Chad - Economic developments : constraints and potential

FEl E Pfl DV DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. 75a-CD CHAD'S ECONOMIC DEVELOPMENT: CONSTRAINTS AND POTENTIAL July 2, 1973 Western Africa Region Programs II This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CONVERtSIN TABLE RATE OF EXCHANGE Through August 11, 1969 US$ 1.00 = OFAF 246.85 CFAF 1,000 = US$ 4.05 August 11, 1969 - December 20, 1971 US$ 1.00 = CFAF 277.71 CFAF 1,000 = US' 3.60 December 20, 1971 - February 12, 1973 USg 1.00 = CFAF 255.79 CFAF 1,000 = US$ 3.91 Since February 12, 1973 US$ 1.00 CFAF 230.207 CFAF 1,000 US$ 4.34  This report was prepared by the economic mission which visited Chad in April/May 1972, consisting of Mr. Richard M. Westebbe, chief, Mr. Theodore Nkodo, economist, Mr. Hellmut Dostal, economist, and Mr. Florent Agueh, economist. It. includes the comments made by the Government during discussions in April 1973.   TABL. OF CONTEN'TS Page NO. MAP IBRD 3168 RF COUNTRY DATA SUMMARY AND CONCLUSION ............................... i - vii GENERAL I. THE ISSUES ............................................ I1. ECONOMIC STRUCTURE AND RECENT DEVELOPIMENT. 3 A. GDP and Production .... ........... .... 3 BX Foreign Trade ....... ................ 6 C. Balance of Payments , ,.. . 8 D. The Credit System ,,,. ., ............ .... 9 E. Employment, Income Distribution, Prices and Wages 11 Population ... . ....................... 11 Labor Force .. ., ................. 12 Urbanization *..., ..,,.,,,,.. . . 13 Modern Sector Employment . .. 13 Wages and Prices .,,,. . ................... 15 III. DEVELOPMENT POTENTIAL AND PROBLEMS .16 A. Livestock ...a........ ............ 16 Supply Limitations .. . 17 Returns from Livestock , .......... 18 Development Strategy ....... .20 B. Cotton and the Agricultural Sector. 20 The Productivity Program ..................... 21 Returns to Producers ,. 22 Returns to the Government . .26 Economic Returns , ............ 27 C. Traditional Agriculture ......................... 28 Chart IBRD-7366 .. .................... , , 31 TV, DEVELOPMENT ICONSTRATNTS ............. 32 A. Human Resources ..-..33 Public Sector Distribution of Benefits .34 B. Public Finances ; 37 The Public Savings Gap . .37 The Fiscal Reforms .:.::s -- 39 Financing the Deficit ... 41 The 1972 Bud-et,, . .. . ...- 42 C. The Critical Role of Transport ,................. 43  TABLE OF CONTENTS (Cont'd) V. PLANNING AND GROWTH PROSPECTS ........................ 47 A. The First Development Plan, 1966-70 . .47 B. Chad's Ten-Year Develo:ment Plan, 1971-80. 49 Plan Magnitudes . .50 The Relevance of the Macroeconomic Projection . 52 Priorities and Investment Allocations . .53 Policy Options . .55 C. The Process of Planning and Plan Implementation 55 Needed Reforms ..................... . 56 D. Growth Prospects ........................... 57 VI. FINANCING PROSPECTS AND AID OUTLOOK ----,,,n60 A. Domestic Contribution--61 B. Projected Public Savings . .62 = FExtyernal Fin2nce . .. ............... ,64 D. Problems of Development Financing . .65 TABLES 1. GDP Estimates by Major Sectors, 1968-71 4 2. Foreign Trade, 1968-71 7 3. Balance of Payments 8 4. Ban.kin.g Syste.. C1-.i.mS or. - the Tresur aso De r 3L ,I 5. Returns on Cotton 23 6s. Cots an-' Reven ........ues of th e lo--on Program 19764/65 - 1 971 / 25 7. Chad Budget 1964-71 38 n. Fr.zncing the Budgetary De fcit. 41 9. Public Investment Targets of Second Plan 197j1-80 by UrogramLU ar.d 'ectors 51 10. Plan: Value Added Projections 1970-80 52 11 . GDPJ Forecast andU GrowtL Rates 58 12. Macro-Economic Objectives 1971-78 60 |. n LerLa ruD'Lic Financing, 19106o6-70 1S A xtTernCa' Ai64 CrMArnTOmT,'A T ADDCThTThTV Olnl~ ~