Chad is a landlocked country covering a vast area of 1,284,000 km2. It is marked by steppe vegetation, climatic uncertainty, and a situation of insecurity as a result of several armed rebellions since the 1960s. The key factors in the current political situation are the desire to pursue the process of democratization and to establish peace within the country and with neighbouring Sudan.

Chad's main sources of growth include oil, which has been exploited in the country since 2003, and agriculture, in particular cotton, gum arabic, food crops, as well as livestock breeding. Oil resources provide the country with new prospects but are not without their problems, due to the expectations of the population and the risk of conflict that these resources might create. Socially, Chad’s development indicators show that it is one of the poorest countries in the world, with an HDI ranking of 170 out of 177 countries in 2007. After a moderate performance of 0.2% in 2006, Chad's real GDP contracted by 0.3% in 2007. Under these conditions, the GDP was estimated to grow by 1.7% in real terms by end 2008.  Because of pressure from security spending, the country’s budget surplus shrank from 2% of total GDP in 2006 to 0.8% in 2007. The non-oil sector posted deficits of 14.8% and 21% of GDP in 2006 and 2007, respectively.

Bank Group Strategy

Since its operations in Chad began in 1974, the AfDB has financed 68 operations, with total net commitments of UA 428.7 million in the form of loans and grants. These commitments include 41 investment projects, 13 studies, 4 structural adjustment programmes, and 8 institutional support projects with the agricultural development sector in the lead position.

As at October 31, 2008, the Bank’s portfolio comprised 19 operations, four of which are multinational projects, for cumulative net commitments of UA 179.2 million. The Bank Group Country Strategy Paper (CSP) for the 2005-2009 period, in line with the focus areas of the National Poverty Reduction Strategy (NPRS) for Chad, centres on two pillars: (i) promoting good governance by supporting economic reforms and institutional capacity building, including the management of oil resources, and (ii) supporting sustainable growth in the non-oil sector through the development of infrastructure and the exploitation of natural resources. To implement this assistance strategy, an allocation of UA 25.52 million was awarded to Chad under ADF-X. Under ADF-XI, the allocation for Chad for the 2008-2010 period is UA 31.61 million. This will finance two new operations during the 2009-2010 period: a Road Infrastructure Project for 2009 and a Women and Youth Poverty Reduction Programme in 2010. The Bank will prepare its Country Strategy Paper for 2010-2014 for Chad, as well as its portfolio review in 2009.