Investing in Chad to Reduce Poverty

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DOBA, Chad — Chad is a landlocked country in central Africa with more than 13 million residents. About 40 percent of the population in Chad lives below the poverty line despite the fact that the country is oil-rich. Chad is rated at 37 in the world for crude oil exports. Cotton, cattle, sesame, shea butter and gum arabic make up the major non-oil exports. Chad’s government plans to diversify and develop a formal economy and increase exports of its valued products by 2030. In order to accomplish this, it is important that other countries start investing in Chad to reduce poverty.

New Businesses Create Jobs

In an effort to encourage external companies to start operations in Chad, its 2008 Investment Charter offered foreign companies up to five years of tax-free status. Another incentive to welcome external investors is the ease in which outside companies can start operations in Chad. Chad’s National Investment and Exporting Agency makes it easy to register international and national businesses by allowing registration all in one place.

External companies that establish operations in Chad produce jobs for its citizens and for those that moved from the country where the companies are headquartered. This gives opportunities for those living in poverty to prosper, allowing them to afford food, clean water and sanitation, shelter and medicine that they were not able to afford. As a developing country, there are many areas of investment in sectors like mining, oil exploration, agribusiness, livestock, electrical power generation and distribution, telecommunications and pharmaceuticals.

Powering Chad

Currently, Chad only has 125 MW to serve the whole country, leaving more than 13 million people without power. In fact, only 4 percent of the population has electricity. Though this rate is low, the government has been encouraging outside investors to help build the inadequate energy sector. The room for growth in the energy sector is vast, and to achieve Chad’s goal of a formal economy by 2030, there needs to be more access to reliable and affordable electricity.

Electricity is a basic need, especially for businesses in the oil, telecommunications and mining industries. Currently, the number of people with access to electricity is too low for a country seeking to develop. The good news is that external companies can set up operations in Chad. This would provide much-needed electricity and jobs as well as give Chad the potential to become a leader in the energy sector, just like Exxon Mobil is the main oil extractor in Chad.

The Success of Exxon Mobil

Exxon Mobil Corporation is just one company that is seeing growth in Chad. Chad exports mainly to the U.S. and China. Oil was found in Doba, in the capital region of Logone Oriental, but funding was an issue, so the project was abandoned. Exxon Mobil took over and set up operations in Chad in the early 2000s and is still in operation. The project is still is an ongoing success. It has increased economic development in not only Chad but also Cameroon where the oil is sent via pipeline.

Nationals fill almost all of the jobs in Exxon Mobil’s oil operations in Chad and Cameroon. Larry Ligring is one Chadian who has benefited from the company’s presence in Chad and Cameroon. Ligring received a Masters Degree in Electromechanics from the University of N’Djamena and is a supervisor of Maintenance Area 1, an area along the border of Cameroon. He was trained in the skills he needed to maintain pipeline operations. He represents the potential that this project can bring to other citizens in Chad.

If more countries start investing in Chad to reduce poverty, it stands a much better chance of making its 2030 goals. One of the major investments must go towards providing power to its citizens. As more companies invest and build in Chad, the creation of jobs will help to alleviate poverty in the country.

Lucas Schmidt

Photo: Flickr

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