According to UNCTAD World Investment Report 2022, in oil exporting Chad, FDI inflows slightly increased from USD 558 million in 2020 to USD 562 million in 2021. Furthermore, the stock of FDI ammounted to an estimated USD 7.6 billion that same year. The majority of FDI in the country goes toward oil exploration and infrastructure development. The services sector has also been attracting a significant ammount of foreign investment, mostly through telecommunications and banking sectors. The country's main investors are Nigeria, France, the United Kingdom and South Korea.
Although Chad is open to investments, the lack of diversification of the economy added to difficulty of starting new businesses and complicated tax procedures are major constraints. There are also the poor state of infrastructures, a narrow domestic market and shortage of skilled labour. Nevertheless, the government has set reforms aimed at boosting business climate. It also planned to halve property registration cost. Although the country is open to investments, it is difficult to invest in Chad due to the relatively unfavourable business climate. Still, Chad has improved in reducing the time needed to transfer property and thus, accelerating property registration. Most of the funds invested in the country are absorbed by the oil and gas sector, despite efforts in the infrastructure sector. Insecurity, political instability and poor infrastructure, as well as a limited domestic market and a shortage of skilled labour remain major obstacles to investment. Protection of private property is inadequate, and fraud is common in property transactions. In 2021, the British oil company Savannah Energy acquired both Petronas's and ExxonMobil's assets in Chad for USD 626 million, gaining control over the companies' oil fields in southern Chad, as well as a major pipeline transporting oil to a marine terminal for exportation in Cameroon.
|Foreign Direct Investment||2020||2021||2022|
|FDI Inward Flow (million USD)||558||705||614|
|FDI Stock (million USD)||7,053||7,758||8,372|
|Number of Greenfield Investments*||1||2||1|
|Value of Greenfield Investments (million USD)||199||33||10|
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
-the geographical isolation of Chad
-the fact that the country is too heavily reliant on the oil sector (about 20% of GDP and 60% of exports)
-high poverty rate (40% of the population in 2019 according to the World Bank)
-high level of corruption and weak contract enforcement
-the poor business climate (in 2018, the World Bank ranked Chad 181st out of 190 countries for ease of doing business)
-poor transport infrastructure, a lack of skilled labour, and unreliable energy supply.
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Latest Update: September 2023