Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
With rich natural resources, minimally developed agriculture and meat processing sectors, ample sunshine, increasing telecommunications coverage, and a rapidly growing population, Chad presents an opportunity for targeted engagement in key sectors. Despite numerous challenges, the success of several foreign investors and exporters in Chad illustrates the business opportunities for experienced, dedicated, and patient investors. ExxonMobil inaugurated Chad’s oil sector, which will mark 20 years of operations in 2023. Olam International entered Chad’s cotton market in 2018 and dramatically increased national cotton production. Formidable challenges including poor infrastructure, low consumer purchasing power, weak human capital, and bureaucracy and corruption can be overcome with sound business plans, use of local agents, strong relationships with key actors, and patience.
Chad is Africa’s fifth largest country by geographical area with a rapidly growing population of 15.81 million (2019 estimate). It has a per capita gross domestic product (GDP) of USD 1,645 at purchasing power parity (PPP) in 2019 according to the World Bank. Chad has the tenth largest oil reserves in Africa, the largest population of camels in the world, and ranks in or near the top ten global populations of goats, sheep, and cattle. Gold mining is an emerging economic sector.
Chad is landlocked, bordering Libya to the north, Sudan to the east, Central African Republic (CAR) to the south, and Cameroon, Nigeria, and Niger to the west (with which it shares Lake Chad). Chad is a member of the Central African Monetary and Economic Community (CEMAC) comprised of Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo, Equatorial Guinea, and Gabon.
Oil and agriculture drive Chad’s economy. Oil constitutes the bulk of export earnings and government revenues. Gold, gum arabic, sesame, cattle, and cotton are Chad’s primary non-oil exports. A majority of Chad’s population relies on subsistence farming and livestock rearing. The government continues plans to diversify the economy, increase export of value-added products, and develop a formal economy by 2030 despite persistent low global oil prices and a 2016-2017 economic crisis that reduced investment spending. COVID-19 impeded regional trade and negatively impacted consumer purchasing power in 2020.
As of 2018, China supplied the largest share of Chad’s imports at 23 percent, followed by the United Arab Emirates at 14 percent, France at 11 percent, the United States at 7 percent, and Qatar, Turkey, India, and the Netherlands at 4 percent, according to the International Trade Centre. Chad’s primary export partner is largely dependent on who imports Chad’s oil. Chad’s primary export partners in 2018 included India with 30 percent, the United States with 29 percent, the Netherlands with 23 percent, the United Arab Emirates with 8 percent, and China with 5 percent, according to the International Trade Centre. Preliminary data for 2019 indicated China was Chad’s most important export partner with 42 percent, almost entirely oil exports. Some regional trade may not be captured in official data.
In 2019, Chad ranked No. 146 in U.S. total trade value with a total of $217.5 million, according to the United States Census Bureau. U.S. exports totaled $84.6 million and imports totaled $132.8 million, a deficit of $48.2 million. The top five U.S. exports to Chad by value – electrical machinery, tanning or dyeing extracts, vehicles, edible preparations, and chemical products – accounted for 76.6 percent of total exports to Chad. The top two U.S. imports from Chad by value – oil and gum arabic – accounted for 99.0 percent of all inbound shipments.
The United States and Chad have no bilateral trade or investment agreements. Chad is eligible for the African Growth and Opportunity Act (AGOA), receiving trade preferences including quota and duty-free entry for certain goods.
U.S. companies should consider exporting to Chad due to a strong appreciation for the quality of U.S. goods and services, an undersaturated market, and a young and growing population, and first-mover potential in many sectors.