Chad: Investing
In this page: FDI in Figures | What to consider if you invest in Chad | Procedures Relative to Foreign Investment | Investment Opportunities
According to UNCTAD World Investment Report 2021, in oil exporting Chad, FDI inflows declined from USD 567 million in 2019 to USD 558 million in 2020, following the global economic crisis triggered by the Covid-19 pandemic. Indeed, in 2020, the economy suffered a temporary suspension of oil production and a slowdown of trade on the back of border closures to contain the pandemic. The stock of FDI has been estimated at USD 7 billion in 2020. The majority of FDI goes toward oil exploration and infrastructure development. The services sector has lately attracted foreign investment too, mostly through telecommunications and banking sectors. The country's main investors are Nigeria, France, the United Kingdom and South Korea.
The country has been ranked 182nd worldwide for the ease of doing business in the last Doing Business Report, published by the World Bank in 2020. This represents a slight decline from the 2019 edition, when the country was ranked 181st. Chad has improved in reducing the time needed to transfer property and thus, accelerating property registration. Most monies invested in the country are absorbed by the oil and gas sector, despite efforts in the infrastructure sector. 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. 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 | 2019 | 2020 | 2021 |
|---|---|---|---|
| FDI Inward Flow (million USD) | 567 | 558 | 562 |
| FDI Stock (million USD) | 6,495 | 7,053 | 7,615 |
| Number of Greenfield Investments* | 1 | 1 | 2 |
| Value of Greenfield Investments (million USD) | 5 | 199 | 27 |
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: March 2023
