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Chad’s Economy: Current State and Future Outlook

Population Distribution and Urbanization

The population distribution in Chad is closely linked to its physical geography and climate. The harsh dry climate in the north has very low population densities, while the southern regions with distinct rainfall seasons, forests, and perennial rivers are home to the vast majority of the population.

  • Population Distribution: The northern regions have very low population densities due to the harsh climate.
  • Urbanization: Urbanisation in Chad is expected to marginally increase from about 22.9% in 2019 to 26.2% by 2043.

Life Expectancy, Education, and Standards of Life

Low life expectancy, low levels of education, and low standards of life contribute to the stagnation of socio-economic growth within the country.

  • Life Expectancy: Low life expectancy is a major contributor to the stagnation of socio-economic growth.
  • Education: Low levels of education also hinder economic development.
  • Standards of Life: Low standards of life affect overall well-being and economic prospects.

Economic Outlook

Chad joined the ranks of oil-producing countries in 2003 and has been dependent on oil since. The country’s economy has been negatively impacted by a decline in world oil prices, although things have been improving since 2016.

  • Economic Size: The size of Chad’s economy was just over US$16 billion in 2019 and is forecast to reach only US$43.4 billion by 2043.
  • Oil Dependence: Chad’s economy remains heavily reliant on oil production.

GDP Per Capita

In 1990, Chad placed tenth among its low-income African peers in GDP per capita. The country has improved this position, ranking seventh in 2019 with a value of US$1,908. By 2043, Chad’s economy is expected to reach a GDP per capita of US$2,726.

  • GDP Per Capita: Chad’s GDP per capita has shown improvement over the years.
  • Future Outlook: The country is expected to continue improving its GDP per capita by 2043.

Informal Economy

There are no recent reliable statistics on the size of the informal economy, although a large majority of the population are considered to be involved in informal economic activities for their livelihoods. The World Bank estimated that among active workers, 79% of the poor rely on crops and/or livestock as their main source of income and another 14% work in the non-agricultural informal sector.

  • Informal Economy: A large majority of the population are involved in informal economic activities.
  • Impact: The informal economy affects the overall structure of Chad’s economy.

Structural Transformation

Chad exhibits a weak structural transformation in the contribution of various sectors to its GDP. The share of agriculture’s value-add to the GDP was 44% in 2019, indicating a high dependency on this sector. It is followed by services (typically low-value-added services) at 40.6% of GDP. Manufacturing only contributes 6% of the GDP and energy 5.4% of the GDP.

  • Structural Transformation: Chad’s economy has a weak structural transformation.
  • Sectoral Contribution: The country is heavily dependent on agriculture, followed by services.

Overall, Chad’s economy faces significant challenges, including dependence on oil, weak structural transformation, and a high informal economy. Addressing these issues is crucial for the country’s economic development.