Chad's economy: the oil money that came with a rule

What the World Bank asked of Chad's oil

The oil sat under the south, near Doba, in the part of the country where cotton is grown. Development of the fields was originally due to finish in 2000 and slipped to 2003 for lack of financing. In June 2000 the World Bank Board approved a loan for a small portion of the Chad-Cameroon Petroleum Development Project, whose purpose was to carry Chadian crude through a 1,000-kilometre buried pipeline across Cameroon to the Gulf of Guinea. The private side was a consortium led by ExxonMobil with Chevron and Petronas, which put $3.7 billion into reserves then estimated at one billion barrels, and production began in 2003.

The Bank's money was a minor share of the cost. What it brought to the table was the terms. The plan it sponsored required transparency in payments and committed 80% of the money from oil exports to five priority development sectors, of which education and health care were the two the plan weighted most. The History of Chad account describes the arrangement as designed to keep the revenue away from corruption, with monitoring shared between the Bank, the private companies, the government and civil society.

That design was contested from the start. The same account records that the monitoring and revenue mechanisms, presented as unique, "faced intense criticism from the beginning", and that the project's success depended on several monitoring bodies keeping every party to its commitments. Chad also received debt relief in May 2001, before the first barrel was sold.

The scale of the bet is easier to see beside the economy it entered. Before oil, cotton accounted for approximately 80% of export earnings, and the established industries were the ginning of that cotton, slaughtering and the milling of grain, all of them tied to farming. Oil was a new sector arriving in a state whose 1987 road network had held 30 kilometres of paved road.

How the revenue rule was rewritten in wartime

The rule lasted about three years of production. Refugees from Darfur began arriving in eastern Chad in 2003, more than 200,000 of them by the History of Chad account, and border incidents grew into a war with Sudan. Rebel forces tried to take N'Djamena in 2006 and again in 2008.

In January 2006 the Chadian government passed laws reducing the share of oil revenue reserved for development, and the World Bank suspended its loan programme in response. The History of Chad account says the government added "national security" to the list of priority sectors, which opened the oil money to the army. In July 2006 the Bank and the government signed a memorandum of understanding under which Chad committed 70% of its spending to priority poverty reduction programmes.

The purchases that followed are on record. During the civil war more than 600 million dollars went on fighter jets, attack helicopters and armoured personnel carriers. One estimate in the same account puts Chad's earnings from oil since 2003 at between 10 and 11 billion dollars, of which about 4 billion dollars were invested in the army. Britannica's history of the period reaches a similar reading: the administration of Idriss Déby, it says, appeared to spend much of the oil revenue on weapons against rebel offensives in place of the social and development programmes the revenue had been meant for.

The rebels who reached the capital in February 2008 accused Déby of corruption and of embezzling millions in oil revenue. The same source cautions that the uprising looked like a power struggle inside the elite that had long held power. An agreement between Chad and Sudan signed on 15 January 2010 ended five years of war and reopened a border that had been closed for seven.

Who controls the oil fields today

ExxonMobil operated the Doba fields until 2023, when they were nationalised and placed under the control of the Chadian government.

What oil weighs in the economy depends on which measure is taken. The World Bank's 2026 country overview puts the sector at around 15% of GDP, 41% of government revenue and 76% of exports. A sector that is a seventh of output and three quarters of exports leaves public finances exposed to the oil price, which the African Development Bank lists among the main risks to its outlook for 2026 and 2027.

The volume has been slipping. The IMF's 2024 Article IV report expected growth in 2024 to slow partly because of a slight decline in oil production, and the World Bank estimated oil GDP growth at minus 0.7% for 2025 on the same cause. The currency of the trade added a second exposure: the IMF mission of December 2025 found that oil revenues in 2025 had come in below projection, pushed down by a large depreciation of the US dollar. Among the reforms the government committed to in the same review was publishing the result of an audit of oil revenues.

Who bought Chad's exports in 2017 follows from the oil. The United States took 38.7%, China 16.6%, the Netherlands 15.7%, the United Arab Emirates 12.2% and India 6.3%, by the CIA figures the Economy of Chad article reproduces. Exports were estimated that year at $2.464 billion against imports of $2.16 billion.

Why cotton came first in the south

Cotton is the older export and the one with the longer shadow. France introduced large-scale cotton production in 1929 and, by the History of Chad account, regarded the colony primarily as a source of raw cotton and untrained labour for its more productive colonies further south. The administration governed the Sara south effectively and the Muslim north and east only nominally, so the colonial state and the cotton crop were both concentrated in the south.

The cost was recorded at the time. The focus on cotton produced a class of poorly paid rural workers, cut food production, and caused famines in some areas. Tensions between farmers and elites ended in the Bébalem massacre by colonial authorities in 1952.

After independence the crop kept its place until the oil arrived. The national cotton company, Cotontchad, was weakened when world cotton prices fell, and its rehabilitation was financed by France, the Netherlands, the European Union and the International Bank for Reconstruction and Development, with privatisation expected to follow.

Britannica describes the processing of raw cotton as the work that employs a majority of those in Chadian industry, and most of the fibre ginned in Chad's plants goes to Europe and the United States. Production in 2023 came to 165,000 bales of 480 pounds. The World Bank's private sector arm, the IFC, said in 2026 that it strongly supports the cotton sector and is looking at gum arabic, sesame and livestock in the same way.

What the fields and herds produce

The southernmost tenth of the territory holds the most fertile cropland, with sorghum and millet. In the Sahel only the hardier millets grow, at lower yields, and the Sahel is pasture for commercial herds of cattle as well as goats, sheep, donkeys and horses. The scattered oases of the Sahara support dates and some legumes.

The shares depend on the year and the estimator. The CIA estimate for 2017, reproduced in the Economy of Chad article, put agriculture at 52.3% of GDP, industry at 14.7% and services at 33.1%; the World Bank's 2026 overview gives agriculture roughly 40%. An earlier estimate, for 2006, had 80% of the labour force working in agriculture, and the World Bank counted about 88% of jobs as informal in its 2026 overview.

Beside oil, cotton and livestock, the export list in the 2017 estimates names sesame, gum arabic and shea butter. Gum arabic comes from acacia, and the national replanting programme meant to hold back the desert is described in the Wikipedia account as returning income from the acacias as well.

Livestock is the wealth the national accounts see least of. Britannica places most of the herds in central Chad and notes that much of their value never enters the cash economy, so that livestock products form only about a tenth of exports. A refrigerated meat-processing plant stands at Sarh, and N'Djamena has a refrigerated slaughterhouse; the government has tried to raise output with stronger breeds and new slaughterhouses. The US Department of Labor's findings for 2013 named cattle herding as an agricultural activity that employed children.

Fishing runs on the Lake Chad, Chari and Logone basins, and about half the catch is salted and dried for export. The lake it depends on has moved under it. Lake Chad covered 22,772 square kilometres in June 1966 and 1,756 square kilometres in February 1994, and Britannica puts the shrinkage since the 1960s at approximately 90%. Wheat is grown on the lake shores and rice in the Chari valley, and little of either is processed commercially.

What the ground yielded before oil

Natron, a complex sodium carbonate, was historically the principal mineral. It is dug in the Lake Chad and Borkou areas and used as salt and in making soap and medicines, and the country's mining industry of the 1960s produced it. Gold is mined in the south-west, gold-bearing quartz has been reported in Biltine, and deposits of uranium, titanium and bauxite are recorded without a production figure beside any of them.

What distance from the sea adds to every cost

N'Djamena is 1,060 kilometres from the nearest seaport, Douala in Cameroon, and the distance together with the dry climate earned the country the name "Dead Heart of Africa". Chad has no railway of its own, so exports and imports move over Cameroon's rail system to and from Douala. China supplied 19.9% of Chad's imports in 2017, Cameroon 17.2% and France 17%.

Roads were rebuilt from almost nothing. The network held 30 kilometres of paved road in 1987 and 550 kilometres by 2004 after successive rehabilitation projects, and many roads are still unusable for several months of the year. Three trans-African highway routes cross the country: Tripoli to Cape Town, Dakar to N'Djamena and N'Djamena to Djibouti. In August 2026 Afreximbank lent Chad 110 million euros for transport infrastructure linking it to Egypt and Libya. The direction is an old one. The Sahel kingdoms that preceded the state drew their economic base from control of the trans-Saharan trade routes.

Power is scarcer than transport. In 2013 about 4% of the population had electricity, 14% in towns and 1% in the countryside. Production in 2016 was 224.3 million kilowatt hours, about 98% of it from fossil fuel, and most households burn wood and manure. The parastatal utility, by the Wikipedia account, reaches 15% of the capital's residents.

Communications started from a similar base. In 2000 Chad had 14 fixed telephone lines for every 10,000 inhabitants. The IFC has since invested in the mobile operators Moov Africa and Airtel. In 2013 the ministry responsible announced that it would seek a partner for fibre-optic technology, and the Wikipedia account records a national backbone of 1,200 kilometres costing over 175 million euros.

Where refugees and the army take the budget

The war next door has become a fiscal line. The IMF mission of December 2025 counted 160,000 additional Sudanese refugees since January 2025, bringing refugees and asylum seekers in Chad to 1.5 million. The African Development Bank put the figure at over 1.5 million in January 2026 and listed the cost of refugees, with defence and security, as the reasons current spending rose in 2025.

Military spending rose 11.6% in 2025 on the previous year and reached 23% of domestic revenue, by the World Bank's 2026 overview. The overall budget held, by the AfDB's figures: the deficit was 2.3% of GDP in 2025, down from 2.7% in 2024, because higher non-oil tax revenue largely offset the spending. Public debt stood at 32% of GDP at the end of 2024.

Poverty is the account the money was originally meant to change. The national poverty rate fell from 55% to 47% between 2003 and 2011, yet the number of poor people rose from 4.7 million in 2011 to 6.5 million in 2019. The World Bank counted 44.8% of the population below the national poverty line in 2022 and expected extreme poverty to reach 9.5 million people in 2025, in a population the national record puts at 19,319,064 in 2023. GDP per head was expected to shrink by 0.1% in 2025 even as the economy grew.

How the lenders read the recent figures

The figures for the last three years come from three lenders, and they do not always agree. Growth was 4.9% in 2023 by the IMF's 2024 Article IV report, which projected 3.1% for 2024; the outturn for 2024 was 5.0%, by both the IMF in December 2025 and the AfDB. For 2025 the AfDB and the World Bank both give 3.4%, with non-oil activity growing 4.2%.

For 2026 the estimates part. The AfDB's African Economic Outlook, updated in June 2026, expected 3.6%; the IMF mission of December 2025 had already raised its own forecast for 2026 from 3.6% to 5.1%, on stronger than expected non-oil activity. Inflation for 2024 is 5.1% in the AfDB's series and 5.7% in the World Bank's, and prices then fell: the IMF recorded inflation of minus 4.3% in November 2025 as food prices dropped from the highs of the year before.

The current arrangement with the IMF is an Extended Credit Facility approved on 25 July 2025, worth SDR 455.65 million, about US$655 million. At the first review in late 2025 the mission found all quantitative criteria met at end-June 2025, including the targets on non-oil revenue, the wage bill and the non-oil primary balance. The authorities cleared CFAF 51 billion of external arrears and cut arrears to contractors by CFAF 42 billion by the time of the review. The target on domestic financing was missed because the restructuring of two state-owned banks was delayed.

The government's own plan is larger than any one lender. The National Development Plan needs $30 billion, 46% of it from the private sector, and by November 2025 the country had secured commitments of $20.5 billion. Funding now comes from the United Arab Emirates and the Islamic Development Bank as well as the Bretton Woods institutions.

The new programme's conditions sit on non-oil revenue and the wage bill. The old one sat on what oil money could be spent on. The first set terms on how oil money could be spent. The second sets them on how money is raised from everything else, two decades after the pipeline opened.