The International Monetary Fund (IMF) Executive Board has concluded its 2024 Article IV consultation with Chad, as announced on December 9, 2024. The discussions highlighted Chad's economic recovery post-pandemic and the challenges it faces.
In 2023, Chad experienced a growth rate of 4.9%, driven by a resurgence in agricultural production and increased public investment. Oil GDP saw a rise of 7.6% due to previously closed oil fields resuming operations. However, inflation rose to 8.7% by August 2024, influenced by adjustments in fuel prices and rising food costs.
The non-oil primary deficit decreased to 4.2% of non-oil GDP in early 2024 due to reduced emergency spending and financial constraints. Public debt dropped to 34.2% of GDP in 2023 thanks to high oil prices boosting government revenue.
Economic growth is projected to slow down to 3.1% in 2024 because of recent floods and a slight dip in oil production but is expected to recover over the medium term through sustained public investment and reforms. Inflation should gradually align with the BEAC target of 3%. Fiscal consolidation efforts aim at reducing the non-oil primary deficit progressively from 8% of non-oil GDP in 2024 to around 5% over the medium term.
Risks remain significant, including potential delays in fiscal measures implementation, declining oil prices, an influx of Sudanese refugees, and climate change-related events.
Executive Directors noted "the negative impact of recent severe shocks—including historical floods and the continuous inflows of refugees from Sudan—on Chad’s economic growth." They praised Chad's commitment to development goals such as broadening access to services and improving governance.
Directors emphasized "a prudent and sustainable fiscal policy" for social spending space creation within Chad's national development plan (PND). They encouraged structural reforms like digitalizing tax administration and improving state-owned enterprise management.
Efforts are needed "to strengthen the financial sector," particularly restructuring two systemic public banks for better performance.
Diversifying beyond oil reliance was stressed as crucial for sustained growth alongside governance improvements and gender gap reductions.
Directors also underlined integrating climate strategies into national plans given frequent climate shocks affecting Chad.
Enhancing economic statistics quality was deemed necessary for informed analysis, aligning capacity development with demand was recommended too.
The next Article IV consultation with Chad is anticipated on a standard annual cycle.