, to date, they have not published any verifications of the GOC’s annual financial statement.

A February 2000 anti-corruption law stipulates penalties for corruption. The law does not single out family members and political parties. As in many other developing countries, weak institutional capacity, a widespread and largely accepted practice of rent seeking, low salaries for most civil servants, judicial employees, and law enforcement officials, have contributed to pervasive corruption in Chad. According to Freedom House’s Freedom in the World 2021 report, selective prosecutions of high-level officials were widely viewed as efforts to discredit those posing a threat to the former president or his allies. The report stated that security forces routinely stopped citizens on pretexts of minor traffic violations to extort money or confiscate goods.

To fight corruption and embezzlement, the Ministry of Finance and Budget set up a toll-free number (700), though it has not been working since 2018, after less than a full calendar year of connectivity. According to the Minister of Finance and Budget, the toll-free number 700 was designed to allow members of the public to alert the Inspectorate General of Finance to denounce any member of government who directly or indirectly solicits a bribe related their official duties, such as regarding administrative documents or tax payments. As of April 2022, the ministry confirms that they rely on postal mail for the lodging of these complaints and have no clear date for reestablishment of the compliant line. In addition to an unworking complaint line, there are no specific laws to counter conflict of interest, nor does the GOC require or encourage private companies to establish internal codes of conduct prohibiting bribery of public officials.

Local NGO Center for Studies and Research on Governance, Extractive Industries, and Sustainable Development (CERGIED), formerly GRAMP-TC (Groupe Alternatif de Recherche et de Monitoring de Petrole – Tchad), tracks government expenditures of oil revenue. There are no indications that anti-corruption laws are enforced differently for foreign investors than for Chadian citizens. There is no specific protection for NGOs involved in investigating corruption, which, to avoid repercussions, results in self-censorship of complaints about corrupt officials.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

Inspection Generale d’Etat
Ministry of Finance and Budget
Presidence de la Republique
Ndjamena, Chad

Contact at a “watchdog” organization:

Gilbert Maoundonodji
Coordinator
CERGIED (formerly GRAMP –TC)
BP 4021, N’Djamena, Chad
+235 6058 2016

infos@cergied.org  / secretariat@cergied.org  / https://cergied.org/ 

Chad enjoyed relative political stability from 2010 to April 2021, when armed groups entered from Libya and engaged in armed hostilities with Chadian government forces following the government’s announcement of former President Idriss Déby having won a sixth term. During this incursion, Deby, who had ruled the country since 1990, was killed. A group of 15 generals called the Transitional Military Council, with former President Deby’s son Mahamat Deby at the head, dissolved Chad’s constitution and legislative National Assembly in favor of a constitutional charter and interim legislature (Transitional National Council, CNT) based on an 18-month mandate. During these 18 months, set to end in October 2022, the government plans to hold a National Dialogue in May on a range of social, economic, political, and security issues pertinent to the country to inform the drafting of a new constitution to be adopted by referendum a possible pre-election census, and parliamentary and presidential elections to return to civilian-led government. Following the creation of the transitional government, Chad has entered a period of tenuous peace as the government engages in negotiations with armed political groups over their possible terms for participation in the May National Dialogue as well as disarmament, demobilization, and reintegration (DDR) into Chadian society. Cross-border intercommunal violence near neighboring Darfur threatens to hamstring the prospect of a lasting peace, as do widespread frustrations over poor socio-economic conditions and impunity for excessive use of force by government security forces.

Prior to July 2021, the government typically denied permits for demonstrations or suppressed them using tear gas while arresting participants and organizers. Since then, the transitional government has allowed limited protests in N’Djamena while insisting on rigid adherence to pre-approved routes with occasional use of tear gas to disperse protestors. On the other hand, state security forces outside N’Djamena repressed public demonstrations, including live ammunition that resulted in fatalities, to quell political dissent. In December 2021, in northern Chad’s city of Faya, government forces used live ammunition to disperse protestors frustrated with changes in customs procedures, reportedly resulting in one fatality. In January, in the eastern city of Abeche, government security forces violently confronted protestors frustrated with appointment of traditional official, leaving a reported 14 dead and 64 wounded. There were no reports of politically motivated damage to investment projects and/or installations in recent years, including during incursions by armed groups into Chad in 2008 and 2021.

While Chad, which depends on oil for nearly 80 percent of its export revenues, has faced the stresses of an extended period of reduced oil revenues, recent increases in oil prices have begun to alleviate this issue. The COVID-19 pandemic, despite a low estimated incidence rate in Chad, strains Chad’s limited medical infrastructure, disrupts trade routes with neighboring countries, and complicates international air travel.

Regional violent extremist organizations threaten regional stability and foreign investments along the Lake Chad Basin and. Armed non-governmental groups operate along the Libyan border in northern Chad. Violent attacks by Boko Haram have choked off vital trade routes with Nigeria and the road between N’Djamena and Douala, Cameroon, the principal port serving Chad. This has increased costs for imports and decreased exports.

U.S. businesses and organizations in Chad are welcome to inquire at the Embassy about joining the Overseas Security Advisory Committee (OSAC).

For up-to-date information on political and security conditions in Chad, please refer to the Consular Affairs Bureau’s Travel Warning and Country Specific Information at http://www.travel.state.gov. The Embassy encourages all U.S. Citizens in Chad to enroll online with the Smart Traveler Enrollment (STEP) program or with the Embassy upon arrival to receive the latest safety and security updates via email.

Chad’s population demonstrates a significant youth bulge, leading to widespread youth unemployment.

While some government ministries and SOEs provide job-related training to their employees, Chad has a shortage of skilled labor in most sectors and, at best, a nascent pipeline of human resource development to address this need. Local universities produce a surplus of graduates able to fill entry-level management and administrative positions though jobs in Chad’s anemic formal sector remain scarce. Skilled workers even more rare. Thus, given rampant unemployment and underemployment, approximately 80 percent of the Chadian labor force survive in the informal sector, despite the economic output of these primarily subsistence activities of farming, herding, and fishing accounting for only roughly 35 percent of GDP.

The International Labor Organization (ILO) reports that Chad has managed, compared to its average share of non-agricultural informal economy employment average from 1990-1999, to reduce this average by nearly five percentage points compared to the 2010-2014 period.

As a result, unskilled and day laborers are readily available and motivated, but frequently uneducated; Chad’s literacy rate is approximately 22 percent. While few Chadians speak English, translators and interpreters are available. Chad has never been an attractive destination for regular labor migration given widespread poverty, poor infrastructure, and a weak economy, though northeastern gold mines have reportedly drawn some migrant workers, often en route to Libya or Europe from the Horn of Africa region.

Significant gender inequality exists in Chad, as social norms have historically limited most women to the home and early marriages are common. Access to modern family planning methods is scant, which contributes to a leaky pipeline of women into the workforce as expectations of child-rearing tasks following unplanned pregnancies often impel their exit from the labor force. This results in approximately 50 percent of women participating in Chad’s workforce in some way, compared to approximately 75 percent of men. The government has recognized this as an issue, and taken some minor steps to address it, such as mandating 30 percent women for the transitional government’s interim legislature (CNT).

Same-sex activity became illegal in Chad via a March 2017 update to its penal code #2017-01, whose. Article 354 stipulated penalties of three months to two years in prison plus 50,000 to 500,000 CFA. The lack of social protections and widespread homophobia result in widespread self-censorship of full expression of identity by underrepresented workers, such as lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI+) individuals. As a result, little data exists regarding their participation in the labor market. More broadly, given entrenched patronage networks and their obstruction of the development of a meritocratic, rather than a connections- or ethnic-based system of hiring, individuals not connected to the Zaghawa group of former president Deby are underrepresented in government and military positions, especially at senior levels.

Child labor remains a problem. Children were involved in the following sectors: street begging in urban centers, street work as hawkers and porters, carpentry, vehicle garages, gold mining in the north of the country, service industries such as waiters/waitresses, and as domestic workers. Child labor is common in the agriculture sector. Children are also involved in cattle-herding and charcoal production. In some regions, children are involved in catching, smoking, and selling fish. Chadian cattle are included on the U.S. Government’s List of Goods Produced by Child Labor or Forced Labor.

Chad has ratified all eight Fundamental Conventions of the International Labor Organization. International labor rights such as freedom of association, the elimination of forced labor, child labor, employment discrimination, minimum wage, occupational safety and health, and weekly work hours are recognized within the labor code. However, significant gaps remain in law and practice. Chadian labor law derives from French law and tends to provide strong protection for Chadian workers; priority is given to Chadian nationals; foreign investors cite these provisions as unproductive and wearisome, especially for termination of underperforming employees. Labor unions operate independently from the government and, in fact, often challenge the government. The two main labor federations, the Confederation Libre des Travailleurs du Tchad (CLTT) and the Union des Syndicats du Tchad (UST), to which most individual unions belong, are the most influential.

The labor court is the labor dispute mechanism in Chad. In case of a dispute, the aggrieved party contacts a labor inspector directly or through the labor union to settle the dispute or lodge a complaint with the labor court.

Labor unions practice collective bargaining, and the labor code monitors labor abuses, health, and safety standards in low-wage assembly operations. The enforcement of the code is not effectively conducted; most disputes are based on contract termination. The GOC did not pass any new labor laws in 2021.

The GOC may provide incentives for foreign businesses but does not waive laws to attract or retain investment. Companies report constant frustration with ambiguous and archaic French-based labor law and its outsized worker-based provisions making any reductions in their workforce extremely difficult and often quite expensive, even following in cases of well-documented flagrant misconduct or criminality, to say nothing of employers merely adjusting employment to respond to fluctuating market conditions. Companies are often forced to settle frivolous lawsuits out of pocket sometimes based, in part, on pressure by corrupt judicial officials looking to exploit legal technicalities for personal gain. The law mandates severance packages for all employees whose employment ends, and larger packages for those who are laid off for reasons out of their control than for those fired for cause. No unemployment insurance or other social safety net programs exist, nor has the public received notice about discussions having happened regarding the possible implementation in the future of such programs.

Beginning in summer, the national teacher’s union went on strike, demanding unpaid compensation and calling for an improved learning environment at different universities throughout the country, including the southern city of Moundou, the eastern city of Abeche, and in N’Djamena. They also called for payment of salaries, bonuses, and overtime arrears.

Throughout the latter half of 2021, workers at ExxonMobil’s Doba oilfield participated in a labor strike after the company announced it was in talks with Savannah Energy to sell its interests in the project. The workers demanded pre-sale compensation and their strike caused ExxonMobil to temporarily decrease production. ExxonMobil actively engaged in discussions with the workers and the government to resolve the dispute, which lasted for months.

Chad is eligible for DFC programs and services. There is one active DFC project in Chad — Finlux ELLEN Sarl — for the distribution and maintenance of solar home kits and appliances for off-grid electrification. This project received 10,000,000 USD in financing. The U.S. Overseas Private Investment Corporation (OPIC) has also provided political risk investment insurance to U.S. companies in Chad.

Chad is a member of the Multilateral Investment Guarantee Agency (MIGA). The French investment guarantee agency Compagnie Française d’Assurance pour le Commerce Exterieur (COFACE) has also guaranteed several investments in Chad.

Table 3: Sources and Destination of FDI
Data not available.

Economic and Commercial Officer
U.S. Embassy N’Djamena
Rondpoint Chagoua BP 413
N’Djamena Chad
+235 2251-5017 Ext 24408 and 24289
NDjamena-Commercial@state.gov