Chad Short History
The area around Lake Chad has been inhabited since at least 500 B.C. In the 8th century A.D. , Berbers began migrating to the area. Islam arrived in 1085, and by the 16th century a trio of rival kingdoms flourished: the Kanem-Bornu, Baguirmi, and Ouaddaï. During the years 1883–1893, all three kingdoms came under the rule of the Sudanese conqueror Rabih al-Zubayr. In 1900, Rabih was overthrown by the French, who absorbed these kingdoms into the colony of French Equatorial Africa, as part of Ubangi-Shari (now the Central African Republic), in 1913. In 1946, the territory, now known as Chad, became an autonomous republic within the French Community.
Chad, part of France’s African holdings until 1960, endured three decades of civil warfare as well as invasions by Libya before a semblance of peace was finally restored in 1990. The government eventually drafted a democratic constitution and held flawed presidential elections in 1996 and 2001. In 1998, a rebellion broke out in northern Chad, which has sporadically flared up despite several peace agreements between the government and the rebels. In 2005, new rebel groups emerged in western Sudan and made probing attacks into eastern Chad despite signing peace agreements in December 2006 and October 2007. Power remains in the hands of an ethnic minority. In June 2005, President Idriss DEBY held a referendum successfully removing constitutional term limits and won another controversial election in 2006. Sporadic rebel campaigns continued throughout 2006 and 2007. The capital experienced a significant rebel threat in early 2008.
Chad Economy Data
Chad’s primarily agricultural economy will continue to be boosted by major foreign direct investment projects in the oil sector that began in 2000. At least 80% of Chad’s population relies on subsistence farming and livestock raising for its livelihood. Chad’s economy has long been handicapped by its landlocked position, high energy costs, and a history of instability. Chad relies on foreign assistance and foreign capital for most public and private sector investment projects. A consortium led by two US companies has been investing $3.7 billion to develop oil reserves – estimated at 1 billion barrels – in southern Chad. Chinese companies are also expanding exploration efforts and are currently building a 300-km pipeline and the country’s first refinery. The nation’s total oil reserves are estimated at 1.5 billion barrels. Oil production came on stream in late 2003. Chad began to export oil in 2004. Cotton, cattle, and gum arabic provide the bulk of Chad’s non-oil export earnings.
- Agriculture products: cotton, sorghum, millet, peanuts, rice, potatoes, manioc (tapioca); cattle, sheep, goats, camels
- Industries: oil, cotton textiles, meatpacking, brewing, natron (sodium carbonate), soap, cigarettes, construction materials
- Exports commodities: oil, cattle, cotton, gum arabic
- Imports commodities: machinery and transportation equipment, industrial goods, foodstuffs, textiles
- Oil production: 126,200 bbl/day
- Oil consumption: 2,000 bbl/day
- Natural resources: petroleum, uranium, natron, kaolin, fish (Lake Chad), gold, limestone, sand and gravel, salt
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The effects on foreign investment of years of civil war are still felt today, as investors who left Chad between 1979-82 have only recently begun to regain confidence in the country’s future. The most important economic venture to date is the Doba Basin oil extraction project in southern Chad. The project included unique mechanisms for World Bank, private sector, government, and civil society collaboration to guarantee that future oil revenues would benefit local populations and result in poverty alleviation.
Oil exploitation in the southern Doba region began in June 2000, with U.S.-based Exxon Mobil leading a consortium in a $3.7 billion project to export oil via a 1,000-km. buried pipeline through Cameroon to the Gulf of Guinea. Beginning in late 2000, development of Chad’s petroleum sector stimulated economic growth by attracting major investment and increased levels of U.S. trade. Oil revenue began trickling into the country in July 2004. It was hoped that this project would serve as a catalyst for the entire economy by helping to reduce energy costs and attracting additional trade and investment in other sectors. However, the question remains whether Chad will continue to consolidate its economic reforms and invest its oil revenues wisely in order to encourage a wider range of economic initiatives. Political controversy surrounding elections and a rebellion in northern Chad also dampen Chad’s economic prospects somewhat by exposing the weaknesses in Chad’s political institutions.
The U.S. Government expressed both concern and disappointment after the Government of Chad on August 26, 2006 ordered Chevron Oil Corporation and Petronas, members of the Exxon Mobil-led and operated oil consortium, to cease operations and leave Chad within 24 hours for alleged non-payment of income taxes.
Chevron and Petronas entered into a tax agreement in 2000 with the government, represented by Petroleum Minister Mahamat Hassan Nasser, when they replaced Elf and Shell as minority members of the consortium. The companies assert that the agreement authorizes them to use a special depreciation schedule allowing greater tax deductions than those afforded consortium partner Exxon Mobil. The Government of Chad, however, claimed that the 2000 tax agreement was illegal, because it was negotiated by officials without proper authority and was not vetted by the National Assembly. The Government of Chad also announced plans to press charges against negotiating officials, and on August 28, 2006 replaced Nasser, as well as Economic Minister Mahamat Ali Hassan and Farming Minister Moucktar Moussa. Chevron and Petronas consider the Government of Chad to have violated its contractual obligations and planned to seek recourse through all diplomatic and legal means. While the U.S. takes no position on the merits of the dispute, it has urged all parties involved to respect any binding contractual commitments.
Chad Map
