Country Report Chad

Outlook for 2008-09

Over the forecast period the president, Idriss Deby Itno, will continue his tactics of dividing and disarming his civilian and military opponents—through patronage, bribes and threats—to strengthen his grip on power. However, this divide-and-rule strategy is failing and, as shown by the rebel attack on the capital, N’Djamena, in February, the peace accord signed in late 2007 has disintegrated. Political and ethnic violence is, therefore, set to continue in the east of the country. Pragmatic policy reforms aimed at securing a more inclusive government and genuine national reconciliation will be postponed. Economic policy will continue to be shaped by the flow and erratic management of oil revenue. Economic performance will be determined by growth in the agricultural and oil sectors, as well as by political instability and security problems. Real GDP growth is forecast to remain very low, at 2.1% in 2008, falling to 1.5% in 2009, as oil production begins to decrease.

The political scene

Tensions between Chad and Sudan have remained high, peaking in early May when a Chad-based Darfurian rebel group attacked the Sudanese capital, Khartoum. Mr Deby Itno has appointed Youssouf Saleh Abbas as his new prime minister. The new prime minister’s first act was to reinforce his reputation for splitting the opposition by appointing four of its members to his cabinet. The EU military operation in eastern Chad and north-eastern Central African Republic (EUFOR TCHAD/RCA) has announced that it has reached its initial operating capacity, with almost half of its scheduled 3,700 military personnel deployed.

Economic policy

The new prime minister, Mr Abbas, has presented his government programme to the National Assembly. Although Mr Abbas has changed key ministers, the direction and pace of economic policy is unlikely to alter significantly.

The domestic economy

The US Agency for International Development’s Food and Early Warning Service (FEWS) has declared that total output from the 2007/08 harvest was 1,972 tonnes, against an original estimate of 2,080 tonnes, as a result of poor weather conditions. Food price inflation has increased sharply in many urban markets, with annual rises of 20% in the price of millet in both N’Djamena and Abeche. In late May UK-based Brinkley Mining announced that it had been awarded three permits in south-western Chad to explore for uranium, gold and other base metals.

Foreign trade and payments

External debt relief for Chad remains a very distant prospect as insecurity, poor fiscal management and a lack of political will have continued to prevent progress under the country’s IMF poverty reduction and growth facility (PRGF).