Chad is Africa’s fifth largest country by surface area, encompassing three bioclimatic zones. Chad is landlocked, bordering Libya to the north, Sudan to the east, Central African Republic (CAR) to the south, and Cameroon, Nigeria, and Niger to the west (with which it shares Lake Chad). The nearest port — Douala, Cameroon — is 1,700 km from the capital, N’Djamena. Chad is one of six countries that constitute the Central African Economic and Monetary Community (CEMAC), a common market. Chad’s human development is one of the lowest in the world according to the UN Human Development Index (HDI). Poverty afflicts a large proportion of the population.
The Government of Chad (GOC) actively solicits foreign investment, especially from North America. Opportunities for foreign investment exist in Agribusiness; Agricultural, Construction, Building & Heavy Equipment; Automotive & Ground Transportation; Education; Energy & Mining; Environmental Technologies; Food Processing & Packaging; Health Technologies; Information Technology; Industrial Equipment & Supplies; Information & Communication; and Services. Since oil production began in 2003, the petroleum sector has dominated economic activity and been the largest target of foreign investment, including from U.S. companies. Agriculture and livestock breeding are also important economic activities, employing most of the population. In recent years, the GOC has prioritized agriculture, solar energy production, gold mining, livestock breeding and processing, and information technology to diversify the economy and lessen fiscal dependence on volatile global energy markets.
Chad’s investment climate is challenging. Private sector development suffers from a lack of transport infrastructure, GDP growth, skilled labor, reliable electricity, adequate contract enforcement, good governance, and attractive tax rates. Frequent border closures with neighboring countries complicate trade. The COVID-19 pandemic, and associated restrictions, halted Chad’s modest 2019 economic recovery following several years of recession caused by low global oil prices and disruptive debt payments to Glencore. Overall vaccination rates remain low. Existing IMF and World Bank programs aim to improve governance, increase transparency, and reduce internal arrears. Private sector financing is limited, and low GDP growth constrains government investment. Corruption and historically frequent replacement of senior level government figures present further roadblocks, as does cumbersome French-based labor law. The GOC’s interest in maintaining a stake in investment projects, while facilitating access to key decision makers, also introduces financial and operational risks.
Despite these challenges, the success of several foreign investments into Chad illustrates opportunities for experienced, dedicated, and patient investors. Successful investors typically operate with trusted local partners. The oil sector will mark 20 years of operations in 2023. Singapore-based Olam International entered Chad’s cotton market in 2018. Mindful of the imperative to enact reforms, the GOC operationalized a Presidential Council to Improve the Business Climate in January 2021. With rich natural resources, minimally developed agriculture and meat processing sectors, ample sunshine, increasing telecommunications coverage, and a rapidly growing population, Chad presents an opportunity for targeted investment in key sectors.
|TI Corruption Perceptions Index||2022||164 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2021||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||N/A||N/A||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2020||$630||https://data.worldbank.org/indicator/NY.GNP.PCAP.CD|