Country Report Chad June 2009

Outlook for 2009-10

The president, Idriss Deby, will continue in his efforts to defeat rebel groups militarily. The rebel alliance, Union des forces de la resistance (UFR), will be subject to defections and in-fighting, but as long as it endures it will pose a significant military threat. An expanded UN military force in Chad, MINURCAT2, is not due to be fully operational until October 2009 at the earliest. Economic policy will continue to be erratic and characterised by retrospective revisions and off-budget spending. Ongoing insecurity will hit agricultural output. Given the Economist Intelligence Unit's expectation that the drop in oil output will continue, we now forecast that real GDP will contract by 1% in 2009 and by 0.5% in 2010. Increased construction activity is expected to offset declining oil output to some extent in the latter year.

The political scene

In early May forces loyal to the government reportedly routed rebel detachments in the east of the country. The Chadian army subsequently pursued rebels into Sudanese territory, which poses a grave risk of Sudanese retaliation, either through a strike by conventional forces or increased support for the Chadian insurgents. The UN's enlarged mission in Chad and the Central African Republic, MINURCAT2, is yet to reach full strength. The prime minister, Youssouf Saleh Abbas, made minor alterations to his cabinet on March 23rd.

Economic policy

An IMF delegation in April voiced concerns about policy weaknesses amid deteriorating economic circumstances. Under a staff-monitored programme with the Fund, the Chadian authorities are set to draft a supplementary budget for 2009 providing for lower spending than originally envisaged. On May 4th Mr Abbas formally relaunched the government's growth and poverty-reduction strategy for 2008-11, Strategie de croissance et de reduction de la pauvrete, focusing on good governance, bolstering economic growth and supporting vulnerable groups.

The domestic economy

Chad's total cereal output reportedly fell by 10% to 1.8m tonnes in harvest year 2008/09 (June-May), compared with 2007/08, well below official estimates issued in October. The China National Oil and Gas Development Corporation has announced a further significant gas find in the Mimosa wells drilled in the Bongor basin.

Foreign trade and payments

The Communaute economique et monetaire de l'Afrique centrale (CEMAC), of which Chad is a member state, has launched a plan to mitigate the effects of lower oil prices on the finances of oil-producing nations.

This report covers the following industry codes:
SIC Code: 1
NAICS Code: 11