The Chad - Economy and Infrastructure

Economy and Infrastructure

The United Nations' Human Development Index ranks Chad as the seventh poorest country in the world, with 80% of the population living below the poverty line. The GDP (Purchasing power parity) per capita was estimated as US$1,600 in 2008. Chad is part of the Bank of Central African States, the Customs and Economic Union of Central Africa (UDEAC) and the Organization for the Harmonization of Business Law in Africa (OHADA). Its currency is the CFA franc. Years of civil war have scared away foreign investors; those who left Chad between 1979 and 1982 have only recently begun to regain confidence in the country's future. In 2000 major direct foreign investment in the oil sector began, boosting the country's economic prospects.

Over 80% of Chad's population relies on subsistence farming and livestock raising for its livelihood. The crops grown and the locations of herds are determined by the local climate. In the southernmost 10 percent of the territory lies the nation's most fertile cropland, with rich yields of sorghum and millet. In the Sahel only the hardier varieties of millet grow, and these with much lower yields than in the south. On the other hand, the Sahel is ideal pastureland for large herds of commercial cattle and for goats, sheep, donkeys and horses. The Sahara's scattered oases support only some dates and legumes.

Before the development of oil industry, cotton dominated industry and the labour market and accounted for approximately 80% of export earnings. Cotton remains a primary export, although exact figures are not available. Rehabilitation of Cotontchad, a major cotton company that suffered from a decline in world cotton prices, has been financed by France, the Netherlands, the European Union, and the International Bank for Reconstruction and Development (IBRD). The parastatal is now expected to be privatised.

ExxonMobil leads a consortium of Chevron and Petronas that has invested $3.7 billion to develop oil reserves estimated at one billion barrels in southern Chad. Oil production began in 2003 with the completion of a pipeline (financed in part by the World Bank) that links the southern oilfields to terminals on the Atlantic coast of Cameroon. As a condition of its assistance, the World Bank insisted that 80% of oil revenues be spent on development projects. In January 2006 the World Bank suspended its loan programme when the Chadian government passed laws reducing this amount. On July 14, 2006, the World Bank and Chad signed a memorandum of understanding under which the Government of Chad commits 70% of its spending to priority poverty reduction programmes.

Civil war crippled the development of transport infrastructure; in 1987, Chad had only 30 kilometres (19 mi) of paved roads. Successive road rehabilitation projects improved the network to 550 kilometres (340 mi) by 2004. Nevertheless, the road network is limited; roads are often unusable for several months of the year. With no railways of its own, Chad depends heavily on Cameroon's rail system for the transport of Chadian exports and imports to and from the seaport of Douala.

An international airport serves the capital and provides regular direct flights to Paris and several African cities. The telecommunication system is basic and expensive, with fixed telephone services provided by the state telephone company SotelTchad. Only 14,000 fixed telephone lines serve all of Chad, one of the lowest telephone density rates in the world. Chad's energy sector has suffered from years of mismanagement by the parastatal Chad Water and Electric Society (STEE), which provides power for 15% of the capital's citizens and covers only 1.5% of the national population. Most Chadians burn biomass fuels such as wood and animal manure for power. Chad's cities face serious difficulties of municipal infrastructure; only 48% of urban residents have access to potable water and only 2% to basic sanitation.

The country's television audience is limited to N'Djamena. The only television station is the state-owned TeleTchad. Radio has a far greater reach, with 13 private radio stations. Newspapers are limited in quantity and distribution, and circulation figures are small due to transportation costs, low literacy rates, and poverty. While the constitution defends liberty of expression, the government has regularly restricted this right, and at the end of 2006 began to enact a system of prior censorship on the media.