Business Opportunities In Chad

Revenues from the booming oil sector are transforming Chad into an attractive place for business and traders

Chad’s economy has been registering a healthy growth through recent progress in the oil sector. Ever since the Chad-Cameroon pipeline was inaugurated, oil looks set to become the country’s main foreign currency earner. The government has undertaken efforts to ensure proper use of the oil revenue and to avoid the mistakes made by other oil-rich countries.

Cotton and livestock are also important export products of Chad while agriculture accounts for almost 38 per cent of the country’s total gross domestic product (GDP).

Due to all these positive economic indicators, Chad attracted approximately US$200 million worth of foreign direct investment in 2019 and there has been increased investment in the oil sector.

Although Chad has largely achieved self-sufficiency in most of its food requirements, foodstuffs still constitute most of the country’s imports. Other major import products include machinery and transportation equipment and industrial goods. Chad also imports petroleum products although this is expected to change in the near future as the country starts to exploit its own resources. According to the recent reports, the country spends almost $35 million on fuel and energy every year, importing from countries like Nigeria, France, Cameroon and India.

Due to its distance from the sea and its largely desert climate, the country is sometimes referred to as the "Dead Heart of Africa". Chad is divided into three major geographical regions: a desert zone in the north, an arid Sahelian belt in the centre and a more fertile Sudanese savanna zone in the south. Lake Chad, after which the country is named, is the largest wetland in Chad and the second largest in Africa.

Industry Sectors in Chad

The oil sector has the potential to change the future of Chad. The Doba Oil Basin is the centre of oil-sector construction and production estimates have been set at up to 250 000 barrels a day. This should result in annual government revenues of between $80 and $100 million. Chad’s economic future is largely dependant upon the exploitation of oil resources.

Construction on the Chad-Cameroon pipeline has begun at a hectic pace and will be built at a cost of $3.5 billion. A consortium of oil companies and the World Bank have provided the funding for the project. An oil refinery is planned to produce refined products.

On the other hand, the mining sector in Chad is highly prospective and large areas for gold, bauxite, uranium, silver and alluvial diamonds have been identified. Many investment opportunities have also arisen in the telecommunications, cotton and power sectors. Privatisation is occurring in these sectors and foreign firms are participating in the tender process.