Why President Deby’s 348-word letter to the global investment community matters.
“Your investments will not only support the development of an emerging country, the opportunities in Chad will represent handsome returns for those who join us”.
Those were the closing words of Chad’s president Idris Deby’s passionate note to the international community today. The president of the Central African nation is currently in France where he is meeting with global leaders for a two-day round table on Chad’s National Development Plan 2017–2021 where development partners are also expected to approve Chad’s budgetary gap of 3710 billion FCFA.
The president seized the opportunity to pen down a personal note and appeal to prospective investors.
The letter reads:
As the president of the Republic of Chad I am in Paris today addressing a distinguished and talented group of international partners who will be validating the financing of the next step of Chad’s National Development Plan 2017–2021.
Not all readers know to what degree the world relies on Chad to help enforce the security and stability of central Africa and the African continent. Chad has also emerged as a global model for humaine integration of hundreds of thousands of immigrants whom we have welcomed and educated. Chad has adopted an inclusive and consensual development framework and has fostered a constructive dialogue between its administration, civil society, religious groups, parliament, and our technical and financial partners.
Aside from mobilizing resources in Paris to meet the funding requirements of our National Development Plan (over 6 billion USD), we are here to gather suggestions on how to do more in the process of reviving our growth. Chad has been doing the work needed to provide the legal and economic environment for investors to come and participate in the future. We have been improving transparency and governance; we have shown that development and protection of the environment and our natural resources go hand in hand.
Admittedly, Chad faces challenges. The global drop of oil prices has lessened our national revenues and tax base, and the absorption of immigrant populations is a costly responsibility. National and regional security is an ongoing task that requires massive resources. The financing commitments we are achieving in Paris today are essential, and are greatly appreciated, but beyond the solidarity of our partners Chad calls out to the international investment community to consider the attractiveness of Chad by accompanying us as we diversify our economy and develop our non-oil sectors. We have ripe opportunities to share.
Today, as the partners approve pledges at the Paris Round Table, I personally invite business leaders from around the world to come and invest in Chad. Your investments will not only support the development of an emerging country, the opportunities in Chad will represent handsome returns for those who join us.
SEM Idriss Deby Itno
President of the Republic of Chad
Why it matters.
Idris Deby who has been the country’s president since 1990 is looking to change perceptions of his country and attract investments to grow the country’s economy. Chad sits on the hotbed of one of the continent’s most crises prone region, bordering Sudan, Niger and Libya. Perhaps the perception of crises in the region hasn’t helped as Chad is rarely on the radar of most investors on the continent.
Chad has a population of just over 14 million people with almost 50 per cent of its people living below the poverty line. A GDP growth rate of -7.0% in 2017, chad produces about 120,000 barrels of oil per day, making Oil the mainstay of the economy followed by Agriculture.
In 2015, Chad recorded a Government Budget deficit equal to 6.40 percent of the country’s Gross Domestic Product. The Budget averaged -2.27 percent of GDP from 2002 until 2015, reaching an all time high of 4.50 percent of GDP in 2008 and a record low of -9.80 percent of GDP in 2009.
Since 2012, Chad had consistently ranked poorly in its Ease of Doing Business Rank by the World Bank and IFC. Out of a total of 183 economies, Chad had consistently been at the bottom, only improving three steps to 180 in 2017.
Chad is flanked by wars and a growing menace of terrorism on the continent. The country plays a leading role in security in the region and occupies a critical position in helping stabilize the region. Chad is the rallying figure of counterterrorism operations in much of West and Central Africa, however this seems to be having a huge toll on the country’s economy following the recent crash of oil prices making the Chadian president look to the west for support.
Early in the year, in an interview with LeMonde, President Idriss Deby stated,
“We cannot continue to be everywhere — in Niger, in Nigeria, in Cameroon, in Mali — and to survey 1,200 kilometers of the border with Libya. All of that is excessively expensive, and if nothing is done, Chad will unfortunately have to pull out.”
What followed on June 30, 2017 was the International Monetary Fund approving a $312.1 million loan to Chad, of which $48.8 million was to be disbursed immediately. The IMF said the loan support was to help Chad in its stabilization and recovery strategy and help foster long term robust and inclusive growth.
While this might look like a passionate appeal to help stabilize not just chad but other countries like Nigeria which are of strategic interest to the west, it also seems like a personal card on the table for President Deby to silence international criticism of his regime. Swissaid recently published a stinging report on Deby where it described the country as ‘Chad Inc: A corrupt family clan’. The report alleges that the country’s oil wealth primarily benefits Deby and his Zaghawa ethnic group. The report also points to connections between Deby’s government and Glencore in a $1.4b oil deal.
Perhaps, a brilliant card that can best be summarized thus: keep my country going or the carpet is pulled from under the feet of France and America who can’t afford to let the region slip through the cracks.
Originally published at The Nerve Africa.