2016 Index of Economic Freedom

Chad

overall score46.3
world rank164
Rule of Law

Property Rights20.0

Freedom From Corruption22.0

Limited Government

Government Spending84.3

Fiscal Freedom46.0

Regulatory Efficiency

Business Freedom30.9

Labor Freedom48.9

Monetary Freedom71.4

Open Markets

Trade Freedom49.8

Investment Freedom50.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 11.3 million
  • GDP (PPP):
    • $29.5 billion
    • 6.9% growth
    • 7.0% 5-year compound annual growth
    • $2,617 per capita
  • Unemployment:
    • 7.0%
  • Inflation (CPI):
    • 1.7%
  • FDI Inflow:
    • $760.5 million
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Chad lags far behind many other developing countries in terms of economic and human development. The government is largely ineffective, and oil-backed budget surpluses have allowed fiscal mismanagement to continue. Low inflation has encouraged monetary stability, but price controls still interfere in the market for key goods.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 46.3 (up 0.4 point)
  • Economic Freedom Status: Repressed
  • Global Ranking: 164th
  • Regional Ranking: 41st in Sub-Saharan Africa
  • Notable Successes: Monetary Freedom
  • Concerns: Property Rights, Corruption, and Business Freedom
  • Overall Score Change Since 2012: +1.5

Despite recent efforts to diversify, Chad is still dependent on oil revenue and subject to the volatility that this entails. Institutional support for economic freedom remains weak. The rule of law is poorly maintained, perpetuating systematic corruption and lax enforcement of property rights and undermining prospects for long-term development.

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Background

President Idriss Déby, who seized power as the leader of a rebel movement in 1990, won a fourth term in 2011 in an opposition-boycotted election. Déby has faced various armed revolts and survived Sudanese-supported rebel attacks on the capital of N’Djamena in 2006 and 2008. Security forces also foiled a coup plot in 2013. Chad has sent security forces to assist peacekeeping missions in Darfur, the Central African Republic, Mali, and the Democratic Republic of Congo and is the major component of the multinational force battling Boko Haram in Nigeria. Chad hosts nearly 500,000 refugees, primarily from Sudan and the Central African Republic, and was on the U.N. Security Council for a two-year rotation from January 2014 until January 2016. Its economy relies heavily on oil and agriculture, with the former accounting for 60 percent of export revenues.

Rule of LawView Methodology

Property Rights 20.0 Create a Graph using this measurement

Freedom From Corruption 22.0 Create a Graph using this measurement

Corruption prevails at all levels of government, from the presidential cabinet’s siphoning off of the nation’s oil wealth to petty corruption in the police force and local bureaucracy. The rule of law is weak, and the judiciary lacks real independence. Protection of private property is inadequate, and fraud is common in property transactions. Property registration costs range from 8 percent to 15 percent of property value.

Limited GovernmentView Methodology

The top individual income tax rate is 60 percent, and the top corporate tax rate is 45 percent. Other taxes include a value-added tax and a property tax. The overall tax burden equals 6.6 percent of GDP. Government spending amounts to 22.9 percent of total domestic output, and public debt equals 25 percent of GDP. Overdependence on oil, prices for which are falling, necessitates more prudent budget management.

Regulatory EfficiencyView Methodology

Starting a company takes longer than the world average of 30 days, and minimum capital requirements exceed three times the level of average annual income. Informal labor activity is widespread, and employment regulations are outmoded. The government cut spending on new infrastructure projects in 2015 but continues to subsidize state-owned enterprises such as electricity, water, and cotton companies, an oil refinery, and a tractor assembly plant.

Open MarketsView Methodology

Chad’s average tariff rate is 15.1 percent. Chad is a member of the Central African Economic and Monetary Community. Importation of goods is extremely costly and time-consuming. Numerous state-owned enterprises distort investment allocation throughout the economy. The financial sector is underdeveloped, and domestic credit balances equal less than 1 percent of GDP.

Country's Score Over Time

Bar Graph of Chad Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Chad to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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