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Chad: investment opportunities amid physical insecurity

Aug 16, 2023 /

Author : DefSEC Analytics

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Chad is the largest landlocked country in Africa. The sheer size of the country and its location "grant" it a strategic role in the continent's security.

Covering over 1.2 million square kilometres, the country is more than twice the size of France—the largest country in Western Europe. It has a population of about 17 million people of diverse ethnicity including Arabs.

Chad’s economy has moved from one that had been heavily agrarian to an oil-dependent one. This has been the case since it started producing the resource two decades ago. Worth over about $12 billion, the country’s economy is significant.

Countries with an economic interest in the Chad petroleum industry include China, the United States, France, and Taiwan. The oil pipeline linking the hub of oil production in the south with Cameroon is a major economic infrastructure of international value. With a fast-growing and young population, the country is estimated to reach over 60 million people from its current 17 million in 2100.

This means, a huge market driven by consumption now and in the future. Its location in Central Africa and the borders its shares with important economies in the overlapping regions give its economic advantage also in the long term. Nigeria, Cameroon, Libya, and Sudan are among these economies. The country is improving its infrastructure in recent times—especially in the south.

Security Issues:
When terror groups became more active in the Sahel, the G5 Sahelian states that had come together to combat the menace included Chad. It was the only state outside West Africa to be part of the security arrangement. Yes, Chad is important in West Africa. The country also shares a boundary with Nigeria, the most populous and largest economy in Africa.

Chad shares a vast northern border with Libya which had in the past been a reason for an inter-state conflict between the two states. For decades, Libya has influenced in many ways the domestic politics of its southern neighbour.

Currently, the terror menace in Africa constitutes one of the major challenges on the continent. To effectively fight it, states like Chad would be indispensable. Its position at the crossroad of the continent cannot be overlooked. The country has also become a transit zone for the trafficking of illicit arms and drugs.


Verdict:
Despite the insecurity faced by the country, especially in the north, the country holds potential for economic development. Its youthful population, if well-educated, could be very instrumental in the transformation of the economy. The risk remains high; however, if political stability and social investment are prioritized there will be some improvement.


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