RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/174 
11 December 2006 
 (06-5830) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
CHAD 
 
  
 
This report, prepared for the first Trad e Policy Review of Chad, has been drawn 
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as 
required by the Agreement establishing  the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Chad on its trade policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Mrs Catherine Hennis-Pierre (tel.:  022/739 56 40;  fax:  022/739 57 65) or 
Mr Jacques Degbelo (tel.:  022/739 55 83). 
 
Document WT/TPR/G/174 contains the policy statement submitted by Chad. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
 session of the meeting of the Trade Policy Review Body on Chad.   Chad WT/TPR/S/174 
 Page iii 
 
 
  CONTENTS 
 
  Page 
SUMMARY OBSERVATIONS vii 
(1) E CONOMIC ENVIRONMENT  vii 
(2) T RADE AND INVESTMENT REGIMES  viii 
(3) T RADE POLICY INSTRUMENTS  viii 
(4) S ECTORAL POLICIES  ix 
(5) T RADE POLICY AND TRADING PARTNERS  xi 
I. ECONOMIC ENVIRONMENT 1 
(1) M AIN FEATURES OF THE ECONOMY  1 
(2) R ECENT ECONOMIC DEVELOPMENTS  4 
(3) T RADE AND INVESTMENT PERFORMANCE  6 
(i) Trade in goods and services 6 (ii) Direct investment 8 
(4) O
UTLOOK  8 
II. TRADE AND INVESTMENT REGIMES 10 
(1) I NSTITUTIONAL FRAMEWORK  10 
(2) T RADE POLICY FORMULATION AND IMPLEMENTATION  12 
(3) M AIN LAWS AND REGULATIONS  14 
(4) T RADE POLICY OBJECTIVES  15 
(5) T RADE AGREEMENTS AND ARRANGEMENTS  16 
(i) World Trade Organization (WTO) 16 (ii) Regional Agreements 17 
(iii) Other agreements and arrangements 20 
(6) I
NVESTMENT REGIME  21 
ANNEX II:1:  TRADE-RELATED TECHNICAL ASSISTANCE 23 
(1) S UPPLY -SIDE CONSTRAINTS  23 
(2) I MPLEMENTATION OF AGREEMENTS AND POLICY FORMULATION  23 
(3) I NTEGRATION OF TRADE IN DEVELOPMENT STRATEGIES  24 
III. ANALYSIS OF TRADE POLICIES AND PRACTICES BY MEASURE 25 
(1) I NTRODUCTION  25 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  25 
(i) Trader registration 25 (ii) Customs procedures 26 
(iii) Taxes collected by Customs 28 
(iv) Rules of origin 35 (v) Import prohibitions, licences and controls 36 WT/TPR/S/174 Trade Policy Review 
Page iv 
 
 
   Page 
 
(vi) Contingency measures 37 
(vii) Standards and other technical requirements 37 
(viii) Government procurement 39 (ix) Other measures 41 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  41 
(i) Procedures 41 (ii) Export taxes 41 
(iii) Export prohibitions, licences and controls 42 
(iv) Export subsidies, promotion and assistance 42 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  42 
(i) State trading, State-owned enterprises and privatizations 42 (ii) Incentives 44 
(iii) Competition policy and price regulation 44 
(iv) Intellectual property rights 45 
IV. ANALYSIS OF TRADE POLICIES AND PRACTICES BY SECTOR 50 
(1) I
NTRODUCTION  50 
(2) A GRICULTURE , LIVESTOCK , FISHERIES AND FORESTRY  50 
(i) Overview 50 
(ii) Agricultural policy 52 
(iii) Policy by sector 53 
(3) M INING , ENERGY AND WATER  58 
(i) Petroleum products 59 
(ii) Mineral products 61 (iii) Electricity 62 
(iv) Water 62 
(4) M
ANUFACTURING SECTOR  63 
(5) S ERVICES  64 
(i) Overview 64 
(ii) Transport 65 
(iii) Tourism 67 
(iv) Telecommunications 68 (v) Postal services 70 
(vi) Financial services 71 
(vii) Professional and business services 73 
 
REFERENCES 75 
 
APPENDIX TABLES   79 Chad WT/TPR/S/174 
 Page v 
 
 
  CHARTS 
 
Page 
 
I. ECONOMIC ENVIRONMENT 
 I.1 GDP growth rate and GDP per capita, 1993-2004 4 
 
II. TRADE AND INVESTMENT REGIMES 
II.1 Main entities involved in the development of trade and investment policy 13 
 III. ANALYSIS OF TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Escalation of Applied MFN Tariff Rates, 2006 32  
IV. ANALYSIS OF TRADE POLICIES AND PRACTICES BY SECTOR 
IV.1 New York cotton price, 1995-2005 55 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT 
I.1 Chad in figures, 1998, 2000 and 2003-2005 2 
I.2 Main economic indicators, 1999-2005 5 I.3 Balance of payments, 2000-2005 7 
II. TRADE AND INVESTMENT REGIMES 
II.1 Main trade and investment legislation, October 2006 14 
II.2 Notifications to the WTO, October 2006 17 
III. ANALYSIS OF TRADE POLICIES AND PRACTICES BY MEASURES 
III.1 Duties and taxes, 1995-2005 28 
III.2 DDI and CET, 2006 30 
III.3 Structure of MFN duties, 2006 30 III.4 Summary analysis of MFN tariff, 2006 31 
III.5 Summary of duty-free cer tificates granted in  2004 34 
III.6 Enterprises wholly or partially owned by the State, 2006 43 III.7 Subjects and terms of protection under the Bangui Agreement (1977) and its revision (1999) 46 
III.8 Chad and the intellectual property treaties administered by WIPO and by UPOV, 2006 47 
III.9 Fines and terms of imprisonment under the Bangui Agreement (1977) and its revision (1999) 48 
IV. ANALYSIS OF TRADE POLICIES AND PRACTICES BY SECTOR 
IV.1 Main agricultural products, 1998-2005 51 
IV.2 Chadian herd, 2003 53 
IV.3 The cotton sector, 1993, 1995, 2000-2006 56 
IV.4 Manufacturing output, 1993-2005 64 
IV.5 Number of arrivals at hotels and similar establishments, by origin, 1999-2003 68 IV.6 Telecommunication indicators, 2001-2005 69 
IV.7 Principal banks, 2006 71 WT/TPR/S/174 Trade Policy Review 
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APPENDIX TABLES 
 
Page 
I. ECONOMIC ENVIRONMENT 
 
AI.1 Structure of exports, 1995-2005 81 AI.2 Structure of imports, 1995-2005 83 
AI.3 Destination of exports, 1995-2005 84 
AI.4 Origin of imports, 1995-2005 85 
 
III. ANALYSIS OF TRADE POLICIES AND PRACTICES BY MEASURE  
AIII.1 Products subject to excise duties, 2006 86 
 IV. ANALYSIS OF TRADE POLICIES AND PRACTICES BY SECTOR 
 
AIV.1 Applied MFN tariffs by ISIC Rev.2 category, 2006 89  
 
 Chad WT/TPR/S/174 
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  SUMMARY OBSERVATIONS 
(1) ECONOMIC ENVIRONMENT  
1. Since independence in August 1960, 
Chad has experienced a succession of socio-
political crises which have impeded its 
economic and social development. About two thirds of the population live below the poverty threshold of US$1/day.  According to UNDP, in 2005 Chad ranked 173rd (out of 177 
countries) in the human development index.  In 
2001, it reached the decision point of the Enhanced Heavily Indebted Poor Countries Initiative but in October 2006 had not yet reached the Initiative’s completion point;  in 2004, its total debt of US$1.6 billion 
represented about one third of GDP.  In 
October 2006, its Poverty Reduction Strategy Paper was in process of being revised. 
2. The start of oilfield investment in 
2000, together with the surge in world prices 
after production began in 2003, enabled Chad 
to resume strong economic growth, with a real GDP growth rate of about 15 per cent on average over the period 2001-2005.  Under a 1999 law on the management of oil resources, some of the proceeds of their exploitation have 
been allocated to the fight against poverty, 
including an important communication infrastructure rehabilitation programme.  However, in 2005, despite the considerable increase in oil revenue, the budget (grants 
excluded) was still in deficit, to the tune of 
7.3 per cent of GDP.  Likewise, in the same year, because of a deterioration in the services and factor income balances associated with increased expenditure in the petroleum 
industry, the current account deficit remained 
high, at over 20 per cent of GDP.  These various factors, combined with the vagaries of the weather, contributed to sharp fluctuations in the inflation rate.  Moreover, the extremely 
high rate of turnover in senior, including 
ministerial, posts, the tax burden, with 40 per 
cent corporation tax and numerous indirect taxes, and the various practices which, in 2005, led Transparency International to classify Chad as the most corrupt country in the world have created an unfavourable 
business environment and more or less confined investment to the petroleum subsector.  In 2000, to encourage good 
governance, an anti-corruption law was 
adopted and several institutions, including the Ministry of State Control and Ethics, were established. 
3. The Chadian economy is traditionally 
based on agriculture (21 per cent of GDP), 
mainly livestock and cotton, and since 2003 on oil.  An output of about 160,000 barrels a day made it possible to double real GDP between 2000 and 2005.  However, since it has no refinery, Chad has had no choice but to export 
the crude and import refined products, at their 
current exorbitant prices, further inflated by the country’s land-locked situation.  Services activities, mainly trade and government services, accounted for about 27 per cent of 
Chad’s GDP in 2005.  Manufacturing and 
crafts activities remain confined to a few enterprises that serve the local market and contribute less than 5 per cent to GDP. 
4. The ratio of merchandise trade to 
GDP rose from 58 per cent in 2000-2001 to 
102 per cent in 2005-2006.  The sharp climb 
in the ratio was the resu lt of a tenfold increase 
in annual exports which reached €2.7 billion in 2005-2006.  Exports of cattle came second 
after crude oil but the trade is largely 
informal.  Cotton is the third biggest export.  
The main export destinations (including for most oil exports) are the United States, China and the United Kingdom.  Imports consist of machinery and transport equipment, 
medicines, food products and other consumer 
goods.  The European Union (chiefly France) is Chad’s foremost supplier.  The share of the African countries in Chad’s total trade remains small, although in actual fact that share is probably much bigger than the 
statistics suggest, since trans-border trade is 
to a large extent informal.  Imports of services relate to transport and insurance.  Exports are confined to income from travel and the services provided for foreign or international 
administrations established in Chad.WT/TPR/S/174 Trade Policy Review 
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(2) T RADE AND INVESTMENT REGIMES  
5. Trade policy falls within the 
jurisdiction of the Ministry of Commerce and Crafts, which is chiefly responsible for its 
formulation, evaluation and implementation 
and for issues relating to Chad’s participation in the WTO.  The Ministry is assisted, as appropriate, by other ministries and government agencies. 
6. Chad took over the status of GATT 
contracting party on 4 July 1963 and became a Member of the WTO on 19 October 1996.  It is not a party to any of the plurilateral agreements concluded under WTO auspices or to the agreements concluded since the end of 
the Uruguay Round.  It accords most-
favoured-nation (MFN) treatment as a minimum to all its trading partners.  Within the context of the WTO, the specific positions taken by Chad, one of the four co-sponsors of 
the Sectoral Initiative in Favour of Cotton, 
have been centred on that product. 
7. Chad has done little to fulfil its 
notification obligations an d its participation in 
WTO activities has been limited.  It has not yet notified its applied tariffs to the WTO’s 
Integrated Database (IDB).  The priority areas 
in which further technical assistance is required include the reform of customs procedures and tax collection at the border;  and capacity building as regards 
interpretation and implementation of the WTO 
Agreements and participation in the trade negotiations, including in the context of the Doha Development Agenda.  Since 2004, Chad has taken part in the revised Integrated 
Framework for Technical Assistance to LDCs.  
In October 2006, the diagnostic study carried out in this connection, which also involved an evaluation of Chad’s technical assistance needs, was in the process of being revised. 
8. Chad is a member of the Central 
African Economic and Monetary Community 
(CAEMC), whose common currency is pegged to the euro.  However, intra-CAEMC trade is still limited.  Although a Common External Tariff (CET) has been in place since the period of the ex-Central African Customs and 
Economic Union (CACEU) in 1993, the members of CAEMC have still to implement the customs union;  they are encountering 
difficulties in establishing a free trade area 
and in harmonizing a number of trade policy instruments.  For example, in general, the planned roll-back of tariffs on intra-CAEMC trade has not yet come into effect. 
9. As Chad has not yet adopted the 
CAEMC 1999 Community Investment Charter, only the ordinary-law regime provided for in its 1987 Investment Code is currently in force.  In practice, potential investors negotiate establishment agreements with the 
Government, with specified concessions being 
granted by arrêté (order).  Chad’s adoption of OHADA’s "uniform acts" in 1996 and the establishment of commercial courts in 2006 to rule on commercial disputes should lead to 
improvements in legal and judicial certainty.  
Company establishment procedures could be simplified by the effective implementation of "single windows". 
(3) T
RADE POLICY INSTRUMENTS  
10. With a few exceptions, the MFN tariff 
applied by Chad is based on the CAEMC CET.  
Its rates are all ad valorem and vary from zero to 30 per cent, with an average of 18.4 per cent. The tariff protection accorded to agricultural products (WTO definition) is 
higher (22.8 per cent) than that accorded to 
non-agricultural goods (17.6 per cent).  As defined by ISIC, agriculture remains the most protected sector (23.2 per cent), followed by manufacturing (18.1 per cent) and the 
extractive industries (11.4 per cent).  The tariff 
is characterized by mixed escalation due to the heavier protection for unprocessed agricultural products. 
11. Altogether, only 15.4 per cent of 
Chad’s tariff lines were bound during the 
Uruguay Round, at a ceiling rate of 80 per 
cent on agricultural products and 75 per cent on passenger motor vehicles, giving an average rate of 79.9 per cent.  Chad has bound "other duties and charges" at zero but Chad WT/TPR/S/174 
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  collects several on its imports.  These include , 
inter alia :  a statistical tax of 2 per cent;  a 
CAEMC Community integration tax of 1 per 
cent;  and a Community preference tax of 0.4 
per cent.  These various charges bring the 
simple average rate of total import duties and taxes to about 22.6 per cent.  Moreover, pre-
shipment inspection is required for most imports valued at CFAF 1 million or more and 
the fees (0.9 per cent of the f.o.b. value) are 
payable by the importer.  Chad has never resorted to contingency measures, for which it has no legislation. 
12. The main internal taxes collected by 
Customs are value added tax (VAT), at a rate 
of 18 per cent, and excise duties on numerous 
products.  These taxes account for a major share of government tax revenue.  In contrast to the treatment of local goods, the tax base for VAT on imports also includes excise duties. 
13. Customs procedures lack 
transparency and are lengthy and costly.  Chad does not apply the WTO Customs Valuation Agreement and maintains minimum import prices.  It has not applied prohibitions or import licensing for commercial purposes 
since 1995.  Imports are not, generally 
speaking, subject to technical standards or regulations.  Imports of animal and plant products must, in principle, be accompanied by sanitary or phytosanitary certificates, but it 
seems that these provisions are not being 
applied.  In particular, Chad has placed a general ban on the importation of live birds of any species or product thereof to prevent the spread of avian influenza, but this ban is not 
being strictly observed. 
14. In 1992, Chad introduced a 
programme to scale back State involvement in production, which has led to the winding up, putting out to concession or privatization of numerous previously unprofitable enterprises.  
For several State-owned enterprises private 
investors are still being sought.  Some essential goods and services continue to be supplied by inefficient monopolies in areas such as electricity, water and fixed telecommunications, and in the cotton sector.  
In principle, intellectual property is protected by the provisions of the revised Bangui Agreement, but these are applied only to a 
limited extent.  Chad does not have any 
competition legislation;  the prices of some goods and services are regulated.  In 2003, Chad introduced a new government procurement regime aimed at establishing 
transparent and competitive procedures for 
awarding public contracts. 
(4) S
ECTORAL POLICIES  
15. Today, Chad’s economy is dominated 
by the exploitation of its oil resources, ahead 
of agriculture on which most of the population 
depends.  In 2002, pr oven hydrocarbons 
reserves were estimated at over 900 million barrels.  In October 2003, the Chad-Cameroon Petroleum Development and Pipeline Project based on the Doba oilfield 
recorded its first sales.  In 2005, oil exports 
generated income amounting to some US$2 billion, and total transfers to the State of revenue from these exports amounted to US$342 million.  Following the concession granted to a consortium of three foreign 
developers for the Doba project, the 
Government is now giving priority to concessions based on production sharing, with State participation in the capital, in order to maximize Chad’s share of the proceeds of the 
sale of these resources.  A new State-owned 
enterprise, the Chad Hydrocarbons Company, was set up in July 2006 to act for the Government in all oil-related activities, but as at October 2006 this company was not yet in 
operation.  Locally, the use of oil for energy 
purposes is still not widespread and wood-based fuels (firewood and charcoal) are Chad’s main source of energy.  Less than 2 per cent of the population has access to electricity.  As there is no refining capacity, 
Chad is entirely dependent on imports of 
petroleum products brought in by road from Nigeria and Cameroon. 
16. Agriculture, main ly livestock breeding 
and cotton growing, is an activity of vital WT/TPR/S/174 Trade Policy Review 
Page x 
 
 
importance for Chad.  For its development, 
agriculture has 39 million hectares of arable land available and extensive water resources, but only 2 million hectares are being 
cultivated and 30,000 hectares irrigated.  In 
general, Chad’s agriculture suffers from very low productivity, and the level of mechanization and input utilization is also very low.  In particular, the heavy taxation of 
agricultural imports is interfering with the 
proper functioning of the food product market.  Transport infrastructure problems are impeding the movement of produce and, combined with the heavy taxation, amplifying the price fluctuations between the harvest and 
bridging periods. 
17. Cotton contributes most of the value of 
agricultural exports but, since 1997, the sector has been in deep crisis and after having, at the beginning of the 1970s, been the largest cotton 
producer in the franc zone Chad is now one of 
the smallest.  The country produces seed cotton, as well as cotton fibre in the factories run by COTONTCHAD, the country’s cotton company, in which the State has a 75 per cent stake.  COTONTCHAD has monopolies on the 
purchase of seed cotton from the producers, 
on ginning and on marketing, including exports;  every year, it absorbs more than 40 per cent of the budget appropriations for the Ministry of Agriculture.  With the crisis, 
payments to the planters have fallen into 
arrears.  Within the WTO, Chad reserved its 
third party rights in connection with the Brazilian complaint concerning United States cotton subsidies.  Chad is probably the largest 
exporter of live cattle in Central Africa.  The 
turnover on cattle exports, which for the most part take place outside formal channels, is estimated at more than €200 million a year, placing them at the head of Chadian exports, oil excluded.  The groups concerned are 
economically vulnerable, which makes an 
appropriate trade policy all the more important.  The numerous levies, including those imposed at exportation, do nothing to encourage the development of the sector.  The 
equipment and sanitary inspection procedures 
in Chad’s slaughterhouses reportedly conform to international standards;  the main problems with exporting the meat appear to be those 
connected with the high cost of air transport. 
18. The chief manufactures are a few 
agri-food products, in particular, meat, sugar, 
beer and bakery products, together with 
corrugated iron, soap, paper, and bicycle assemblies.  The irregular supply of expensive power and water, the poor quality and high cost of transport and communications services 
and the difficulties in obtaining access to other 
inputs (chiefly because of the high duties levied at the border) explain why the manufacturing industries, which produce mainly for the local market, are so few and 
relatively unprofitable.  Despite the almost 
complete absence of local production and the 
country’s almost total dependence on imports, most manufactured goods are subject to the maximum rate (30 per cent) for which the CET provides, which further reduces the already 
limited purchasing power of Chad’s 
population. 
19. The quality and density of Chad’s 
telecommunications services have increased since the introduction of mobile telephony in 2000.  However, the availability, quality and 
costs of basic fixed telecommunications 
services (including access to the Internet and international calls) are still less than satisfactory.  The privatization of the traditional operator, Sotel Chad, which has a 
monopoly on basic services, has been 
envisaged since 2001.  A 2005 decree specifies three operators for the mobile networks, including a subsidiary of the traditional operator, and five for the provision of Internet 
services, including the traditional operator.  
Postal services are a State monopoly with the possibility of outsourcing. 
20. The financial services subsectors, 
governed by the CAEMC common provisions, are open to foreign enterprises and capital but 
remain modest in size and make little 
contribution to the financing of production.  Since 2002, there has been a single accreditation system within the CAEMC for certified public accountants and certified 
accountants.  An agreement reserves road Chad WT/TPR/S/174 
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  transportation between Chad and Cameroon 
for nationals of the two countries, but, overall, the land transport services subsector operates on a largely informal basis.  Domestic air 
transport services are reserved for the 
national airline Toumaï Air Tchad, established in 2004 with Chadian private capital and 25 per cent State participation.  Restaurant and hotel services are the only categories in 
which Chad has made commitments under the 
GATS;  an extension of its commitments would enable Chad to make the regimes in the liberalized services categories credible and predictable. 
(5) T
RADE POLICY AND TRADING 
PARTNERS  
21. The fact that Chad started exploiting 
its oil resources just as world prices were about to take off is providing it with the means of addressing some of its main problems.  With 
the support of the international community, 
Chad now seems to be in a position to take up some of the challenges it faces and pursue initiatives such as the building of new roads and the upgrading of some of the existing infrastructure, a priority for a land-locked 
country.  However, it yet has to adopt concrete 
measures aimed directly at reducing poverty. 
22. The strategy developed to reduce 
poverty also depends on diversification of the economic base, with special emphasis on rural activities.  Diversification would be facilitated 
by the reform of the business environment, including the abolition of obsolete provisions and the simplification of restrictive 
administrative requirements and the system of 
taxation of imports and exports, in particular with regard to the number of duties and taxes and their rates.  These reforms would also make it possible to reduce the role of the 
informal sector in the economy. 
23. Chad would make its trade regime 
more predictable and credible if it were to improve its multilateral commitments by extending its tariff bindings to non-agricultural products, reducing the bound 
rates and strengthening its commitments under 
the GATS.  Trade reforms, including reform of the tariff and the introduction of a single entry system, within the CAEMC would bring the Community provisions more closely into line 
with Chad’s economic structure. 
24. The rapid introduction of trade 
reforms and the pursuit of structural reforms would create an environment that was both favourable for business and capable of attracting the capital which Chad needs so 
badly, in addition to its oil income, for its 
sustainable economic development and struggle against poverty.  Its trading partners could make a significant contribution to these efforts by providing the necessary assistance.