After Squandering Its Oil Wealth, Chad Faces an Economic Reckoning

After Squandering Its Oil Wealth, Chad Faces an Economic Reckoning
Chad’s president, Idriss Deby, at the presidential palace in the capital, N’Djamena, April 20, 2016 (AP photo by Andrew Harnik).

A recent call for a vote of no confidence in Chad’s government over its management of the country’s oil wealth shows the level of anger among Chadians as they grapple with one of the most serious economic crises in years. Chad, which depends on oil for more than 70 percent of government revenue, has been brought to its knees by the dramatic fall in the world price of a barrel of oil since 2014. Having registered 6.9 percent annual growth in 2014, Chad’s economy is expected to contract by 1.1 percent this year, according to the International Monetary Fund, with just 1.7 percent growth forecast for 2017. Its budget deficit has increased from 6.2 percent of GDP in 2014 to 10.7 percent in 2015, which led to a staggering cut in government spending of 42.5 percent.

The call for a no-confidence vote, led by opposition politician Madtoingue Benelngar, from the National Union for Development and Renewal, or UNDR, comes hot on the heels of a series of protests sparked by the government’s austerity program to deal with the falling oil revenues. At the end of August, President Idriss Deby launched 16 measures, including cutting annual student grants completely—equivalent to about $600—and pay for civil servants by 50 percent. Led by Chad’s prominent trade union umbrella organization, known as UST, students and workers took to the streets. In October, magistrates then went on strike for two weeks after having tried unsuccessfully to overturn their salary reductions. On top of that, the government owes an estimated $461 million, at least, in unpaid invoices, and unhappy business leaders have appealed directly to the president.

“During the oil boom, economic entrepreneurs and politicians close to the presidency made a lot of money,” says Marielle Debos, an associate professor of political science at the University of Paris Ouest Nanterre. “People are aware of this and cannot accept the harsh austerity measures imposed by the government.”

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.