Chad’s Government and Business Environment

When Chad became a sovereign state in 1960, it had numerous social, political, and economic problems. The French colonial power had done little to enhance political collaboration, cross-cultural perception, and economic interdependence. The country had a small number of known resources, poor communication systems, and its population had a diverse political tradition, socio-cultural patterns, and differing regional and ethnic loyalties. Despite these challenges, the government of Chad in the past had various strategies and planned to match the contemporary world, but what has been attained does not match the expectations. Chad, one of the most potential low developed countries, has numerous opportunities that, when fully utilized, they would eradicate its political, social, and economic difficulties (Handleman, 2011).

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The country has enormous agricultural potential followed by advancement in national reunion and reconciliation with Sudan, and finally, it is in a strategic position favoring it as transit zone in Central Africa and can be a linking point in the north-south trans-African corridor connecting Tripoli in Libya and Cape Town in South Africa. The government of Chad ought to effect reform strategies in order to take advantage and strengthen its opportunities and attend to the country’s main constraints, such as insufficient infrastructure and poor governance (Samuel, 2011). Pertaining to governance, the government should strive to reinforce accountability and transparency in the running of public finance and promote the business atmosphere in the private sector. As regards infrastructure, the government should emphasize on diversification of the private sector through expanding road network, electricity, rural community water, and telecommunication (Griffiths, 2011).

For prolonged and sustainable regional peace to prevail, radical changes in the Chadian government, which is characterized by the rule of the gun must be eradicated. Instead of negotiating with the rebel groups, the government has continued to opt for military confrontations. It has failed to address the root causes of the disagreements and instead, it has invented means of combating coup attempts. In so doing, the Chadian government has ended up wasting resources and funds in the seemingly never ending military build up rather than investing it in the much needed development programs (Handleman, 2011).

There have been political negotiations that have played a major role in offering lucrative positions such as rebel generals and political strongmen to avoid conflicts and wars. Over the last ten years, Chad has been faced with persistent conflicts leading to a state of instability. This has rendered the political stability index of Chad weaker than the average of sub-Sahara African countries. For instance, there has been constant conflict between the armed political groups stationed in the Sudanese Darfur region in the east of the country and the government. In February 2008, an attempted coup resulted in numerous decapitated and hand bound bodies of the rebels floating on chari river, which runs next to the capital city of N’Djamena (Handleman, 2011). The latest attack that occurred in May 2009 was resisted by government forces. In order to strengthen peace, the Chad government should initiate dialogue with Sudan under the patronage of the African Union. It should also initiate national reconciliation with the armed groups and opposition parties (Griffiths, 2011).

Agriculture and stock breeding were the dominant activities in Chad before the beginning of 20th century when oil production was established in the southern part of the country. Despite the agricultural potential of Chad, it was relegated and oil production became the main national resource constituting 46% of the GDP, with the agricultural sector accounting for only 19% of the GDP from the initial 36%. Currently, the oil sector commands 80% of all employment opportunities in the country and has enabled the country to realize an increased Foreign Direct Investment (FDI). However, there has been a notable decline in oil production emanating from unexpected water seepage into the wells (Samuel, 2011). This has necessitated the need to explore other sectors of the economy particularly the agricultural sector, which still commands a significant long term potential for the economy. Diversification of the growth oriented agricultural sub sectors which include livestock, cotton, fisheries, shea butter, tubers, gum Arabic, and fruits could contribute heavily in creating employment opportunities in non oil private sector. This initiative could save the food crisis problem experienced constantly in the country and provide the much needed funds for rehabilitation of the basic infrastructure (Griffiths, 2011).

Chad does not meet the standards of the average sub-Sahara African countries when it comes to accountability, rule of law, effectiveness, and the discernment of corruption. Its public finance is characterized by weak methods of supervising national resources and low savings. Furthermore, its public procurement management does not promote transparency (Samuel, 2011). The government should therefore aim at strengthening the public financial management tools which include payroll management, statistics debt among others as well as enhancing public procurement organizations and regulatory structures. The government should also establish a national anti-corruption plan based on a joint analysis by the stakeholders who include the private sector and the civil society. However, Chad’s intricate security context, insufficient incorporation of sectoral policies, and incompetence in procedures hinder the attainment of a long term vision in a transparent civic financial Management (Handleman, 2011).

Chad, like the other sub-Sahara African countries offers a relatively unattractive business climate for the private sector. This is attributed to various factors which include frequent insecurity, insufficient legal structures and judicial systems, delayed bill’s payments, accrued arrears by state enterprises administrative formalities and difficulties in securing credit. In order to improve the business climate in Chad, the government should implement laws that establish national venture and exports promotion agency. Such laws will promote modernization of customs, incentives, and tax together with other private venture motivation and encourage public/private affiliation. Apart from the laws, the government should establish stable discourse within itself and the private sector to promote understanding of the objectives of the sectors in order to include them in national policies and enhance cohesion. It should further simplify the customs and taxation systems in order to promote its resources and eliminate aspects that facilitate corruption and fraud. For better transparency and just competition amid all economic operators, the government should prioritize public procurement reforms (Michael, 2009).

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This study draws on the opportunities and strengths available to Chad as a country to overcome the challenges and weaknesses in attaining essential infrastructure and promoting excellent governance. The proposed interventions will play an important role in encouraging diversified and unrelenting growth that is appropriate for private sector development. Most vital is the proposal that would guarantee sustained peace and eliminating the authoritarian governance, corruption, political patronage, greed for power, and state flaws that render Chad intrinsically unstable.

References

Griffiths, R. (2011). Developing World 11/12: 2011 custom edition. New York: McGraw-Hill

Handelman, H. (2011). The challenge of Third World development: 2119 custom edition. Boston, MA: Longman – Pearson Custom Publishing.

Michael,P.(2009).A State in Disarray: Conditions of Chad’s Survival. Colorado: Westview Press

Samuel,D.(2011).Historical Dictionary of Chad. New York: McGraw-Hill

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