## Chad: IMF 48-month ECF Arrangement (source PDF 1tcdea2025001)

## Source details

**Canonical URL:** [Chad: IMF 48-month ECF Arrangement (source PDF 1tcdea2025001)](https://www.imf.org/-/media/files/publications/cr/2025/english/1tcdea2025001-source-pdf.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/cr/2025/english/1tcdea2025001-source-pdf.pdf.md)
- [Structured JSON version](/-/media/files/publications/cr/2025/english/1tcdea2025001-source-pdf.pdf.json)

---

### Program approval, access, and financing
- Executive Board approved a 48-month ECF arrangement for Chad in the amount of SDR 455.65 million (about US$625 million, or 325 percent of the country's quota).
- Immediate first disbursement equivalent to SDR 28.04 million (about US$38.5 million).
- Authorities requested the 48-month arrangement to meet about 30 percent of the external financing gap, estimated at about US$2 billion (or 9.1 percent of GDP).
- Consistent program parameters: access proposed at SDR 455.65 million, 325 percent of quota (or about US$640 million).
- Disbursement schedule (select entries preserved verbatim):
  - July 25, 2025 — Executive Board approval — 20.028.04
  - December 15, 2025 — end‑June 2025 performance criteria/completion of first review — 20.028.04
  - June 15, 2026 — end‑December 2025 performance criteria/completion of second review — 30.042.06
  - Total — 325.0455.65
- Program expected to catalyze additional financing: ECF ~30 percent, multilaterals ~27 percent, bilateral donors (primarily UAE and France) ~43 percent of financing needs.

### Program objectives and pillars
- Primary objectives:
  - Address protracted balance‑of‑payments needs and provide a policy anchor in a challenging environment.
  - Achieve macroeconomic stability and support high and inclusive growth.
  - Support implementation of the National Development Plan 2025-2030 (Chad Connection 2030).
- Program anchored on three pillars:
  - Ensure fiscal sustainability while creating fiscal space for key development projects.
  - Expand targeted social spending and develop an adequate social safety net.
  - Strengthen governance and the business climate to foster private sector development.

### Fiscal framework, targets, and consolidation strategy
- Key macro‑fiscal targets:
  - Aim to keep the non‑oil primary deficit (NOPD) below 5 percent of non‑oil GDP.
  - Facilitate return to regional deficit criterion of 1.5 percent of GDP over the medium term.
  - Keep debt below 33 percent of GDP (QPC).
- Staff recommended program-period fiscal adjustment of about 4.6 percent of non‑oil GDP (net of one‑offs) through:
  - Gradual increase in non‑oil revenues of 1.8 percent of non‑oil GDP.
  - Streamlining of non‑priority spending of 2.8 percent of non‑oil GDP.
- Authorities’ 2025 fiscal plan highlights:
  - NOPD expected to fall to 6.8 percent of non‑oil GDP in 2025 from 9.7 percent in 2024.
  - Non‑oil revenues anticipated to rise by 0.8 percent of non‑oil GDP (0.3 percent tax policy, 0.3 percent administration, one‑offs).
  - Domestically financed primary spending projected to decrease by 2.1 percent of non‑oil GDP.

### Revenue mobilization: policy and administration measures
- Prior actions and measures:
  - Decrees establishing export and import duties of 5% on certain products and up to 10% on antimony, unprocessed copper, and electric engines (Prior Action).
  - E‑payment of taxes, fees and direct and indirect duties through banks and mobile telephone operators (Prior Action).
  - Close/suspend customs offices without e‑payment systems and ASYCUDA (Prior Action).
- Tax policy measures and estimated yields:
  - New export/import duties and specific taxes yielding an estimated total of 0.4 percent of non‑oil GDP over the program period.
  - Targeted taxes (tobacco substitutes, cosmetic hydroquinone) and updated taxable import values yielding an estimated total of 0.6 percent of non‑oil GDP.
- Revenue administration expected yields:
  - Digitalization measures expected to yield 0.8 percent of non‑oil GDP over the program horizon.
  - Specific measures include e‑invoicing (FEN), VAT reforms, VAT credit audit, API between tax/customs and mobile companies, and N'Djamena Pilot Center for Online Tax Services.

### Containment of non‑priority spending and wage bill measures
- Wage bill context:
  - Wage bill reached 6.5 percent of non‑oil GDP in 2024, up from 4.5 percent in 2018.
  - Program measures expected to yield 0.9 percent of non‑oil GDP over the program horizon.
- Specific wage‑bill measures (Prior Action / Structural Benchmarks):
  - Exchange of letters to suspend new hires in non‑priority sectors until end‑2026; suspend interministerial transfers except for education/health; condition numeric replacements on deletion acts/certificates (Prior Action).
  - IGF audits of budgetary implementation in 2026 and 2027 (Structural Benchmarks).
  - Remove “ghost workers” following biometric census (Structural Benchmark).
  - Publish yearly monitoring tables of automatic remuneration adjustments starting with the 2026 budget law (Structural Benchmark).

### Public investment and expenditure composition
- Capital expenditure trajectory:
  - Investment rising to 3.4 percent of GDP in 2025 and 4.7 percent in 2027, up from 1.7 percent in 2024.
  - Program target: domestically financed public investment moderated to ~4 percent of non‑oil GDP during program period; total capital spending sustained at average 8.8 percent of non‑oil GDP annually via concessional financing.
- Spending‑quality measures:
  - Reduce DAO (pre‑authorized spending) to less than 25 percent of primary spending by end‑2025, then to 15 percent by end‑2026 (IT / Prior Action to upgrade DAO module in SIGFiP).
  - Strengthen PFM via SIGFiP expansion, TSA strategy, Public Finance Monitoring Committee, quarterly TOFE publication, commitment and cash flow plans.

### Social inclusion, identification, and safety nets
- Food insecurity and humanitarian context:
  - Authorities estimate 2.4 million people affected by high food insecurity; cost CFAF 254 billion (US$422 million) this year.
  - Crisis scenario: additional 1 million people could fall into severe food crisis → total 3.4 million (18 percent of population); intervention cost CFAF 291 billion (US$483 million).
- Social protection targets and financing:
  - Expand Unified Social Registry (USR/RSU) coverage toward 2.4 million individuals nationally; government direct funding start at US$5 million in 2026 Budget and grow by ~US$2.5 million yearly (IT start end‑December 2025).
  - School feeding: CFAF 500 million allocated in 2025 Budget; ambition to incrementally increase yearly CFAF 500 million to reach ¼ of yearly needs for targeted 8 provinces by end of ECF (IT start end‑December 2025).

### Governance, extractives transparency, and public banks
- Governance commitments:
  - Authorities requested an IMF Governance Diagnostic (GD) (FY2026).
  - Publish audit on oil revenues and implement a visualization system; publication by end‑November/December 2025 (Structural Benchmark / Prior Action progress).
  - Publish procurement contracts and beneficial owners for extractive sector; implement asset declaration regime for oil sector.
- Public banks and restructuring:
  - Finalize restructuring plans for systemic public banks (BCC, CBT) in 2025; CFAF 100 billion (0.8 percent of GDP) included in 2025 budget for recapitalization and restructuring.
  - Divestment plans for two smaller public banks (BAC, BHT): submit restructuring and sale plans to COBAC by December 2025 (Structural Benchmark).

### Macro outlook, projections, and scenario numbers
- Growth and inflation:
  - Real GDP growth: "3.5 percent in 2024"; "GDP is expected to grow by 3.3 percent in 2025."
  - Total non‑oil output: "4.2 percent in 2025."
  - Construction growth: "close to 7 percent" in 2025.
  - CPI inflation: projected "4 percent" in 2025 and "3 percent by 2028."
  - Non‑oil output growth: "3.5 percent in 2026 and 2027."
- Oil sector and revenues:
  - Oil production: "expected to fall by 0.7 percent in 2025, after falling by 1.2 percent in 2024."
  - Oil revenues projected to decline from "9.3 percent of non‑oil GDP in 2024 to 8.6 percent in 2025, stabilizing around 6 percent in the medium term."
  - Production increase: "increase production by more than 12 percent between 2026 and 2029."
- Artisanal mining:
  - Artisanal mineral extraction estimated around "3.8 percent of GDP in 2025."
  - Artisanal mining employment estimated at "around 300,000 people."
- Fiscal and financing trajectory:
  - Program aims to reduce fiscal deficit from 2.5 percent of non‑oil GDP in 2024 to 0.9 percent of non‑oil GDP by end‑2029.
  - Financing gap baseline: decline from 2 percent of GDP in 2025 to 0.7 percent in 2029 and to zero by 2030.

### Risk assessment: downside tilt and stress tests
- Main downside risks:
  - Intensified conflict in Sudan → increased refugee flows, higher food prices, fiscal pressures.
  - Further significant drop in oil prices → constrained activity and fiscal space.
  - Delays in reform implementation, shortfalls in donor financing, renewed regional treasury market tensions, climate disasters.
- Stress‑test calibrations (selected):
  - Oil shock illustrative impacts:
    - Fall of US$5 per barrel → exports fall by more than 1 percent of GDP per year, and 5.9 percent of GDP (about US$1.3 billion) over program period; government oil revenues fall by 0.6 percent of GDP per year on average in 2025-29; opens additional fiscal financing gap of 3.1 percent of GDP (about US$700 million) over the program period.
    - Fall of US$20 per barrel → exports fall by cumulative 23.7 percent of GDP (US$5.4 billion) in 2025-29; additional fiscal financing gap of 2.3 percent of GDP per year on average, and 11.5 percent of GDP (about US$2.7 billion) in total over program period.
  - DSA commodity price shock: one‑standard deviation decline in oil prices 2025‑2030 → 29 percent fall in oil price; key vulnerability.
  - Natural disaster module: one‑off shock of 10 pp of nominal GDP to external debt‑to‑GDP, -1.5 pp to real GDP growth, -3.5 pp to exports growth.

### Debt sustainability, safeguards, and repayment capacity
- Balance and projections (select figures preserved):
  - Total Debt 1/: US$6,045 (2024); US$6,549 (2025); US$7,142 (2026); US$7,637 (2027). Percent of GDP: 31.5 (2024); 31.8 (2025); 33.1 (2026); 33.6 (2027).
  - External 1/: US$3,056 (2024); US$3,444 (2025); US$4,125 (2026); US$4,774 (2027). Percent of GDP: 15.9 (2024); 16.7 (2025); 19.1 (2026); 21.0 (2027).
  - Multilateral and International Creditors 1/: US$1,283 (2024); US$1,533 (2025); US$1,855 (2026); US$2,310 (2027). Percent of GDP: 6.7 (2024); 7.5 (2025); 8.6 (2026); 10.2 (2027).
- Key debt composition notes:
  - Debt owed to Glencore: 6.2 percent of external debt at end‑2024; reprofiling reached in November 2022 (no NPV haircut).
  - Multilateral creditors (including IMF PRGT) account for sizable shares; IMF PRGT exposure figures listed in Annex III.
- DSA conclusion and judgment:
  - Debt remains sustainable in program‑based baseline but "the risk of debt distress remains high."
  - DSA uses standard and tailored stress tests; judgment applied to keep risk of external debt distress at "High."
- Fund repayment dynamics and obligations (selected):
  - Outstanding IMF credit based on existing and prospective drawings (SDR millions): 476.4 (2025); 499.8 (2026); 534.9 (2027); 572.0 (2028); 563.6 (2029).
  - Percent of quota (outstanding IMF credit): 339.8 (2025); 356.5 (2026); 381.5 (2027); 408.0 (2028); 402.0 (2029).

### Program monitoring, QPCs, ITs, and structural benchmarks (select figures)
- Monitoring framework: continuous PCs, semi‑annual QPCs, quarterly ITs, structural benchmarks (SBs).
- QPCs (selected figures from Table 7, preserved as in source):
  - Ceiling on new external arrears of the government and non‑financial public enterprises: 1 000000
  - Ceiling on contracting or guaranteeing new non‑concessional external debt by the government and non‑financial public enterprises: 1 000000
  - Floor on non‑oil primary budget balance (NOPB): -301-507-728-142-290-709
  - Floor on government tax revenue, excluding tax revenue from oil companies: 4366508762345061016
  - Ceiling on wages and salaries: 332505678167340693
- Indicative Targets (select):
  - DAO (Percent of primary spending): 302825232015
  - Ceiling on stock of domestic payment arrears: 184179174172169167
  - Floor for social spending on cash‑transfers and school feeding programs: 0.50.91 .83.6

### Public financial management, data, and capacity development
- PFM measures and sequencing:
  - Amend DAO module in SIGFiP to enforce sequestration (Prior Action).
  - Establish Public Finance Monitoring Committee (SFP) and publish quarterly TOFE (Periodic Structural Benchmark).
  - Centralize debt units under Head of Treasury; produce treasury/cash plans and debt management strategy (Periodic Structural Benchmark).
  - Advance TSA strategy: close unused accounts and interface SIGFiP with AMS/X.
- Data and statistics:
  - Chad classified as Data Adequacy Assessment case “C” (deterioration from “B”).
  - BEAC published BoP data 2016–2022; mining/mineral activity incorporation and reconciliation ongoing (Annex II).
- Capacity Development (CD) strategy:
  - CD spending planned US$1.7 million for FY26.
  - CD priorities: PFM, revenue administration, expenditure control, debt management, national accounts statistics.
  - CD projects and budgets (selected Table V.1 items with exact figures):
    - PFM: Projects in Execution: 8; Total Budget (Mio. USD): 3.1.
    - Revenue Administration: Projects in Execution: 4; Total Budget (Mio. USD): 2.8.
    - Expenditure Control: Projects in Execution: 2; Total Budget (Mio. USD): 0.3.
    - Debt Management: Projects in Execution: 2; Total Budget (Mio. USD): 0.3.
    - Statistics: Projects in Execution: 6; Total Budget (Mio. USD): 1.0.

### Implementation record, lessons learned, and program design implications
- Historical ECF engagement:
  - ECF 2014–2017 (SDR 79.94 million → augmentations); ECF 2017–2020 (SDR 224.32 million); ECF 2021–2024 (SDR 392.56 million).
  - Implementation disrupted repeatedly by large external shocks (oil‑price collapse 2014–17, COVID‑19 2017–20, regional shocks and political transition 2021–24).
- Key lessons summarized:
  - Embed flexibility and contingency planning (e.g., oil adjustors, shock clauses).
  - Tailor structural conditionality to administrative capacity and support with technical assistance.
  - Enhance ownership via incentives and alignment with domestic reform programs.
  - Address debt vulnerabilities decisively and early.
  - Protect and better target social spending; build track record outside program engagement.
  - Focus conditionality on a limited set of high‑impact reforms with CD support.

*Source: IMF Executive Board decision and IMF staff report excerpts, MEFP, TMU, Annexes, and Letter of Intent (excerpts as provided in the supplied content).*

### 455.65 million (about US$625 million or 325 percent of quota) for Chad. The Board’s

### Chad: IMF 48-month ECF Arrangement (Executive Summary)

### Program approval and financing
- The Executive Board approved a 48-month ECF arrangement for Chad in the amount of SDR 455.65 million (about US$625 million, or 325 percent of the country's quota).
- The Board’s decision allows for an immediate first disbursement equivalent to SDR 28.04 million (about US$38.5 million).
- The authorities requested a 48-month arrangement to meet about 30 percent of the external financing gap, which is estimated at about US$2 billion (or 9.1 percent of GDP).
- Consistent with program parameters, access is proposed at SDR 455.65 million, 325 percent of quota (or about US$640 million).

### Program objectives and pillars
- Primary objectives:
  - Address protracted balance-of-payment needs.
  - Achieve macroeconomic stability.
  - Support high and inclusive growth and implementation of the National Development Plan 2025-2030.
- Program is anchored on three pillars:
  - Ensure fiscal sustainability while creating fiscal space for key development projects.
  - Expand targeted social spending to lift development outcomes and address widespread poverty.
  - Strengthen governance and the business climate to foster private sector development.

### Fiscal policy and measures
- Key fiscal priorities and measures highlighted:
  - Mobilize non-oil revenues through:
    - Targeted tax increases.
    - Streamlining tax exemptions.
    - Digitalization of tax administration.
  - Contain non-priority spending through:
    - Streamlining the wage bill.
    - Reducing the use of emergency spending procedures.
    - Strengthening public financial management and fiscal transparency.
- Steadfast implementation of fiscal reforms is emphasized as critical to create fiscal space for the National Development Plan while ensuring sustainability.

### Social inclusion and safety nets
- Program aims to support inclusion objectives by:
  - Increasing targeted social spending.
  - Developing a well-targeted and adequate social safety net.
  - Expanding biometric identification and the unified social registry as critical delivery mechanisms for effective social protection.

### Governance and transparency
- Governance reforms are prioritized, notably in the oil sector, to enhance transparency and accountability.
- Specific governance commitments and actions:
  - Authorities requested an IMF Governance Diagnostic.
  - Commitment to publish an audit on oil revenues.
  - Improve oversight of state-owned enterprises.

### Macroeconomic context, outlook, and risks
- Contextual challenges noted:
  - Humanitarian, climate, and security shocks.
  - Volatile oil prices and declining official development assistance.
  - Unprecedented influx of refugees from Sudan increasing social and humanitarian pressures.
  - Diminishing donor support and a continued funding squeeze.
- Risks to the outlook include:
  - Possible deterioration in regional conflicts.
  - Natural disasters.
  - Delays in the implementation of reforms.
  - Shortfalls in donor financing.
  - Oil shocks.
- Upside scenarios:
  - Sustained oil price increases.
  - More rapid domestic revenue growth that could help finance the budget and accelerate implementation of the National Development Plan, with positive effects on investment, growth, and social outcomes.

### Implementation and coordination
- The ECF arrangement is expected to catalyze additional external financing from development partners.
- An IMF mission held discussions with the authorities in N’Djamena during May 4-17, 2025.
- Senior IMF statement following the Executive Board emphasized the authorities’ commitment to macroeconomic stability and reform after the conclusion of the political transition in early 2025.

*Source: IMF Executive Board decision and Executive Summary (July 25, 2025; program documents dated June 26, 2025).*

### 7. Quantitative Performance Criteria (QPC) and Indicative Targets (IT)*under the ECF

### 7. Quantitative Performance Criteria (QPC) and Indicative Targets (IT)*under the ECF Arrangement, June 2025-Dec 2026

### Context and institutional background
- Chad is described as a fragile state with severe development challenges: ranked "190th out of 193 on the 2023 Human Development Index" and among the last two countries on the 2020 World Bank’s Human Capital Index.
- Governance and transparency indicators: scored "158th out of 180 on the 2024 Transparency International Corruption Perception Index."
- Humanitarian pressures:
  - "An additional 280,000 refugees have crossed the border since the beginning of the year, bringing the total number of Sudanese refugees and returning Chadians to around 1.3 million."
  - "UNHCR anticipates that an additional 200,000 refugees could cross the border this year."
  - UN humanitarian cost estimate: "US$700 million this year, of which only 10 percent is expected to be funded, compared to 30 percent last year."
- Political transition and reform agenda:
  - "Recent senatorial elections in February 2025 marked the end of the four-year long political transition."
  - The government approved the National Development Plan (NDP) "for the period 2025-2030 (Chad Connection 2030)" in Cabinet on "May 29, 2025."
- Historical program engagement and lessons learned:
  - The last three Fund-supported programs expired; program implementation was affected by major external shocks (oil-price collapse 2014-17, COVID-19 onset 2017-20, regional spillovers and political transition 2021-24).
  - Noted achievements: anchored macroeconomic stability, more prudent fiscal policies, three successive debt operations (HIPC completion in 2015, 2018 commercial restructuring, 2022 G20 Common Framework agreement), advances in public financial‑management, oil‑revenue transparency, and arrears clearance.
  - Key lessons for future program design:
    - embed flexibility and contingency planning;
    - tailor structural conditionality to administrative capacity and support with technical assistance;
    - enhance ownership via incentives and alignment with domestic reform programs;
    - address debt vulnerabilities early and decisively;
    - strengthen, protect, and better target social spending;
    - deepen governance and anti‑corruption measures;
    - build a track record outside program engagement.

### Recent economic developments (summary of key indicators and reforms)
- Growth and inflation:
  - "Real GDP is estimated to have grown by 3.5 percent in 2024."
  - "Inflation increased to 5.1 percent in 2024," with "food inflation of 8.1 percent."
  - Artisanal gold mining is now incorporated into GDP estimates (see Annex II referenced).
- Fiscal performance and consolidation:
  - "The non-oil primary deficit (NOPD) shrank by 1.8 percent of non-oil GDP in 2024 yet remained 1.9 percent of non-oil GDP above projections from the recent Article IV consultation."
  - Specific revenue shortfalls and exceptional spending in 2024:
    - SOE dividends shortfall: "0.3 percent of non-oil GDP."
    - Telecommunication license sales shortfall: "0.2 percent of non-oil GDP."
    - Humanitarian crisis spending: "0.4 percent of non-oil GDP."
    - Historical floods response: "0.5 percent of non-oil GDP."
  - Q1 2025 fiscal outcomes:
    - "The NOPD was 1.1 percent of non-oil GDP, 0.8 percent of non-oil GDP below projections."
    - Non-oil revenues exceeded expectations by "0.1 percent of non-oil GDP."
    - Domestically financed primary spending was "0.7 percent" below projections.
  - Structural fiscal reforms over the past 18 months:
    - Tax administration digitalization and capacity building: launched "e-tax platform", initiated "e-invoicing and e-reporting for VAT"; introduced "SYGUAR" and "FEN" e-invoicing; "e-payment of customs taxes starting in 2024"; established data-sharing between tax and customs.
    - Centralization of exemption authority within the Ministry of Finance; automatic renewal of tax exemptions ended.
    - Digitalization of public financial management: expansion of IFMIS ("SIGFiP") across provinces continues; full interconnection pending.
    - Governance of state companies: new laws ratified and an IMF-supported action plan defined.
    - Spending controls: decline in pre-authorized spending procedures (DAOs) after a presidential decree, but DAOs remain at a high level.
    - Public investment management and procurement: limited progress on PIMA weaknesses; "no progress in publishing central government procurement contracts, including information on awarded companies and beneficial owners."
- Fiscal and financing operations:
  - 2024 external and regional financing:
    - "Concessional loan from the Abu Dhabi Fund for Development (US$500 million or 2.5 percent of GDP)."
    - Direct sale of treasury securities to Afreximbank: "CFAF 50 billion (US$83 million, or 0.4 percent of GDP)."
  - Q1 2025 regional market reaccess:
    - Raised "CFAF 68 billion (US$112 million, 0.5 percent of GDP)" through T-bond sales by end-March 2025.
- External sector and reserves:
  - Current account: surplus narrowed in 2024 owing to lower oil revenues partly offset by growing gold exports; continued contribution to regional foreign exchange reserve buildup.
  - Exchange rate dynamics: CFA franc "weakened in the second half of 2024 before rebounding strongly in 2025."
- Banking sector measures:
  - Debt offset agreements for one systemic public bank: "CFAF 76 billion (US$125 million, 0.6 percent of GDP)," primarily funded through retained past tax receipts of "CFAF 68 billion (US$112 million, 0.5 percent of GDP)."
  - Recapitalization cost estimated "around CFAF 7.5 billion per bank," execution envisaged in 2026.
  - Agreements reached to divest from two smaller public banks, subject to COBAC review.
  - Improvement signs: reliance on BEAC refinancing declined by "about 30 percent"; five out of ten banks meet regulatory capital adequacy ratio.

- Selected fiscal ratios and flows from Text Table 1 (Percent of non‑oil GDP and related numbers; 2023 actual, Article IV, preliminary 2024, projections and Q1 2025 excerpts):
  - Total revenue and grants: "19.1 21.1 20.2 4.3 4.0" (table row shows multiple columns—preserve verbatim as in source).
  - Revenue: "18.5 19.1 18.0 3.7 3.6"
  - Oil: "11.5 9.7 9.3 1.9 1.7"
  - Non-oil: "6.9 9.4 8.7 1.8 1.9"
  - Grants: "0.6 2.0 2.1 0.6 0.4"
  - Expenditure: "20.9 21.2 22.7 4.8 3.8"
  - Current: "13.9 13.6 14.1 3.2 2.8"
  - Wages and salaries: "6.3 6.4 6.5 1.5 1.5"
  - Goods and services: "1.7 2.4 2.2 0.5 0.5"
  - Transfers and subsidies: "4.5 3.4 3.9 0.8 0.6"
  - Interest: "1.4 1.5 1.5 0.4 0.2"
  - Investment: "7.0 7.6 8.6 1.6 1.0"
  - Domestically financed: "5.9 5.1 5.7 0.8 0.4"
  - Foreign financed: "1.2 2.5 2.9 0.7 0.6"
  - Overall balance (incl. grants, commitment): "-1.8 -0.1 -2.5 -0.5 0.2"
  - Reference overall balance (CEMAC convergence criterion): "-4.5 -1.6 -3.0 0.0 0.0"
  - Non-oil primary balance (excl. grants, commitment): "-11.5 -7.8 -9.7 -1.9 -1.1"
  - Memorandum: Humanitarian and floods response "0.3 1.2"
  - Non-oil GDP levels: "9,232 9,969 9,969 10,748 10,748" (table notes explain comparability assumption).

### Outlook, projections, and key scenario numbers
- Growth and inflation projections:
  - "GDP is expected to grow by 3.3 percent in 2025."
  - Total non-oil output projected to grow "by 4.2 percent in 2025."
  - Construction growth expected "close to 7 percent" in 2025.
  - CPI inflation projected to fall to "4 percent" in 2025 and to "3 percent by 2028."
  - Non-oil output growth projected at "3.5 percent in 2026 and 2027."
- Oil sector and fiscal revenue projections:
  - Oil production: "expected to fall by 0.7 percent in 2025, after falling by 1.2 percent in 2024."
  - Capital expenditure projects: investment rising to "3.4 percent of GDP in 2025 and 4.7 percent in 2027," up from "1.7 percent in 2024."
  - Production increase: "increase production by more than 12 percent between 2026 and 2029."
  - Oil revenues projected to decline from "9.3 percent of non-oil GDP in 2024 to 8.6 percent in 2025, stabilizing around 6 percent in the medium term."
- Debt and financing outlook:
  - Debt sustainability: "debt remains sustainable in the program-based baseline, although the risk of debt distress remains high."
  - Key vulnerabilities: high dependence on oil sector revenues and reliance on external financing vulnerable to geopolitical risks and reductions in ODA.

### Risks (tilted to the downside) and upside scenario
- Downside risks highlighted:
  - "Intensified conflict in Sudan" with increased refugee inflows, higher food prices, and fiscal pressures.
  - "A further significant drop in oil prices" could constrain activity and fiscal space and open additional financing needs.
  - "Renewed tensions in the regional treasury securities market" could worsen financing conditions and cause liquidity stress.
  - Security incidents destabilizing Lake Chad region affecting agriculture and displacing people.
  - "More frequent and severe climate events, such as droughts and floods."
  - Delays in expanding access to education, health, energy, and water services could fuel social tensions.
  - Slow fiscal consolidation and structural reforms could derail program objectives.
  - "A decline in humanitarian aid could impact food security and cause social unrest."
- Upside scenario:
  - "Sustained oil price increases or more rapid domestic revenue growth" could finance the budget, enable strong NDP implementation, and improve investment, growth, and social outcomes.

### Program objectives and policy pillars (ECF arrangement focus)
- Main program objectives:
  - Support implementation of the 2025-2030 National Development Plan (NDP).
  - Provide a policy anchor in a challenging environment and act as a catalyst for financing the NDP.
- Program pillars:
  - Ensure sustainable fiscal policy and create fiscal space to finance key development projects.
  - Support inclusion objectives, "including an increase in targeted social spending to lift development outcomes."
  - Support improvements in governance and the business climate.
- Authorities’ NDP focal areas (program-aligned): the government’s NDP "is expected to focus on four key areas" (text indicates four areas but does not enumerate them in the supplied excerpt).

*Source: IMF staff report excerpt titled "7. Quantitative Performance Criteria (QPC) and Indicative Targets (IT)*under the ECF Arrangement, June 2025-Dec 2026" (excerpts and figures as provided in the supplied content).*

### 6.2 percent in 2023. The authorities estimate that 2.4 million people are being affected by high food insecurity, for a

### 1tcdea2025001-source-pdf - 6.2 percent in 2023. The authorities estimate that 2.4 million people are being affected by high food insecurity, for a

### Food insecurity: current impact and crisis scenario
- Authorities estimate 2.4 million people are being affected by high food insecurity, with a total cost (emergency food kits, child malnutrition prevention, food in kind, and support to agriculture) of CFAF 254 billion (US$422 million) this year.
- Crisis scenario (no further actions in 2025) developed by the authorities:
  - An additional 1 million people could fall into a severe food crisis, bringing the total to 3.4 million people, 18 percent of the population.
  - Cost of intervention would increase by about 15 percent to CFAF291 billion this year (US$483 million).

### Program alignment, objectives, and regional context
- The proposed Fund-supported program will align with authorities’ priorities: (i) infrastructure development, (ii) social policy and essential public services, (iii) economic and industrial development, and (iv) business climate improvement.
- Program aims:
  - Help meet balance of payments financing needs amid volatile and lower oil prices, unprecedented refugees and food security crises, diminishing donor support, and a funding squeeze.
  - Contribute to reducing debt vulnerabilities, in line with the new Poverty Reduction and Growth Trust (PRGT) Strengthened Policy Safeguards framework.
  - Support fiscal consolidation, financial sector policies, governance improvements, and human capital development, incorporating lessons from past programs.
- The program is embedded in a coordinated regional approach for CEMAC with common denominators: fiscal consolidation, governance improvement, enhanced social safety nets, fiscal transparency, and economic diversification.
- Communiqué from Heads of State (December 2024) commitments:
  - Continue fiscal consolidation through bilateral discussions with partners.
  - Regularly produce and disseminate reliable and comprehensive fiscal, economic, and financial data.
  - Reiterate commitment to the independence and capacity building of the BEAC and the COBAC.

### Fiscal policy and reforms: targets and framework
- Program aim: Anchor fiscal policy toward a return to the regional fiscal deficit criterion, while creating fiscal space for enhanced social safety nets and critical development projects.
- Fiscal framework and targets:
  - Aim to keep the non-oil primary deficit (NOPD) below 5 percent of non-oil GDP.
  - Facilitate a return to the regional deficit criterion of 1.5 percent of GDP over the medium term.
  - Keep debt below 33 percent of GDP (Quantitative Performance Criterion (QPC)).
- Authorities' 2025 fiscal plan:
  - Expected reduction of the NOPD to 6.8 percent of non-oil GDP in 2025, from 9.7 percent of non-oil GDP in 2024.
  - Non-oil revenues anticipated to rise by 0.8 percent of non-oil GDP through: tax policy measures (0.3 percent), tax administration reforms (0.3 percent), and one-off recoveries of past tax receipts.
  - Domestically financed primary spending projected to decrease by 2.1 percent of non-oil GDP, driven by:
    - Phase-out of emergency capital spending for flood defenses: 0.7 percent of non-oil GDP.
    - Non-recurrence of election-related spending: 0.3 percent of non-oil GDP.
    - Reduction in domestically financed investment: 1 percent of non-oil GDP (to be more than offset by a more sustainably-funded 2.8 percent of non-oil GDP in externally financed investment).
    - Measures to control the wage bill: 0.2 percent of non-oil GDP.
- Staff recommendation for program period:
  - Fiscal adjustment of about 4.6 percent of non-oil GDP (net of one-offs) through:
    - Gradual increase in non-oil revenues of 1.8 percent of non-oil GDP.
    - Streamlining of non-priority spending of 2.8 percent of non-oil GDP.
  - Support reforms to strengthen PFM, fiscal planning, and budget transparency.
  - Support measures to enhance contingency planning to mitigate oil price shock risks.

### Mobilizing non-oil revenues: tax policy and administration measures
- Rationale: Revenue mobilization is critical to provide fiscal space for development spending; non-oil tax revenue collection in Chad is among the lowest in the region.
- Tax policy measures (expected yields and commitments):
  - Increase export and import duties on certain products (excluding essential goods and nontaxed products) and on antimony, unprocessed copper, and electric engines (Prior Action), yielding an estimated total of 0.4 percent of non-oil GDP over the program period.
  - Targeted tax increases under the ECF arrangement:
    - Tax other tobacco and tobacco substitutes (shisha) and on cosmetic products with hydroquinone.
    - Update taxable values for import of agricultural products, milk, luxury goods, and some products harmful to health (Structural Benchmark), yielding an estimated total of 0.6 percent of non-oil GDP over the program period.
  - Review and streamline tax exemptions:
    - Authorities committed to publish a table with all tax incentives granted, including renewals and extensions, indicating relevant legal provisions, starting from 2026 (Periodic Structural Benchmark).
  - Broaden excise tax base to capture goods and services such as luxury goods, plastics, and fossil fuel products.
- Revenue administration measures (expected yields):
  - Digitalization measures expected to yield 0.8 percent of non-oil GDP over the program horizon.
  - Specific measures:
    - Implementation of e-payment of taxes, fees, and direct and indirect duties through banks and mobile telephone operators (Prior Action); close and suspend opening of customs offices and posts not equipped with an e-payment system and ASYCUDA (Prior Action).
    - Advance VAT reforms including VAT e-invoicing (MEFP ¶19); IGF to audit VAT credit stocks, secure agreement to clear VAT credits validated by audit, and enhance VAT refund mechanism (Structural Benchmark).
    - Implement standardized electronic invoicing (FEN) across the public sector to improve expenditure control, support formalization of public contractors, and enable risk-based desk audits (Structural Benchmark).
    - Improve taxpayer identification coverage via the national identification program; update tax legislation for digital taxpayers and tax administrations; implement a computerized API between tax division, customs division, and mobile companies (MEFP ¶19).
    - Establish N'Djamena Pilot Center for Online Tax Services (one-stop-shop) and evaluate/generalize it, in line with IMF technical assistance (MEFP ¶19).

### Streamlining non-priority spending: wage bill
- Wage bill developments:
  - The wage bill reached 6.5 percent of non-oil GDP in 2024, compared to 4.5 percent of non-oil GDP in 2018.
  - Increase driven largely by changes in average compensation, new military recruitments, and the reinstatement of civil servant benefits. 

*Source: 1tcdea2025001-source-pdf*

### 2016. The new ECF arrangement aims to foster more sustainable wage bill spending (QPC) while

### 1tcdea2025001-source-pdf - 2016. The new ECF arrangement aims to foster more sustainable wage bill spending (QPC) while

### Wage bill containment and civil service measures
- Program objective: foster more sustainable wage bill spending (QPC) while ensuring essential recruitments in priority sectors (health, education, security) are not constrained (MEFP ¶21).
- Measures expected to yield 0.9 percent of non-oil GDP over the program horizon (see Text Table 2).
- Specific measures:
  - i. Exchange of letters of the Minister of Finance with the Minister of Civil Service to: (i) suspend new hires in non-priority sectors, beyond the commitments made in the 2025 budget law, until the end of 2026; and (ii) suspend interministerial civil service transfers, except for agents joining education, higher education, or health ministries to work as teaching and health care provider; and (iii) limit numeric replacements (remplacement numérique) to cases with the submission of deletion (radiation) acts, and death and retirement certificates (Prior Action).
  - ii. IGF audits of budgetary implementation of these measures in 2026 and 2027 (Structural Benchmarks).
  - iii. Following the National Commission report on the Biometric Census of Civil Servants, ensure all “ghost workers” are removed from the payroll (Structural Benchmark).
  - iv. Publish yearly monitoring tables of automatic adjustments to remunerations in the annual budget law to ensure allowances and promotions are within defined budget ceilings, starting with the 2026 budget law (Structural Benchmark).
  - v. Start consultations on a public sector reform to ensure hiring of the most competent staff (e.g., national competition/exam) (MEFP ¶21).
  - vi. Closely monitor monthly wage bill execution data; any early slippages will trigger discussion on additional new measures for program conditionality in upcoming reviews (MEFP ¶21).

### Text Table 2 — Select fiscal balances, 2025–29 (key figures preserved as in source)
- Text Table 2 header: (In percent of non-oil GDP, unless indicated otherwise)
- Row labels and values (presented as in source):
  - Non-oil revenue: 0.73-0.140.300.160.111.171.79
  - Tax administration reforms:0.270.280.140.050.050.790.79
    - o/w E-payment of taxes, fees and duties:0.140.100.000.000.000.240.24
    - o/w VAT reimbursement mechanism:0.000.000.050.050.050.150.15
    - o/w Withholding customs tax for unregistered taxpayers:0.130.110.000.000.000.240.24
    - o/w Standard electronic invoicing across the public sector:0.000.070.090.000.000.160.16
  - Tax policy measures:0.250.420.160.110.061.001.00
    - o/w New export and import duties on non-essential goods:0.250.120.000.000.000.370.37
    - o/w Taxes on tobacco and cosmetic products:0.000.150.060.050.020.280.28
    - o/w New taxable values on imports of agricultural products:0.000.150.100.060.040.350.35
  - Other (incl. one-offs):0.22-0.850.000.000.00-0.630.00
  - Domestically financed primary expenditure:-2.16-0.72-0.28-0.27-0.28-3.70-2.77
    - Wages and salaries:-0.24-0.25-0.14-0.14-0.14-0.91-0.91
      - o/w Suspension of new non-priority hires:-0.24-0.100.000.000.00-0.34-0.34
      - o/w Limiting allowances and promotions to budget ceilings0.00-0.15-0.10-0.10-0.10-0.45-0.45
      - o/w Removal of ghost workers from payroll0.000.00-0.04-0.04-0.04-0.12-0.12
    - Goods and services:-0.08-0.06-0.05-0.05-0.06-0.30-0.30
    - Transfers and subsidies:-0.24-0.30-0.170.04-0.07-0.74-0.46
      - o/w Phasing out election spending:-0.280.000.000.000.00-0.280.00
      - o/w Streamlining taxes transferred to autonomous public entities0.00-0.10-0.11-0.05-0.03-0.29-0.29
    - Domestically financed investment:-1.61-0.110.08-0.110.00-1.75-1.10
      - o/w Phasing out floods-related spending-0.650.000.000.000.00-0.650.00
  - Non-oil primary balance change2.900.580.580.420.394.874.56
- Memorandum items:
  - Non-oil primary balance-6.8-6.2-5.6-5.2-4.8
  - Reference overall balance (in percent of GDP)-1.4-1.2-2.2-1.9-1.8
  - Total public debt (in percent of GDP)33.034.234.733.332.0

### Savings and expenditure-quality reforms beyond the wage bill
- Transfers and subsidies:
  - Transfers to independent and decentralized public entities grew from 2.1 percent of total revenues in 2022 to 4.2 percent of revenues in 2024.
  - Program supports review and streamlining of these transfers; expected savings of 0.3 percent of non-oil GDP over the program period (MEFP ¶21).
- Goods and services:
  - PFM reforms (reduce DAOs, digitalize public procurement) projected to reduce goods and services spending by 0.3 percent of non-oil GDP over the program horizon.
- Domestically-financed investment:
  - Surge from average 2 percent of non-oil GDP in 2018-22 to nearly 6 percent in 2023-24 was unsustainable.
  - Program target: moderate domestically financed public investment to a sustainable average of 4 percent of non-oil GDP during the program period (above 10-year average of 2.6 percent) to create fiscal space for the new NDP.
  - Facilitate mobilization of concessional project financing to sustain total capital spending at an average of 8.8 percent of non-oil GDP annually (compared with 2023-24 average investment levels of 7.8 percent of non-oil GDP).

### Public financial management and transparency measures
- Establish Public Finance Monitoring Committee (SFP) by decree to prepare and validate monthly, quarterly and annual government financial operations table (TOFE) (MEFP ¶22).
- Publish quarterly TOFE on accrual basis (Periodic Structural Benchmark) and develop quarterly commitment and cash flow plans (Periodic Structural Benchmark).
- Implement standardized electronic invoicing across the public sector (Structural Benchmark).
- Re-establish Expenditure Commitment Committee and operationalize Treasury Committee (MEFP ¶22).
- Centralize all four debt units under Head of Treasury; produce treasury/cash plans and debt management strategies to add to budget documents (Periodic Structural Benchmark).
- Implement accounting phase in SIGFiP by interfacing with financial authorities' IT systems (MEFP ¶22).
- Advance TSA strategy by closing unused bank accounts and working with Central Bank to establish TSA (MEFP ¶22).
- Provide Court of Accounts access to SIGFiP (Structural Benchmark).
- Upgrade DAO management module in SIGFiP to enforce sequestration for DAO regularization (Prior Action) to reduce DAOs to less than 25 percent of primary spending by end 2025, then to 15 percent by end 2026 (IT).
- Expand SIGFiP to enable comprehensive fully digitalized operational management of treasury and budgetary operations (MEFP ¶22).
- Develop robust three-year public investment plan, full implementation of SIGFiP for investment expenditures, and build a comprehensive database of public investment projects (MEFP ¶22).

### Shock resilience, oil-price vulnerability and contingency planning
- Oil shock illustrative impacts:
  - A fall of US$5 per barrel relative to baseline: exports fall by more than 1 percent of GDP per year, and 5.9 percent of GDP (about US$1.3 billion) over the program period; government oil revenues fall by 0.6 percent of GDP per year on average in 2025-29; opens additional fiscal financing gap of 3.1 percent of GDP (about US$700 million) over the program period.
  - A fall of US$20 per barrel: exports fall by cumulative 23.7 percent of GDP (US$5.4 billion) in 2025-29; leads to additional fiscal financing gap of 2.3 percent of GDP per year on average, and 11.5 percent of GDP (about US$2.7 billion) in total over the program period.
- Contingency planning:
  - Authorities included adverse scenario in NDP (real GDP growth 1.8 percent lower on average over NDP period under that scenario).
  - Contingency measures include canceling expenditure allocations (non-priority sectors), issuing revised budget with revenue-increasing measures, spending cuts, and seeking additional financing.
  - Program incorporates an oil adjustor: require submission of a revised budget law to adjust expenditures when impact of oil price decline on budgeted oil revenues is greater than or equal to 30 percent, starting with the 2026 budget law (Periodic Structural Benchmark and MEFP ¶24).

### Social inclusion, identification, and social safety nets
- Identification:
  - Only 39 percent of Chadians have a national identification (World Bank ID4D/Global Findex cited).
  - Program supports expansion of national identification coverage toward regional average of 80 percent by end of program; ensure connectivity and cross-checking across ID databases and regular updates (MEFP ¶28).
  - Third General Population and Housing Census mapping phase launched on April 11, 2025; third Census expected finalized in 2026.
- Social safety nets and cash transfers:
  - Chad spent average 2.8 percent of GDP (3.7 percent of non-oil GDP) on ministries in social sectors in 2019-23; 65 percent allocated to wages and salaries; budget did not allocate direct funding for cash transfers historically.
  - World Bank PSSNP: US$120 million IDA project for 2025-29 to widen USR and cash transfer program; USR initially had outdated info for 600,000 households, 15 percent updated at project start.
  - Authorities aim to expand coverage to about 2.4 million individuals nationally (MEFP ¶29-31).
  - Government direct funding to start at US$5 million in the 2026 Budget and grow by ~US$2.5 million yearly over program horizon (IT to start at end-December 2025) (Annex IV).
- School feeding:
  - CFAF 500 million allocated in 2025 Budget estimated to cover ~5 percent of yearly needs for targeted 8 provinces.
  - Ambition to allocate yearly increases of CFAF 500 million to reach ¼ of yearly needs for the targeted 8 provinces by end of the ECF (IT to start at end-December 2025) and possibly expand to other provinces (MEFP ¶32).

### Governance, extractives transparency, and public bank reforms
- Governance and transparency commitments:
  - Submit draft Settlement Law (Loi de Règlement) so Court of Accounts can certify final report and be granted access to SIGFiP (Structural Benchmark).
  - Strengthen provisions of General Regulation on Public Accounting and propose amendment to some provisions of the Tax Procedure Code and General Tax Code (Structural Benchmark).
  - Request IMF Governance Diagnostic (GD) in FY 2026 (MEFP ¶35).
  - Progress report to IMF staff on audit of oil revenues since 2020 and establishment of visualization system (Data Analytics) (Prior Action); publish audit and visualization system implementation by end-November 2025 (Structural Benchmark).
  - Publish procurement contracts with firms operating in extractive sector (MEFP ¶36).
  - Implement asset declaration regime for oil sector in line with EITI/G20 principles (MEFP ¶36).
  - Establish competitive procurement for fuel and electricity provision contracts (MEFP ¶36).
- Public banks:
  - Finalize restructuring plans for both systemic public banks in 2025 and complete debt offset agreements for one of them; CFAF 100 billion (0.8 percent of GDP) included in 2025 budget law for recapitalization and restructuring.
  - Key elements: tackle governance issues, reduce high NPL ratios, modernize IT and cybersecurity, streamline operating costs, improve liquidity management.
  - For two smaller public banks, authorities discuss divestment with private investors; submission of restructuring and sale plans to COBAC by December 2025 (Structural Benchmark, MEFP ¶33).
  - A regional FSAP recommended to identify weaknesses and provide recommendations.

### Program modalities, financing, and disbursement schedule
- Balance of payments financing gap: estimated US$2 billion throughout the program.
- Arrangement: 48-month ECF with access of 325 percent of quota (SDR 455.65 million); would cover ~30 percent of estimated financing gap.
- Program aims to reduce fiscal deficit from 2.5 percent of non-oil GDP in 2024 to 0.9 percent of non-oil GDP by end-2029.
- Financing gap trajectory under baseline: decline from 2 percent of GDP in 2025 to 0.7 percent of GDP in 2029 and to zero by 2030.
- Disbursement schedule (Text Table 4 — Availability Date / Conditions for Disbursement / Amount (Percent of Quota) / Amount (Millions of SDRs)):
  - July 25, 2025 — Executive Board approval of the ECF arrangement — 20.028.04
  - December 15, 2025 — Observance of the performance criteria for end-June 2025 and completion of the first review under the arrangement — 20.028.04
  - June 15, 2026 — Observance of the performance criteria for end-December 2025 and completion of the second review under the arrangement — 30.042.06
  - December 15, 2026 — Observance of the performance criteria for end-June 2026 and completion of the third review under the arrangement — 40.056.08
  - June 15, 2027 — Observance of the performance criteria for end-December 2026 and completion of the fourth review under the arrangement — 40.056.08
  - December 15, 2027 — Observance of the performance criteria for end-June 2027 and completion of the fifth review under the arrangement — 40.056.08
  - June 15, 2028 — Observance of the performance criteria for end-December 2027 and completion of the sixth review under the arrangement — 45.063.09
  - December 15, 2028 — Observance of the performance criteria for end-June 2028 and completion of the seventh review under the arrangement — 45.063.09
  - June 15, 2029 — Observance of the performance criteria for end-December 2028 and completion of the eighth review under the arrangement — 45.063.09
  - Total — 325.0455.65
- Program financing composition and catalytic role:
  - ECF expected to cover ~30 percent of financing needs.
  - Multilaterals expected to cover ~27 percent of financing needs.
  - Bilateral donors (primarily UAE and France) expected to cover ~43 percent of financing needs (text notes prospective UAE and France bilateral support).
- Program monitoring: continuous performance criteria (PCs), semi-annual quantitative performance criteria (QPCs), quarterly indicative targets (ITs), and structural benchmarks (SBs). QPCs include non-oil primary balance floor, non-oil revenue floor, and ceiling on wages and salaries. ITs include ceilings on net domestic government financing, stock of domestic payment arrears, DAO use as share of non-wage civilian primary spending, and floors on cash transfers, school feeding spending, and number of provinces covered by USR. Adjustors to QPCs and ITs depending on oil sector performance (TMU).

### Financing needs and sources — Text Table 5 (select lines preserved exactly)
- Text Table 5 header: (CFAF, billions)
- Selected rows as presented in source:
  - Financing Needs2421247925602696278819.418.918.618.518.0
  - Current account deficit (excl. oil exports)2319238424332557267518.618.217.617.517.3
  - Amortization of PPG External Debt12260101108871.00.50.70.70.6
  - Net change in reserves-2035263126-0.20.30.20.20.2
  - Financing Sources2175209922302536267917.516.016.217.417.3
  - Oil exports2004193319862091217516.114.814.414.314.1
  - Capital Account3423984364194602.73.03.22.93.0
  - Financial account-171-231-1922544-1.4-1.8-1.40.20.3
  - Financing Gap2463793311601092.02.92.41.10.7
  - Additional Financing Sources2463793311601092.02.92.41.10.7
  - Multilateral budget support70737358580.60.60.50.40.4
  - Bilateral budget support131227167001.11.71.20.00.0
  - Prospective IMF ECF457991103510.40.60.70.70.3
  - Residual Gap000000.00.00.00.00.0

### Program risks, safeguards, and capacity considerations
- High risks: oil-price decline, weakened reform commitment, climate shocks, shortfall in donor financing, regional security deterioration.
- Mitigation via proposed reforms: fiscal consolidation, governance reforms, increased non-oil revenues, streamlined non-priority spending, strengthened debt management.
- Strengthened Policy Safeguards for PRGT triggered due to cumulative access path (PRGT cumulative access peak at 408 percent of quota in 2028); strengthened safeguards 2 and 3 triggered per 2024 PRGT review guidance.
- Chad’s capacity to repay Fund assessed as adequate but subject to significant risks; Fund staff emphasizes fiscal adjustment and governance reforms.
- Firm commitments in place for first 12 months of program; program fully financed for initial period with good prospects for remainder. Authorities working to resolve outstanding bilateral and commercial arrears (as of end-March 2025 arrears remain with four official bilateral and one commercial creditors).

*Source: IMF staff estimates, MEFP, and supporting tables and notes from the provided content.*

### 0.02 billion above the target set for this date at EUR 5.0 billion. Additionally, the average January–

### CHAD

### Recent NFA outcomes
- 0.02 billion above the target set for this date at EUR 5.0 billion.
- NFA level was EUR 5.97 billion, EUR 1.47 billion above the target set for this date at EUR 4.5 billion.
- Additionally, the average January– (fragment as in source).

### Policy assurances and targets
- Staff has proposed updated policy assurances on NFA accumulation:
  - bring NFA to average EUR 5.5 billion during March-June 2025
  - bring NFA to average EUR 5.75 billion during October-December

### Key statistics
- EUR 5.0 billion (target referenced)
- 0.02 billion (reported exceedance)
- EUR 5.97 billion (NFA level)
- EUR 1.47 billion (amount above the target)
- EUR 4.5 billion (target referenced)
- EUR 5.5 billion (proposed average target, March-June 2025)
- EUR 5.75 billion (proposed average target, October-December)

*INTERNATIONAL MONETARY FUND 27 March 2025*

### 2025. To meet these targets, it is essential for member states to implement offsetting policy

### 1tcdea2025001-source-pdf - 2025. To meet these targets, it is essential for member states to implement offsetting policy

### Regional policy assurances and external/financial stability
- Regional policy assurances (RPA) on regional NFAs and on financial stability are described as critical for the success of Chad’s program and for bolstering the region’s external and financial sustainability.
- Staff supports a 48-month arrangement under the ECF, with access of SDR 455.65 million (325 percent of quota), based on program policies and reforms, prior actions, and expected catalyzation of additional budget support and donor funding.

### Safeguards assessment and central bank governance
- Implementation of safeguards recommendations from the 2022 BEAC assessment and a follow-up monitoring mission in 2023 has been limited.
- Recommendations included strengthening internal audit and risk management practices; improving governance arrangements (including onboarding of new senior management and Board members); and enhancing the delegation framework for executive management decision-making.
- Fund staff continue to follow up on these issues.

### Climate vulnerability, RST/RSF access, and diagnostics
- Chad is highly vulnerable to climate risks (droughts, floods, high winds, desertification), with severe effects on production, displacement, and balance of payments through unexpected food imports and infrastructure rebuilding.
- The quasi-disappearance of Lake Chad threatens the livelihood of some 40 million people from four bordering countries, exacerbating food insecurity and conflicts; impacts disproportionately affect disadvantaged populations (including the poor, women, children, and refugees).
- Authorities indicated their desire to access the Resilience and Sustainability Trust (RST) for prospective balance of payments needs from frequent natural disasters and intend to seek access to the Resilience and Sustainability Facility (RSF).
- Authorities requested a Climate Policy Diagnostic (CPD) to inform RSF preparation, identifying fiscal policy gaps and reforms for adaptation and mitigation.
- The authorities signaled readiness to reform in this area (MEFP ¶4 and 5).

### Capacity development (CD) strategy and planned support
- The Fund’s CD strategy is designed to support implementation of key structural reforms underpinning the ECF program, aligned with the program’s first pillar (accelerating structural fiscal reforms).
- Technical assistance (TA) focus areas: public financial management (PFM), revenue administration, expenditure control, debt management, and national accounts statistics.
- Planned missions will support the 2022–2027 PFM reform strategy, including finalization of the Treasury Single Account, modernization of tax and customs administrations, and expansion/integration of the Integrated Financial Management Information System.
- A Governance and Anti-Corruption Diagnostic assessment will be provided following the authorities’ request in May 2025.
- CD spending of US$1.7 million is planned for FY26.

### Data quality and statistical issues
- Chad is considered a case “C” country in the Data Adequacy Assessment (i.e., the data provided to the Fund has some shortcomings that hamper surveillance); this represents a deterioration from a prior “B” rating.
- Deterioration reflects large discrepancies between BEAC’s preliminary balance of payments estimates and INSEED’s national accounts; persistent delays in data transmission to the Fund also need to be addressed.
- Staff welcomed progress in aligning trade data between BEAC and INSEED and BEAC’s publication of balance of payments data from 2016 until 2022.
- Official data do not yet fully account for mining activities; staff made preliminary assumptions to estimate mining’s role in the absence of consistent, integrated statistics (see Annex II).
- A recent STA mission to BEAC supported data updates after transition to a new IT platform; Financial Soundness Indicators for 2024 have not yet been published.

### Staff appraisal — country context and program objectives
- Context: Chad faces significant challenges: fragility, wide-spread poverty, and persistent exposure to humanitarian, climatic, and security shocks. A political transition was completed in February 2025.
- Authorities are committed to an ambitious reform agenda as set out in the National Development Plan (NDP) 2025–2030.
- The proposed ECF-supported economic program is built on three pillars:
  - Pillar 1: Increase non-oil revenues via tax administration and tax policy reforms and streamline current spending to create sustainable fiscal space for social spending and development projects.
  - Pillar 2: Support inclusion objectives by developing a well-targeted and adequate social safety net.
  - Pillar 3: Improve governance and the business climate.
- Commitments and specific policy measures:
  - Increase non-oil tax revenues through a mix of tax policy and tax administration reforms; intend to raise import and export duties on specific goods and implement new excise taxes.
  - Reduce tax incentives outside priority sectors.
  - Continue tax administration digitalization focused on tax e-payments, e-invoicing, audit, and tax compliance.
  - Strengthen fiscal planning, PFM, and transparency to improve budget implementation, reduce liquidity shortages and arrears, and strengthen debt management; support development of multi-year investment programming and reduce procyclicality from oil dependence.
  - Reinforce capacities with Fund support in financial planning, debt statistics, PFM, and fiscal transparency.
  - Expand national identification and social registry coverage to enable targeted social spending; program will support increased adaptive and productive cash transfers and school feeding programs.
  - Enhance governance and transparency, particularly in the oil and financial sectors; authorities requested an IMF Governance Diagnostic (GD), committed to anti-corruption efforts, restructuring/divestment in the banking sector, and enhancing oil-sector transparency.

### Program financing and support
- Based on balance of payments needs, policy commitments, and regional policy assurances (June 2025 union-wide paper), staff supports the authorities’ request for a 48-month ECF arrangement with access of SDR 455.65 million (325 percent of quota).
- Program support rests on policies and reforms committed under the MEFP, prior actions taken, and anticipated additional budget support and donor funding.

*Source: IMF staff report content provided in the supplied PDF chapter.*

### 1. Raise non-oil revenues

### 1. Raise non-oil revenues

### Immediate policy measures (prior actions)
- Issue a decree (Arrêté) establishing export and import duties of 5% on certain products, other than essential goods and nontaxed products (detailed in the MEFP ¶18), and up to 10% on antimony, unprocessed copper, and electric engines.
- Issue a decree (Arrêté) requiring the e-payment of taxes, fees and direct and indirect duties through banks and mobile telephone operators.
- Issue a directive (Directive) to close and suspend the opening of customs offices and posts that do not have an e-payment system and ASYCUDA.

### Public sector wage and hiring measures
- In consultation with the Minister in charge of the Civil Service and by exchange of letters, suspend:
  - (i) new hires in the non-priority civil public sector (detailed in the MEFP ¶21), beyond the commitments made in the 2025 budget law, until the end of 2026;
  - (ii) interministerial movements of agents, except in cases of agents joining the education, higher education, or health sectors to work as teaching and health staff;
  - (iii) make numerical replacements, position by position, conditional on the submission of deletion (radiation) acts, death and retirement certificates.
- Ceiling on wages and salaries (Quantitative Performance Criteria line in Table 7): 332505678167340693

### Oil sector governance and transparency
- Authorities to provide IMF staff with the progress report on the audit of oil revenues since 2020 and the establishment of a visualization system (Data Analytics) for the management of oil revenues in Chad.
- Publish the audit of oil revenues since 2020 and the implementation of a visualization system (“Data Analytics”) for the management of oil revenues in Chad, by end-November 2025.

### Financial management and PFM systems
- Amend Decree #3361/PT/PM/MFBCP/2023 to upgrade the pre-authorized spending (DAO) management module in SIGFiP to allow for the sequestration of the portion of the budget line necessary for the regularization of each DAO.
- Submit the draft Settlement Law (Loi de Règlement) necessary to the Court of Accounts for the final report on the implementation of the 2024 budget law and grant them access to SIGFiP, in compliance with the legal provisions, by end-August 2025.
- Issue a decree (Arrêté) specifying and strengthening the provisions of the General Regulation on Public Accounting relating to the status of public accountants and propose an amendment to certain provisions of the tax procedure code relating to the exercise of certain functions within the framework of the Tax Procedure Code (TPC) and the General Tax Code (GTC), with the support of IMF staff.
- Include in the 2026 budget law the implementation of the standardized electronic invoicing across the public sector.

### Revenue measures to be included in budgets (2026 draft / 2026 budget law)
- Include in the draft 2026 budget law:
  - imposition of the specific tax on other tobacco and tobacco substitutes (shisha) and on cosmetic products with hydroquinone (detailed in the MEFP ¶18);
  - new taxable values for the import of agricultural products, milk, luxury goods and some products harmful to health (detailed in the MEFP ¶18).
- Include in the 2026 budget law the implementation of the standardized electronic invoicing across the public sector.
- Publish an annual list of all tax incentives granted, including renewals and extensions, indicating the relevant legal provisions, starting from the 2026 budget law onwards.

### VAT and tax-credit management
- Conduct an audit by the General Inspectorate of Finance (IGF) of VAT credit stocks and submit the audit report to IMF staff.
- Negotiate an agreement to clear the VAT credits validated by the audit.
- Allocate 15 percent of VAT revenues to the VAT escrow account at BEAC, and establish a refund protocol to facilitate the VAT refund mechanism.

### Social protection, registry, and fiscal ring-fencing
- Develop the organization related to the implementation of the unified social registry, which will allow to expand national coverage, with the support of IMF staff.
- Ministry of Finance to publish automatic adjustments to remunerations in the annual budget law. The awarding of allowances and promotions by category and grade must be done within the ceilings defined in the budget, starting with the 2026 budget law.
- Submit to the National Assembly a draft revised budget law to adjust expenditures when the impact of price declines on budgeted oil revenues is greater than or equal to 30%, starting with the 2026 budget law.

### Financial sector stability and bank restructuring (Second Review)
- Submit to COBAC, before end-December 2025:
  - i) the restructuring plan of BCC;
  - ii) the revised restructuring plan of CBT;
  - iii) the requests for opinions (avis conforme) related to the sale of BAC and BHT.

### Periodic structural benchmarks (publication and reporting)
- Publish a quarterly TOFE on accrual basis, validated by the Public Finance Monitoring Committee, starting from January 2026.
- Publish a report on consolidated debt statistics and forecasts and prepare a quarterly expenditure commitment plan based on draft budgets, accompanied by a cash flow plan and debt management strategy, and incorporate a summary in the draft budgets from the 2026 budget law onwards.

### Quantitative Performance Criteria (QPC) and Indicative Targets (selected figures from Table 7)
- QPCs (I n billions of CFAF, unless otherwise indicated):
  - Ceiling on new external arrears of the government and non-financial public enterprises: 1 000000
  - Ceiling on contracting or guaranteeing new non-concessional external debt by the government and non-financial public enterprises: 1 000000
  - Floor on non-oil primary budget balance (NOPB): -301-507-728-142-290-709
  - Floor on government tax revenue, excluding tax revenue from oil companies: 4366508762345061016
  - Ceiling on wages and salaries: 332505678167340693
- Indicative Targets:
  - Pre-authorized spending procedures-DAO (Percent of primary spending): 302825232015
  - Ceiling on net domestic government financing: 1480-1258261-133
  - Ceiling on the stock of domestic payment arrears by the government: 184179174172169167
  - Floor for social spending on cash-transfers and school feeding programs: 0.50.91 .83.6
- Memorandum items:
  - Oil Revenue: 452686920158337686
  - Grants: 13922234662162401
  - External concessional borrowing: 9213641028104532

### Program implementation record and lessons from past ECF arrangements
- ECF 2014-2017:
  - Approved August 1, 2014, 36 months, SDR 79.94 million (57 percent of quota); augmentations to SDR 106.6 million and SDR 140.2 million with a 4-month extension.
  - Key outcomes: supported fiscal consolidation, PFM reforms, and HIPC Completion Point; hit by oil price shock with government oil revenues falling by more than 70 percent; program went off-track in late 2016 with payment arrears and liquidity crisis.
  - Lessons: need for contingency planning and comprehensive solutions to debt vulnerabilities.
- ECF 2017-2020:
  - Approved June 30, 2017, 36 months, SDR 224.32 million (160 percent of quota).
  - Key outcomes: satisfactory performance pre-COVID, clearing of domestic arrears, repayment plan, Glencore debt restructuring in 2018; program cancelled in 2020 due to COVID and switched to Rapid Credit Facilities.
  - Lessons: unforeseen shocks can force program reprioritization despite sound implementation.
- ECF 2021-2024:
  - Approved December 10, 2021, 36 months, SDR 392.56 million (280 percent of quota).
  - Key outcomes: first restructurings under G20 Common Framework (Glencore reprofiling), but political transition and regional shocks (including large refugee inflows) disrupted implementation; program lapsed in June 2024 after 18 months without a completed review.
  - Lessons: need for contingency planning and recognition of implementation limits during political transitions and large regional shocks.
- Overall program performance across ECFs:
  - Mixed record: ceilings on new non-concessional external debt and floor on NOPB most frequently met; ceilings on new external arrears and stock of domestic arrears most frequently missed; floor on social spending frequently missed.
  - Structural benchmarks: around 20 percent not met, and 15 percent met with delays; revenue mobilization conditionality implementation somewhat lower than regional average.

*Source: 1tcdea2025001-source-pdf - 1. Raise non-oil revenues*

### 3.      Chad’s experience under three successive ECF-supported programs reflects both the

### 3.      Chad’s experience under three successive ECF-supported programs reflects both the

### Macroeconomic and structural outcomes
- Debt sustainability improved significantly through milestone debt relief initiatives:
  - Reached the HIPC Completion Point under the 2014 arrangement.
  - Landmark restructuring of commercial debt during the 2017 program.
  - Successfully negotiated the first G20 Common Framework debt treatment in 2022.
- These efforts substantially reduced external debt burdens and improved medium-term fiscal sustainability.
- Programs contributed to macroeconomic stabilization following severe shocks, enabling Chad to avoid deeper fiscal and economic crises.
- Critical structural reforms achieved include:
  - Improved oil revenue transparency.
  - Widened tax base.
  - Digitalization of public services.
  - Public financial management reforms.
  - Strengthened frameworks for fiscal governance.
- Collective impact: These achievements set a stronger foundation for future growth and poverty reduction, conditional on continued reform momentum.

### Cross-cutting challenges (as identified)
- Challenges under the authorities’ control:
  1. Insufficient contingency planning.
  2. Weak institutional capacity.
  3. Uneven program ownership and commitment to reforms.
  4. Weak debt management and carrying capacities.
  5. Inadequate social safety nets.
  6. Weak governance and transparency.
- External vulnerabilities that significantly weighed on program performance:
  - High vulnerability to external shocks, especially oil prices volatility, natural disasters, and regional security.

### Key lessons from the last decade of Fund engagement
- Overarching lesson:
  - Programs must be tailored to realistic implementation capacity and integrate elements of flexibility and contingency given limited institutional capacities and frequent large external shocks.
  - Conditionality should focus on a critical few reforms and be supported with well-timed and tailored technical assistance and capacity development.
  - Future program engagement should incorporate capacity development plans and enhance coordination with donors.
  - Realistic pacing of reforms, with contingency plans if capacity bottlenecks emerge, will improve likelihood of meeting structural objectives.

- Program design and flexibility:
  - The Fund augmented access and rephased the 2014 ECF arrangement in the face of the oil shock.
  - During COVID-19, switching to RCF financing allowed timely support.
  - Program targets and design should be adjusted proactively as conditions not under authorities’ control change significantly, e.g., introducing adjustors for oil revenue swings or allowing higher temporary deficits for emergency spending.
  - Crisis response can be integrated with program frameworks without abandoning reform objectives.
  - Future arrangements would benefit from clearly defined shock clauses or contingent measures.

- Capacity constraints and structural reforms:
  - Limited administrative capacity and institutional weaknesses impeded program implementation.
  - Numerous structural benchmarks were delayed or unmet due to capacity shortfalls or overstretched administrative resources.
  - Example: establishing a Treasury Single Account and strengthening expenditure controls proved challenging amid weak institutional capacity and competing urgent priorities.

- Enhancing ownership:
  - Sustained authorities' ownership is critical for successful reform implementation.
  - Initial commitment was typically strong during acute crises, but political support and policy discipline often waned as political priorities shifted.
  - Future programs should explicitly structure incentives to reinforce sustained ownership and commitments, setting prior actions or critical benchmarks tied to high-impact structural reforms.
  - Clear alignment of IMF support with domestic reform programs—coupled with strategic communication—can strengthen political buy-in and sustain reform momentum after crises abate.

- Addressing debt sustainability issues upfront:
  - Chad underwent debt reworks in 2015, 2018, and 2021—each increasingly comprehensive—illustrating that insufficiently comprehensive measures can lead to repeated crises.
  - The 2015 rescheduling provided temporary relief but left debt risks high, necessitating a deeper 2018 restructuring, which proved insufficient once the COVID19 pandemic struck.
  - For countries with structural debt sustainability issues, program success hinges on upfront measures to sustainably reduce the risk of debt distress.
  - The Common Framework experience shows the value of coordinating creditors (official and private) under a single umbrella to support a sustainable debt rework.
  - Delays in the debt-treatment process reveal that program timelines may need to be aligned with protracted debt negotiations.
  - Strengthening debt management capacity is vital to prevent re-accumulation of unsustainable debt.
  - Ensuring debt sustainability through well-calibrated relief and disciplined new borrowing is a prerequisite for durable program exit.

- Protected and more effective social spending:
  - Maintaining adequate social and poverty-reducing spending during fiscal consolidation has been a consistent challenge.
  - All three ECF programs included indicative targets to protect priority social spending, yet these were at times hard to meet when revenues collapsed.
  - Programs should prioritize and ring-fence critical social programs and support more effective and targeted social spending (e.g., targeted cash transfers), even if that means a slightly slower pace of fiscal adjustment.
  - In low-income, fragile contexts, visible social gains are essential for sustaining public support for reforms.
  - Recommendations: better targeting of subsidies, expanding cash transfer programs, and tracking social indicators as integral parts of program design.

- Strengthening governance and transparency:
  - Governance weaknesses consistently hindered program implementation across all three ECF arrangements.
  - Persistent issues included weak expenditure controls, reliance on pre-authorized spending procedures, and delays in implementing anti-corruption measures.
  - Future programs must continue to integrate governance reforms in conditionality.
  - Recommended measures: strengthen fiscal transparency, rigorously limit pre-authorized spending procedures, systematically audit state-owned enterprises, strengthen the judicial system, and enforce anti-corruption legislation.

- Managing residual risks that are difficult to mitigate:
  - Examples: irregular transitions, the impact of civil wars in neighboring countries.
  - Fundamental governance question: at what point to pause a program and when to continue?

### Authorities’ views
- Authorities broadly agreed with Staff’s assessment of the last 10 years of program engagement.
- They noted implementation challenges largely stemmed from repeated and severe external shocks, including:
  - Oil price collapses.
  - The COVID-19 pandemic.
  - Regional security and humanitarian crises.
- Authorities emphasized Chad remains highly vulnerable to exogenous events and underlined the importance of program design that integrates flexibility, contingency mechanisms, and well-sequenced structural measures adapted to capacity constraints.
- Authorities reaffirmed strong ownership of the reform agenda and expressed renewed commitment to pursuing macroeconomic stability and structural transformation.

### Annex II — Estimating Artisanal Mining Output in Chad: key findings and projections
- Measurement challenges:
  - Artisanal mining extraction is difficult to measure and often not officially recorded; previous GDP estimates for Chad included only small amounts of mining activity.
  - Previous GDP estimates for Chad suggested that non-oil mining extraction represented just over 2 percent of GDP.

- Evidence pointing to larger artisanal mining activity:
  - Trade mirror statistics from Chad’s trade partner countries show substantial mineral exports from Chad—most notably gold—with exports to the United Arab Emirates estimated at USD 1.1 billion in 2023.
  - Tax data collected by Chadian authorities suggest artisanal gold extraction alone was around 5 tons in 2024 and is on course to be higher still in 2025, as high global gold prices encourage additional extraction activity.
  - Some research indicates artisanal mining activity could be larger than previously estimated across a number of SSA countries; indicators suggest the same could be true for Chad.
  - Many artisanal mining sites are close to borders between fragile and conflict-affected states and materials can be transported via unregulated channels.

- Scale and employment:
  - Artisanal and small-scale mining (ASM) is estimated to employ around 300,000 people.

- Historical development and recent momentum:
  - Initial gold discoveries were made in the Tibesti and Fitri regions in 2013 and 2015, respectively.
  - Antimony has also been mined more recently.
  - By assuming mineral extraction growth followed the path implied by Chad’s gold export trade mirror statistics, staff constructed a time series of mineral extraction since 2012.
  - At current global gold prices, artisanal mineral extraction would be around 3.8 percent of GDP in 2025.
  - For comparison: oil extraction represents 13.7 percent of GDP in Chad.

- Projections and policy dependence:
  - Artisanal mining extraction is expected to continue to grow strongly beyond 2025, consistent with global gold prices remaining elevated over the medium term.
  - Between 2026 and 2030, non-oil mining extraction growth is expected to average 6.5 percent per year and contribute 0.3 percentage points to overall GDP growth.
  - Future projections will depend on government reforms, including the extent to which mining production is formalized and potential involvement of foreign firms.

*Source: IMF staff assessment and Annex II estimates from the provided content.*

### Annex III. Enhanced Safeguards

### Annex III. Enhanced Safeguards

### Debt composition and evolution
- At program initiation, Chad’s de facto senior debt plus other multilateral and collateralized debt as a share of total external debt is below 50 percent but is projected to rise to 50 percent over the medium term under the baseline projection.
- Ratios are below the mean and median for PRGT programs, indicating a significant buffer of restructurable debt.
- At program initiation:
  - Debt held by institutions afforded preferred creditor status (the IMF, World Bank, other development banks) account for 34.3 percent of PPG external debt.
  - Including debt held by the BDEAC brings the total to 42 percent.
  - Debt owed to the commercial creditor Glencore is 6.2 percent of external debt at end-2024 and is the only collateralized debt held by Chad.
- Projection:
  - The combined share of multilateral and collateralized debt is projected to increase to 50 percent of PPG external debt by 2027.
- Bilateral support:
  - Despite scaling up in financing from the United Arab Emirates, overall bilateral support should remain around half of the external debt.
  - The authorities do not intend to contract any new non-concessional debt with other bilateral or private partners.
- Multilateral concentration:
  - In the absence of other sources of finance, multilateral creditors, including the regional development bank, account for more than 40 percent of Chad’s external debt stock.
  - Half of this debt is owed to the IMF under the Poverty Reduction and Growth Trust (PRGT), more than twice the median of PRGT-eligible countries.
  - Debt to World Bank only accounts for 5 percent of external debt through IDA; however, the Bank’s recent support has been provided through project financing in the form of grants.
- Glencore (collateralized debt) specifics:
  - Debt reimbursement agreement features a cash sweep clause that ties debt repayments to oil prices.
  - In November 2022, Glencore and the government of Chad reached an agreement for debt treatment—reprofiling repayments from 2023 to 2026 without a "haircut" or reduction in the debt's net present value.
  - Due to the cash sweep clause, the debt to Glencore represented 6% of Chad's external debt at the end of 2024, down from 20% at the end of 2022, as reimbursements accelerated with high oil prices in 2023 and 2024.

Key debt stock figures (end-2024 and projections)
- Total Debt 1/: US$6,045 (2024); US$6,549 (2025); US$7,142 (2026); US$7,637 (2027). Percent of GDP: 31.5 (2024); 31.8 (2025); 33.1 (2026); 33.6 (2027).
- External 1/: US$3,056 (2024); US$3,444 (2025); US$4,125 (2026); US$4,774 (2027). Percent of GDP: 15.9 (2024); 16.7 (2025); 19.1 (2026); 21.0 (2027).
- Multilateral and International Creditors 1/: US$1,283 (2024); US$1,533 (2025); US$1,855 (2026); US$2,310 (2027). Percent of GDP: 6.7 (2024); 7.5 (2025); 8.6 (2026); 10.2 (2027). Share of External Debt: 42.0 (2024); 44.5 (2025); 45.0 (2026); 48.4 (2027).
  - o/w: IMF PRGT 1/: US$634 (2024); US$625 (2025); US$656 (2026); US$703 (2027). Percent of GDP: 3.3 (2024); 3.0 (2025); 3.0 (2026); 3.1 (2027). Share of External Debt: 20.7 (2024); 18.1 (2025); 15.9 (2026); 14.7 (2027).
  - o/w: World Bank IDA: US$140 (2024); US$234 (2025); US$349 (2026); US$423 (2027). Percent of GDP: 0.7 (2024); 1.1 (2025); 1.6 (2026); 1.9 (2027). Share of External Debt: 4.6 (2024); 6.8 (2025); 8.5 (2026); 8.9 (2027).
  - o/w: BDEAC: US$226 (2024); US$180 (2025); US$163 (2026); US$146 (2027). Percent of GDP: 1.2 (2024); 0.9 (2025); 0.8 (2026); 0.6 (2027). Share of External Debt: 7.4 (2024); 5.2 (2025); 3.9 (2026); 3.1 (2027).
- Bilateral Creditors: US$1,569 (2024); US$1,769 (2025); US$2,128 (2026); US$2,384 (2027). Percent of GDP: 8.2 (2024); 8.6 (2025); 9.6 (2026); 10.5 (2027). Share of External Debt: 51.4 (2024); 51.4 (2025); 51.6 (2026); 49.9 (2027).
  - o/w: UAE (Abu Dhabi Fund for Dev.): US$650 (2024); US$781 (2025); US$1,008 (2026); US$1,175 (2027). Percent of GDP: 3.4 (2024); 3.8 (2025); 4.7 (2026); 5.2 (2027). Share of External Debt: 21.3 (2024); 22.7 (2025); 24.4 (2026); 24.6 (2027).
- Commercial Creditors: US$203 (2024); US$142 (2025); US$142 (2026); US$80 (2027). Percent of GDP: 1.1 (2024); 0.7 (2025); 0.7 (2026); 0.4 (2027). Share of External Debt: 6.6 (2024); 4.1 (2025); 3.4 (2026); 1.7 (2027).
  - o/w: Glencore Energy 2/: US$191 (2024); US$131 (2025); US$131 (2026); US$71 (2027). Percent of GDP: 1.0 (2024); 0.6 (2025); 0.6 (2026); 0.3 (2027). Share of External Debt: 6.2 (2024); 3.8 (2025); 3.2 (2026); 1.5 (2027).
- Collateralized Debt (Glencore Energy): US$191 (2024); US$131 (2025); US$131 (2026); US$71 (2027). Percent of GDP: 1.0 (2024); 0.6 (2025); 0.6 (2026); 0.3 (2027). Share of External Debt: 6.2 (2024); 3.8 (2025); 3.2 (2026); 1.5 (2027).
- Multilateral, International and Collateralized Debt (memorandum): US$1,474 (2024); US$1,665 (2025); US$1,987 (2026); US$2,381 (2027). Percent of GDP: 7.7 (2024); 8.1 (2025); 9.2 (2026); 10.5 (2027). Share of External Debt: 48.2 (2024); 48.3 (2025); 48.2 (2026); 49.9 (2027).

### Capacity to repay the Fund and debt-service dynamics
- Overall assessment:
  - Chad’s capacity to repay the Fund is assessed to be adequate, but subject to significant risks.
  - Chad has a good track record in meeting its obligations to the Fund and other multilateral creditors.
  - The proposed economic program provides a policy anchor to limit risks, anchored by a debt-to-GDP target below 33 percent of GDP.
  - The DSA concludes to high risk of debt distress due to significant risks around the outlook.
- Key risks:
  - Heavy reliance on oil sector revenues, vulnerable to external price shocks.
  - Dependence on external financing, subject to geopolitical risks and potential reductions in Official Development Assistance.
  - If realized, these risks could lead to an extreme humanitarian crisis and recession, increasing vulnerability to debt events.
- Fund-specific repayment dynamics:
  - Repayment to the IMF is expected to accelerate in coming years as the government begins reimbursing the 2020 Rapid Credit Facility (RCF) support, followed by the 2021 Extended Credit Facility arrangement (ECF), in addition to the 2017 ECF.
  - Chad’s debt service to the Fund metrics are higher than interquartile ranges, reflecting the composition of the debt stock.
  - Peaks of Chad’s credit outstanding or debt service to the Fund are very slightly above the interquartile range, and significantly below the previous ECF-supported program in 2021.
  - Chad’s external debt service is significantly below the DSA’s threshold of high risk.
  - As fiscal adjustment proceeds and the external debt stock gets more concessional, the debt service-to-revenue ratio is expected to remain contained, maintaining a mechanical moderate risk of external debt distress in the DSA.

Selected Fund obligations and indicators (2025–2039, selected items)
- Fund obligations based on existing credit (SDR millions) — Principal: 54.3 (2025); 48.1 (2026); 50.? (table formatting); Charges and interest: 5.8 (each year shown across period).
- Fund obligations based on existing and prospective credit (SDR millions) — Principal: 62.7 (2025); 74.8 (2026); 77.1 (2027); Charges and interest: 5.8 (each year).
- Total obligations based on existing and prospective credit (SDR millions): 68.5 (2025); 80.4 (2026); 82.7 (2027); 94.6 (2028); 77.1 (2029); 57.5 (2030); 54.7 (2031); 64.5 (2032); 65.2 (2033); 90.4 (2034); 96.4 (2035); 89.6 (2036); 84.8 (2037); 71.3 (2038); 11.9 (2039). (Values presented as in source table.)
- Percent of GDP (total obligations): 0.4 (2025); 0.5 (2026); 0.5 (2027); 0.5 (2028); 0.4 (2029); 0.3 (2030); 0.3 (2031); 0.3 (2032); 0.3 (2033); 0.4 (2034); 0.4 (2035); 0.3 (2036); 0.2 (2037); 0.1 (2038); 0.0 (2039). (Values presented as in source table.)
- Outstanding IMF credit based on existing and prospective drawings (SDR millions): 476.4 (2025); 499.8 (2026); 534.9 (2027); 572.0 (2028); 563.6 (2029); 511.7 (2030); 462.7 (2031); 403.8 (2032); 344.2 (2033); 259.4 (2034); 168.2 (2035); 92.5 (2036); 37.9 (2037); 6.3 (2038); 0.0 (2039).
- Percent of GDP (outstanding IMF credit): 3.1 (2025); 3.1 (2026); 3.1 (2027); 3.2 (2028); 3.0 (2029); 2.6 (2030); 2.2 (2031); 1.8 (2032); 1.5 (2033); 1.0 (2034); 0.6 (2035); 0.3 (2036); 0.1 (2037); 0.0 (2038–2039).
- Percent of quota (outstanding IMF credit): 339.8 (2025); 356.5 (2026); 381.5 (2027); 408.0 (2028); 402.0 (2029); 365.0 (2030); 330.0 (2031); 288.0 (2032); 245.5 (2033); 185.0 (2034); 120.0 (2035); 66.0 (2036); 27.0 (2037); 4.5 (2038); 0.0 (2039).

Notes on indicators and comparators
- Figure III.1 and accompanying notes compare Chad’s capacity-to-repay indicators to arrangements for PRGT countries (arrangements approved between 2014 and 2024), showing medians, interquartile ranges, and comparator bars for several indicators including:
  - Total Fund Credit Outstanding (percent of PPG external debt).
  - Total Debt Service to the Fund (percent of revenue excl. grants).
  - Peaks for Fund credit outstanding and total debt service to the Fund across comparator cases (presented in the original figure and notes).

### Program objectives and policy measures to reduce debt vulnerabilities
- Primary program objective:
  - Reduce debt vulnerabilities through fiscal consolidation, revenue mobilization, and governance reforms to lower debt-service burdens.
- Specific policy anchors and measures:
  - Framework anchored by a debt-to-GDP target below 33 percent of GDP.
  - Fiscal consolidation in non-priority sectors and efforts to mobilize domestic revenues.
  - Prior actions and structural benchmarks aimed at:
    - Increasing non-oil revenues (prior action on establishing export and import duties; structural benchmark on the VAT refund mechanism).
    - Streamlining current and non-priority spending (prior action and structural benchmark on wage bill control).
    - Strengthening debt management (periodic structural benchmark on debt statistics).
- Expected effects:
  - Fiscal adjustment and governance reforms are expected to mitigate risks, increase non-oil revenues, streamline spending, and strengthen debt management, helping reduce the debt service burden.
  - Efforts to extend social protection and address the security crisis should support growth, allowing a faster than projected reduction in total outstanding Fund credit as a percentage of GDP.

*Source: Annex III. Enhanced Safeguards, IMF staff calculations and estimates.*

### Annex V. Capacity Development Strategy

### Annex V. Capacity Development Strategy

### A. Context and Progress
- Objective: Support key structural reforms envisaged under the ECF-supported program by prioritizing TA for public financial management (PFM), revenue administration, expenditure control, debt management, and national accounts statistics.
- Recent progress:
  - Mobilizing non-oil revenue, containing non-priority spending, and enhancing public investment management.
  - Phasing out petrol subsidies following TA advice.
  - Digitalization of tax processes and customs integration continued.
  - Resolution of large discrepancies between BEAC and INSEED data, culminating in the publication of preliminary unified BoP data for 2016 to 2022.1
- Implementation challenges:
  - Delays in operationalizing the Treasury Single Account reflect limited absorptive capacity and absence of institutional mechanisms for TA follow-up.
  - Presence of long-term experts: PFM and revenue administration long-term experts provide local TA; long-term experts in tax administration support digitalization, tax risk management, and fragility-related risks in AFRITAC Central countries.

1 The data is not yet fully assessed by the Statistics department.

### B. CD Strategy — Priorities, Ongoing Work, and Forward Agenda
- Strategic alignment: CD strategy aligned with program’s first pillar—creating fiscal space through accelerated structural reforms—with a focus on PFM, revenue administration, expenditure control, debt management, and statistics.
- Governance, anticorruption, climate, regional integration, and private sector:  
  - Governance and anticorruption identified as a key area for medium-term support; authorities requested a Governance Diagnostic Assessment in May 2025.
  - Build capacity to integrate climate change adaptation and mitigation into policy and strengthen climate-related PFM.
  - Provide CD to accompany implementation of the CEMAC Regional Strategy Framework.
  - Support policy design for economic diversification and private sector growth (business environment, access to finance, infrastructure).

- Table V.1: Key project indicators and planned CD activities (selected highlights and exact figures)
  - Public Financial Management
    - Traction: Implementation of 2022-2027 PFM reform strategy (SRFP), TSA establishment, deployment/expansion of IFMIS (SIGFiP) ongoing with delays.
    - Projects in Execution: 8
    - Total Budget (Mio. USD): 3.1
    - Providers: AFRITAC Central, FAD
    - Going Forward: Finalize TSA roadmap; strengthen capacity to implement SRFP; full interconnection of ministry platforms with SIGFiP; expand IFMIS to all general government units; implement SOE governance action plan.
  - Revenue Administration
    - Traction: Digitalization achievements including e-invoicing/reporting of VAT since July 2024; scoping mission in August 2024; e-tax implementation TA in November 2024; Customs-Tax Committee data exchange concept presented January 2025; customs litigation TA with UNCTAD and World Bank ongoing; mission to enforce customs practices in line with CEMAC regulations in April.
    - Projects in Execution: 4
    - Total Budget (Mio. USD): 2.8
    - Providers: AFRITAC Central, FAD
    - Going Forward: Continue enforcement of tax and customs laws; continue broadband tax base efforts including enforcement of tax e-payment (Prior Action); GPFP workshop on tax risk management planned for July 2025; continue modernization of IT and digital tools; enforce e-payment in customs (Prior Action); VAT e-invoicing; advance recovery of tax arrears.
  - Expenditure Control
    - Traction: Petrol subsidies phased out following CD support; TA recommendations to control wage bill lagging.
    - Projects in Execution: 2
    - Total Budget (Mio. USD): 0.3
    - Providers: AFRITAC Central, FAD
    - Going Forward: Continue wage bill containment via suspension of new hires and limitation of agents’ movements (Prior Action); identify “ghost workers” (Structural Benchmark); publish automatic remuneration adjustments in budget law (Periodic Structural Benchmark); monitor and reduce pre-authorized spending procedures (DAOs) using SIGFiP (Prior Action); audit to size energy subsidies (Prior Action and Structural Benchmark); plan to remove inefficient subsidies and promote renewable energy.
  - Debt Management
    - Traction: Ongoing TA to formulate and implement MTDS; AFRITAC mission in December 2024 to enhance cash and debt management tools; joint FAD and MCM mission identified capacity weaknesses in December 2024; training for CONAD technical committee in May 2025.
    - Projects in Execution: 2
    - Total Budget (Mio. USD): 0.3
    - Providers: AFRITAC Central, MCM, FAD
    - Going Forward: Continue TA to implement SRFP; make SYGADE fully effective and adapted to staff usage; connect SYGADE to SIGFiP to improve planning and forecasts of debt service payments; regular publication of consolidated debt statistics report (Periodic Structural Benchmark).
  - Statistics
    - Traction: Projects strengthening external sector and national accounts statistics; Fund TA resolved BEAC-INSEED discrepancies, BoP data for 2016 to 2022 published in December 2024 and under STA review; STA supported fiscal tables update and migration to GFSM 2014 in December 2024; ICD-led mission in April 2024 tailored Macroeconomic Framework Tool and integrated Debt Dynamics Tool.
    - Projects in Execution: 6
    - Total Budget (Mio. USD): 1.0
    - Providers: AFRITAC Central, ICD, STA
    - Going Forward: Enhance capacity for macroeconomic analysis and reliable forecasts; improve quality and timeliness of national accounts, government finance, and BoP data; produce quarterly GDP numbers; regular publication of the TOFE with a dedicated committee (Periodic Structural Benchmark); publish the International Investment Position.

- CD resourcing and delivery (CDMAP-based figures, exact phrasings preserved)
  - Planned CD spending for Chad is slightly above the AFR average for FY25 and just in line with average planned CD projects and spending in the CEMAC region for FY26.
  - CD Spending by Delivery Department, FY26 (Million USD): FAD, 1.6M; STA, 0.3M.
  - CD Spending by Funding Source, FY26 (Million USD): Externally financed,1.2M; To be determined, 0.4M; Fund-financed, 0.1M.
  - CD Spending by Portfolio Workstream, FY26 (Million USD): Public Financial Management largest; Revenue Administration received substantial spending increase from FY25 onwards.
  - Note: Key project indicators are IMF staff calculations based on single country CD projects for Chad in stage “Execution” from CDMap as of May 2025. Data for FY25 and FY26 is based on planned activities in CDMAP as of May 2025.

### C. Main Risks and Mitigation
- Implementation risk summary:
  - Authorities’ weak organizational, institutional, human resources, and absorptive capacities limit TA effectiveness and follow-up of recommendations.
  - Need for residential advisors to provide continuous on-the-ground support.
  - IMF advice led to creation of a committee for budget support and TA coordination to promote TA effectiveness through better donor coordination, information sharing, follow-ups, and complementarity of efforts.
- Donor coordination:
  - Development partners (African Development Bank, French Development Agency, EU, UNDP, WB) have gathered around the IMF to step up coordination via regular debriefings, information sharing, and consultation meetings on TA planning, strategies, bottlenecks, and harmonization of recommendations.
  - IMF local office’s catalytic role is essential to sustain coordination and institution-building efforts.

### Annex VI: Risk Assessment Matrix — Selected Risks, Likelihoods, Impacts, and Recommended Policy Responses
- External Risks
  - Sovereign debt distress.
    - Relative Likelihood: High
    - Impact if realized: High. Chad’s public debt is assessed as high risk of distress. A sudden stop in international aid could stress the fiscal situation and exacerbate the risks.
    - Recommended Policy Response: Adopting a resilient fiscal policy anchored in the medium term to improve capacity to absorb shocks. Implement an enhanced debt management strategy.
  - Regional conflicts.
    - Relative Likelihood: Medium
    - Impact if realized: High. Chad is directly affected by the conflict in Sudan. Continued large influx of refugees from Sudan could lead to a humanitarian and social crisis.
    - Recommended Policy Response: Protecting social spending and transfers to the National food security office (ONASA) and seeking donor support.
  - Commodity price volatility.
    - Relative Likelihood: Medium
    - Impact if realized: High. Chad is highly dependent on its oil exports. Volatility in oil price results in higher uncertainty in fiscal revenue.
    - Recommended Policy Response: Adopting a resilient fiscal policy anchored in the medium term to improve capacity to absorb shocks. Implementing structural measures to diversify the economy.
  - Tighter financial conditions and systemic instability.
    - Relative Likelihood: Medium
    - Impact if realized: Medium. The drying up of financing resources in the CEMAC region is leading to high costs of domestic financing for countries, which can lead to Debt sustainability problems. Yields are reaching 11 percent in some cases.
    - Recommended Policy Response: Prudent fiscal policies that will reduce the need to access domestic markets, combined with concessional external financing.
- Structural Risks
  - Deepening geoeconomic fragmentation.
    - Relative Likelihood: High
    - Impact if realized: High. The US decision to stop its contributions towards international organizations is weakening international cooperation. However, the impact on Chad will be limited as USAID work in Chad was not affected by the cuts (USAID managed spending in Chad reached USD 180 million in 2024).
    - Recommended Policy Response: Prudent fiscal policies that will reduce Chad dependence on international aid, diversifying the economy which will also broaden the tax base, and finding access to other sources of funding which Chad is doing with the UAE.
  - Climate change.
    - Relative Likelihood: Medium
    - Impact if realized: High. Chad is one of the most vulnerable countries to climate change. The incidence of floods and droughts has already increased significantly and could severely affect agricultural production, crops and livestock, increasing inflationary pressures and food insecurity.
    - Recommended Policy Response: Adopting climate adaptation and mitigation policies, by securing road and energy network, particularly in economic centers, and for transition by decentralizing and switching to renewable energy production.
- Domestic Risks
  - Political instability / Security.
    - Relative Likelihood: Medium
    - Impact if realized: Medium. While social tensions have been contained since the end of the transition period, they could flare up again if the government does not deliver on its objectives of providing access to energy, water, education, and health.
    - Recommended Policy Response: Creating the necessary fiscal space through domestic revenue mobilization reforms and the streamlining of non-priority expenditures.

*Source: Annex V. Capacity Development Strategy (Annex V and accompanying tables and Risk Assessment Matrix) from the provided IMF content unit.*

### Annex VII. Enterprise Risk Assessment

### Annex VII. Enterprise Risk Assessment

### Risks associated WITH implementing the proposed policy
- Risk matrix categorization (Impact vs Likelihood) spans 1 (Minor) to 6 (Critical) on impact and Rarely–Near certain on likelihood.
- Identified high/major risks:
  - Credibility: Reputational Risks: Objectivity — Rated Major.
  - Program or Project Design: Business risks: Program Design — Rated Somewhat Major.
  - Overdue Obligation: Financial Risks: Credit — Rated Somewhat moderate.
- Risk ranking label: "Risks associated WITH implementing the proposed policy" (detailed heat-map provided in the source).

### Risks to the Fund WITHOUT the proposed policy
- Identified high/major risks:
  - Human Capital: Operational Risks — Rated Major.
  - Debt Crisis: Business risks: Debt Crisis — Rated Major.
  - Credibility: Reputational Risks: Objectivity — Rated Somewhat Major.
- Risk ranking label: "Risks To The Fund WITHOUT The Proposed Policy" (detailed heat-map provided in the source).

### Document Risk Self-Assessment Summary (Table VII.2)
- Risks associated WITH implementing the proposed policy (selected entries):
  - Reputational Risks: Objectivity
    - Risk Description: The Fund could be criticized for continuing its support of the government if social and political tensions recur.
    - Timeframe: Emerging (1-3 yrs)
    - Likelihood: Possible
    - Impact: Major
    - Rating: Major
  - Business risks: Program Design
    - Risk Description: Lack of transparency of SOEs creates SOEs-related fiscal risks if staff is unable to verify the financial soundness of SOEs.
    - Timeframe: Emerging (1-3 yrs)
    - Likelihood: Possible
    - Impact: Moderate
    - Rating: Moderate
  - Financial Risks: Credit
    - Risk Description: Late repurchases and late payment of charges and fees for PRGT lending.
    - Timeframe: Medium-term (3-5 yrs)
    - Likelihood: Possible
    - Impact: Moderate
    - Rating: Moderate
- Risks to the Fund WITHOUT the proposed policy (selected entries):
  - Business risks: Debt Crisis
    - Risk Description: Not proceeding with the program could raise business risks if the Fund fails to provide financial assistance leading to a potential BOP crisis.
    - Timeframe: Emerging (1-3 yrs)
    - Likelihood: Possible
    - Impact: Major
    - Rating: Major
  - Operational Risks
    - Risk Description: The new government cut its longstanding military ties with France, sparking a withdrawal of French troops, which could translate into a security vacuum.
    - Timeframe: Emerging (1-3 yrs)
    - Likelihood: Unlikely
    - Impact: Major
    - Rating: Major
  - Reputational Risks: Objectivity
    - Risk Description: Perceived lack of evenhandedness or lack of alignment with membership.
    - Timeframe: Current (0-1 yrs)
    - Likelihood: Unlikely
    - Impact: Somewhat Major
    - Rating: Moderate

*Source: Annex VII. Enterprise Risk Assessment (Document self-assessment tables).*

### Annex VIII. External Sector Assessment

### Overall external position and key estimates
- Integration of gold trading into the balance of payments uses mirror statistics from partner countries (starting 2012) and Chad’s official customs data (starting 2024).
- Estimated current account surplus of 1    percent of GDP in 2024.  (text reproduces spacing as in source)
- Oil exports:
  - Remained stable in nominal terms but declined as a share of GDP.
  - Account for two third of goods exports.
- Imports:
  - Remained strong due to accelerated development projects.
  - Remained broadly stable as a share of GDP, at about 20 percent.
- Gold sector:
  - Estimated to have represented about 10 percent of exports in 2024–up from the initial 0.3 percent in 2012.
  - Approximated 6.8 tons of gold exported in 2024.
- Fund’s EBA-lite Current Account methodology indicates an external position broadly in line with fundamentals, with caution due to data inconsistencies, high risk of external debt distress, and reserve accumulation challenges.

### Current account dynamics and model results
- Background evolution:
  - Current account narrowed from a historic surplus in 2022 to 1.6 percent of GDP in 2023, and further in 2024 to an estimated 1    percent.
  - Progressive decline in oil exports is the main factor behind the trade balance evolution.
- EBA-Lite CA model and norm:
  - Methodology: EBA-Lite 3.0s.
  - The CA model compares actual adjusted current account to model-estimated current account "norm" reflecting desirable policies in five areas: (i) fiscal strategy; (ii) health expenditures; (iii) FX reserves; (iv) private sector credit; and (v) capital controls.
  - The current account norm is estimated to -2.3 percent of GDP in 2024.
- Cyclical and shock adjustments:
  - Cyclical adjustment, including terms-of-trade adjustments, estimated to have contributed approximately 0.8 percentage points.
  - Impact of natural disasters and conflicts accounted for an estimated 2.5 percentage points (includes severe flooding in August and September 2024 and war in Sudan effects).
  - With adjustments, the current account gap implied by current policies vs norm is 0.1 percent of GDP (Text Table VIII.1).
- Assessment caveat: quantitative assessment suggests external position in line with medium-term fundamentals, but significant uncertainty due to inconsistent trade and balance of payments data, high risk of external debt distress, and challenges to reserve accumulation.

### Policy implications and recommendations
- Potential Policy Responses:
  - Implement measures to improve public finances, governance and the business environment to diversify the economy away from oil and shore up reserves.
  - Adopt a transparent fiscal strategy.
  - Pursue reforms proposed by the National Development Plan and supported by the proposed ECF arrangement to foster capital inflows, strengthen financial inclusion, and improve reserve buffers.
- Specific channels highlighted:
  - Improvements in external financing and concessional borrowing.
  - Domestic revenue mobilization.
  - Continuous monitoring and adjustment of policies based on evolving economic conditions.
  - Proposed ECF-supported program aims at improving fiscal credibility by improving governance and establishing a long-term fiscal policy strategy.
  - Implementing recommended reforms to support private sector development and attract external investments to diversify revenue sources, build buffers, and improve resilience.

### Real Exchange Rate and valuation assessments
- Nominal effective exchange rate:
  - Slightly depreciated in 2024, by about 1 percent.
  - Fluctuations influenced by the euro (CFA franc peg) and recent dollar appreciation and correction in late 2024/early 2025.
  - China and India account for estimated 30 and 10 percent of bilateral trade on average over the last few years, affecting exchange rate dynamics.
- Valuation assessments:
  - EBA-Lite CA model: real effective exchange rate slightly undervalued in 2024 by 0.5 percent, based on CA gap of 0.1 pp and trade semi-elasticity assumption of -0.2.
  - REER model: indicates an overvaluation of 13.6 percent, relying on an estimated CA gap of -3.
  - Staff’s final assessment anchored to the CA model — points to a mild undervaluation in 2024, with caution due to data inconsistencies.

### Capital and financial accounts, reserves
- Capital and financial accounts:
  - Experienced a historically large surplus in 2024.
  - Foreign direct investment directed primarily toward the oil sector amounted to approximately 2 percent of GDP in 2024.
  - Large inflows in the financial account included a US$500 million loan from the UAE.
  - Capital account supported by substantially increased disbursement rates from donors’ projects.
  - Partially offset by repayments to the largest commercial creditor due to a cash-sweep clause, reflected in other and long-term investments.
- Reserves:
  - Preliminary BEAC data indicate Chad’s contribution to regional accumulation of foreign reserves picked up in 2024, supported by external budget financing.
  - Staff notes historically high accumulation of reserves could be temporary and possibly reversed in the very short term.

### Data issues and authorities’ views
- Authorities:
  - Emphasized incorporation of gold exports (currently dominated by artisanal mining) into external sector assessments.
  - Noted efforts to improve data collection at official ports of exit, including registration of exporters and collection of nominal certification fees.
  - Expressed interest in modernizing the gold sector as a priority in the NDP.
- BEAC data updates:
  - BEAC released new Balance of Payments data for 2016–2022 reconciling previous estimates with updated trade and GDP series produced by INSEED for 2005–2022; data under review by STA.
  - BEAC has not published Balance of Payments data for 2015 and indicated data for 2005–2016 will not be revised to align with INSEED trade figures, potentially creating a break in the series.
  - Artisanal gold mining activities are not yet incorporated into the Balance of Payments.

*Source: Annex VIII. External Sector Assessment (text, figures, and tables).*

### Appendix I and Attachment I: Letter of Intent and MEFP highlights

### Letter of Intent—key commitments and financing request
- Date and place: N’Djamena, July 2, 2025.
- Context summary:
  - Progress on ECF arrangement approved in 2021 helped restore debt sustainability and gradually strengthen the external position, including through the G20 Common Framework.
  - Implementation challenges of prior program due to political transition (2021–2024), massive refugee inflows from Sudan since April 2023, and historic floods in 2022 and 2024.
  - Humanitarian crisis: steady influx of refugees reaching nearly 2 million people.
- Financing request:
  - Requesting a new arrangement under the ECF in an amount equivalent to SDR 455.65 million, disbursed in semi-annual tranches over 48 months.
  - Immediate first disbursement of SDR 28.04 million upon approval.
  - Review schedule: first review around December 15, 2025; second review around June 15, 2026.
- Program monitoring:
  - Government commits to consult with IMF staff on additional measures and to provide information regularly and timely per the attached Technical Memorandum of Understanding (TMU).
- Publication authorization:
  - Government authorizes publication of the IMF staff report for the new ECF arrangement, the Debt Sustainability Analysis, the letter of intent, and the attached MEFP and TMU on the IMF website.

### MEFP—policy pillars and priorities (high level)
- Purpose: Outlines reform objectives and priorities for the ECF-supported arrangements, medium-term objectives, and policy framework aligned with the National Development Plan (NDP) 2025–2030.
- NDP 2025–2030 priorities (Chad Connection 2030) adopted May 29, 2025:
  - Development of essential infrastructure (ambition: electrification rate of 90 percent).
  - Universal access to basic public services (health and education).
  - Economic and industrial development.
  - Improvement of the business climate, with special focus on commercial justice.
- MEFP three pillars (as stated in the Letter of Intent):
  - Ensuring a sustainable fiscal policy to create fiscal space for priority investments.
  - Improving access to basic public services by increasing and better targeting social spending.
  - Strengthening economic and financial governance to improve the business environment and attract private investment.
- Contextual constraints:
  - Economy affected by political transition, inflow of refugees from Sudan, and historic floods (2022 and 2024).
  - The 2022 floods impacted 18 of 23 provinces; floods in 2024 more heavily affected agricultural land.

*Source: Appendix I. Letter of Intent and Attachment I. Memorandum of Economic and Financial Policies (MEFP).*

*Source: Annex VII. Enterprise Risk Assessment; Annex VIII. External Sector Assessment; Appendix I. Letter of Intent; Attachment I. MEFP — extracted from the provided IMF content unit.*

### 3. These multiple shocks persist at a time when the overall environment has become

### 3. These multiple shocks persist at a time when the overall environment has become

### Persisting shocks and recent context
- Humanitarian and climate shocks continue; security risks remain elevated.  
- The Sudanese crisis has been ongoing since April 2023, with the number of refugees constantly increasing and now approaching 2 million.  
- The reduction in U.S. aid is already having an impact on humanitarian operations.  
- Oil prices continue to experience significant volatility in 2025.  
- Despite shocks and the expiration of the old ECF-supported program in June 2024, reforms and fiscal policy improvements have continued under preparations for a new NDP and a new Extended Credit Facility (ECF).

### Fiscal performance and public financial management (end-2024 and 2024 developments)
- Net fiscal deficit at end-2024 stood at 1.9 percent of non-oil GDP, exceeding the 2024 Article IV commitment due to lower non-oil revenues, higher subsidies, and exceptional spending.  
- Use of emergency spending procedures (DAO) was reduced from 55 percent of non-wage primary civilian spending in 2023 to 39 percent in 2024.  
- Some arrears were cleared (0.3 percent of GDP).  
- Non-oil revenues increased from 7.1 percent of non-oil GDP in 2023 to 8.9 percent of non-oil GDP in 2024.  
- Decline in oil revenues of more than 2 percent of non-oil GDP in 2024.  
- Domestically financed spending increased by only 0.1 percent of non-oil GDP despite additional urgent spending needs.  
- Non-oil primary deficit (NOPD) reduced from 11.7 percent of non-oil GDP in 2023 to 10.1 percent in 2024.  
- Overall baseline fiscal deficit (CEMAC) declined from 4.7 percent of GDP in 2023 to 3.1 percent in 2024.  
- Progress on digitalization reforms: cooperation and data sharing between customs and tax administrations for implementing a 15 percent withholding tax on imports for unregistered taxpayers; launch of a standardized electronic invoicing system; e-registration, e-conservation, E-notaries; resumed work on a digital electronic public procurement portal supported by the World Bank and other donors.

### First quarter 2025 fiscal and revenue developments
- Non-oil revenues reached 2 percent of non-oil GDP in the first quarter of 2025 compared to 1.6 percent of non-oil GDP during the same period of 2024.  
- Domestically financed primary expenditure until end-March 2025 limited to 2.9 percent of non-oil GDP, compared to 4 percent of non-oil GDP in the first quarter of 2024.  
- NOPD was 0.9 percent of non-oil GDP over the period compared to 2.3 percent of non-oil GDP during the same period in 2024.

### Financing, debt management, and external support
- Contracted and received a new $500 million (2.6 percent of GDP) concessional loan from the Abu Dhabi Fund for Development in November 2024, much of which financed investments to cope with unprecedented floods.  
- Regional treasury securities market showed significant signs of saturation during the second half of 2024; obtaining a credit rating from an international rating agency at the end of 2024 increased demand for issuances and eased liquidity management constraints in the first quarter of 2025.  
- Continued reliance on external concessional financing to preserve debt sustainability.

### Outlook and risks
- Medium-term outlook described as favorable despite current challenges.  
- Global oil prices dropped sharply in early 2025 and are expected to remain lower than prior projections, but non-oil growth (including gold and antimony extraction) expected to support overall GDP growth.  
- Anticipated gradual recovery of oil production thanks to sector investments.  
- Non-oil growth expected to recover gradually in the medium term, supported by structural reforms and an increase in public investment.  
- Inflation projected to stabilize, gradually aligning with BEAC's 3 percent target.  
- Significant downside risks identified:
  - Escalation of the conflict in Sudan → increased refugee inflows, social tensions, pressure on public finances.  
  - Further substantial decline in oil prices → disrupt economic activity, limit fiscal space, create additional financing needs.  
  - Financial instability linked to saturation of the regional treasury market → worsen financing conditions and liquidity pressures by year-end.  
  - Security incidents in the Lake Chad region → potential impact on agricultural production.  
  - More frequent and severe climate events (droughts, floods) → impact on agricultural production and livelihoods.

### Objectives and role of the new Extended Credit Facility (ECF)
- New ECF arrangement will support implementation of the National Development Plan Chad Connection 2030, approved by the Council of Ministers on May 29, 2025 (prior action).  
- ECF built around three main pillars:
  1. Ensure a sustainable fiscal policy and create fiscal space to finance NDP flagship projects.  
  2. Support priority NDP objectives, particularly access to basic services (social protection, education) through increased targeted social spending to expand social safety nets and open schools in educational deserts, including school canteens.  
  3. Achieve tangible improvements in the business environment through strengthened economic and financial governance.  
- ECF-supported program intended to catalyze donor financing and help meet balance of payments financing needs while reducing debt vulnerability risks.  
- Program consistent with the coordinated regional CEMAC approach: fiscal consolidation, improved governance indicators, strengthened social safety nets, fiscal transparency, and economic diversification.  
- Commitment to produce and regularly disseminate reliable and comprehensive fiscal, economic, and financial data for multilateral surveillance, monetary policy, and sectoral policies (reiterates December 2024 CEMAC Heads of State communiqué).

### Pillar 1: Ensuring a Sustainable Fiscal Policy — key targets and measures
- Macro-fiscal framework aims to respect the regional deficit criterion of 1.5 percent of GDP on average throughout the program, achieved through an operational rule designed to reduce the non-oil primary balance to below 5 percent of non-oil GDP, compatible with a sustainable level of public debt.

Fiscal planning and budget measures for 2025
- Government committed to implementing the 2025 budget law, providing for substantial rationalization of nonpriority spending.  
- Budget reforms to boost non-oil revenue include stricter taxpayer registration requirements, enhanced VAT enforcement and electronic invoicing requirements (particularly for entrepreneurs in the extractive sector), and new reporting mandates for banking transactions.  
- Debt management commitment: timely public debt management to lower cost of debt; avoid non-concessional external financing; limit net treasury issuances on the regional market; prioritize external concessional financing from multilateral and bilateral donors.  
- Budget provides for creation of 2,400 new positions in the public service, most in priority sectors.  
- Budget appropriations for social ministries amount to 4.9 percent of non-oil GDP in the 2025 budget law, compared to 4.6 percent in the 2024 budget.

Medium-term fiscal consolidation targets
- Aim to bring the non-oil primary balance below 5 percent of non-oil GDP.  
- Target to increase non-oil revenue mobilization by 1.9 percent of non-oil GDP over the period (excluding one-off measures in 2024), composed of:
  - 0.9 percent of non-oil GDP expected from accelerated tax administration reforms over the program period.  
  - 1 percent of non-oil GDP expected from tax policy measures.

### Pillar 1B: Raising Tax Revenue — policy measures and expected gains
- Commitment to increase non-oil revenue (quantitative performance criterion) to reduce dependence on oil, mitigate pro-cyclicality, and finance flagship NDP projects.  
- Modernize tax and customs administration using digital tools; strengthen collaboration between tax and customs administrations for improved audits.

Tax policy measures (revenue gains estimated at about 1 ppt of non-oil GDP)
- Impose customs duties of 5% on exports of Arabic gum, sesame, groundnuts, and leather products.  
- Impose an exit duty of around 10 percent on antimony and raw copper.  
- Impose 5 percent import duties on electric vehicles (prior action).  
- Expect these measures to generate around CFAF 25 billion per year.  
- In the 2026 budget, propose introduction of a specific tax on tobacco and other tobacco substitutes (shisha, etc.) and on cosmetic products containing hydroquinone; review new taxable values for specific products (to be detailed at first review and consistent with WTO). Expect these measures to generate around CFAF 10 billion per year (structural benchmark).  
- Publish an annual list of all tax incentives granted, including renewals and extensions, starting in 2026 (periodic structural indicator).  
- Broaden the excise tax base to capture luxury goods (watches, handbags, smartphones, audio equipment), fine art and collectibles, plastics and fossil fuel products (Styrofoam, single-use plastic bags, plastic bottles, plastic straws and cutlery), coal and coal-derived products, and plastic-derived synthetic textiles.

Administrative measures (estimated revenue gains of around 0.9 ppt of NOGDP)
- Continue standardized electronic invoicing, expected to increase revenues by CFAF 15 billion per year over the program period.  
- Require electronic payment of direct and indirect taxes and duties through banks and mobile phone operators (prior action), expected to generate around CFAF 20 billion per year.  
- In 2025, the General Inspectorate of Finance (IGF) to conduct an audit of VAT credit stocks; audit report to be shared with IMF staff.  
- With entry into force of the Standardized Electronic Invoicing (FEN), establish a more flexible mechanism for refunding VAT credits, particularly through the escrow account at the BEAC (structural benchmark).  
- In the 2026 budget law, implement Standardized Electronic Invoicing across the public sector (structural benchmark) to digitize and improve control functions of the public expenditure chain and formalize subcontracting companies; lay groundwork for automated off-site audit functions based on risk analysis once electronic tax payments and standardized electronic invoicing are in place (structural benchmark).  
- Ensure effective recovery of taxes and duties owed by government corporations, public institutions, and independent administrative authorities.  
- Close and suspend the opening of customs offices and posts that do not have an electronic payment system and ASYCUDA (prior action).  
- Establish a pilot center for electronic tax services in N'Djamena; evaluate and scale up based on results.  
- Strengthen digitization efforts by improving coverage of taxpayer identification through the national identification program and update tax laws to define roles and responsibilities of digital taxpayers and tax administrations.  
- Implement a computerized interface (API) between revenue agencies (DGI, DGTCP, DGDDI, DGD) and mobile telephone companies to maximize revenue collection.

*Source: Chapter text from the provided IMF PDF content unit.*

### 20. We plan to take measures to contain nonpriority spending on the wage bill, goods and

### We plan to take measures to contain nonpriority spending on the wage bill, goods and services, and transfers and subsidies

### Fiscal consolidation and macro targets
- Reduce current expenditure by 1.4 percent of non-oil GDP (excluding the one-off measures in 2024) over the program period.
- Contain domestically financed capital expenditure at 1.6 percent of non-oil GDP over the program period.
- Non-oil primary balance projected to fall to 4.8 percent of non-oil GDP by 2028.
- Public debt projected to be below 32 percent of GDP by 2029.

### Payroll management (wage bill)
- Quantitative objective: manage and optimize current expenditures by streamlining non-priority expenditures, with a particular focus on the wage bill (quantitative performance criterion).
- Wage bill reduction target: from 6.8 percent of non-oil GDP in 2024 to 6.0 percent of non-oil GDP by 2030.
- Suspension and hiring rules (prior actions and structural benchmarks):
  - Suspend new hiring in non-priority civil and public sectors beyond commitments in the 2025 budget law until end-2026 (prior action).
  - Suspend inter-ministerial movements of agents, except for agents joining education, higher education, or health sectors to work as teachers and caregivers (prior action).
  - Make any numerical replacement conditional on presentation of an act of deregistration, certificates of type of death, or a retirement order (prior action).
  - Subject these measures to audit by the General Inspectorate of Finance (IGF) in 2026 for 2025 execution and in 2027 for 2026 execution (structural benchmarks).
- Clean-up of payroll and work register:
  - Develop a plan to implement recommendations of the National Commission for the Biometric Census of Civil Servants and make it available to IMF staff (structural benchmark) to eliminate ghost workers.
- Remuneration controls:
  - Publish automatic adjustments to remuneration in annual budget laws and ensure allowances and promotions by category and grade are within budget limits, starting with the 2026 budget law (periodic structural benchmark).
- Legal and procedural reforms:
  - Issue an order clarifying and strengthening provisions of the General Public Accounting Regulation relating to the status of public accounting officers, and propose amendments to the Tax Procedure Handbook (LPF) and the General Tax Code (CGI) with IMF support (structural benchmark).
- Monitoring:
  - Closely monitor monthly wage bill execution data and, if early risks to program targets appear, propose additional measures in close consultation with IMF staff.

### Public investment
- Maintain domestically financed public investment at a sustainable average of just under 4 percent of non-oil GDP during the program period (above the 10-year historical average of 2.6 percent).
- Establish a single database in SIGFiP covering all public investment projects (domestically and externally financed) for comprehensive monitoring of the project cycle, with IMF and partner support.
- Implement e-procurement with partner support.

### Improve fiscal transparency and public financial management (PFM)
- Objective: strengthen financial programming and transparency to improve budget execution and accelerate PFM reforms; rein in pre-authorized spending procedures (DAO) and reduce their levels throughout the program (indicative target).
- Improve transparency of fiscal and debt operations, forecasting of payments, liquidity management, revitalize cash flow planning committee, and establish commitment plans.
- Full implementation of SIGFiP for all capital expenditures and establishment of a comprehensive public investment database.

Improve financial programming and budget transparency (specific commitments)
- Publish an order creating a Public Finance Monitoring Committee responsible for developing and validating the government financial operations table (TOFE) (prior action).
- Publish a quarterly TOFE beginning in January 2026 (periodic structural benchmark).
- Publish a report on consolidated debt statistics and forecasts; prepare a quarterly expenditure commitment plan based on draft budgets with a cash flow plan and debt management strategy; integrate a synthesis into draft budgets starting with the 2026 budget law (periodic structural benchmark).
- Submit the draft budget review law to the Audit Office for its final report on implementation of the 2024 budget law and grant it access to SIGFiP by end-August 2025 (structural benchmark).
- Finish implementing the accounting phase in SIGFiP by interfacing it with financial authorities' IT systems by 2026 to obtain complete operational coverage of general Treasury account balances and automate accounting entries.

Accelerate PFM reforms (specific commitments)
- Amend Decree No. 3361/PT/PM/MFBCP/2023 to upgrade the DAO module in SIGFiP, allowing setting aside of the budget line portion necessary for regularization of each DAO (prior action).
- Continue TSA strategy and roadmap by closing public bank accounts with balances below CFAF 500,000 that have not been represented since January 1, 2024; develop TSA interface between SIGFiP and the AMS/X TSA management application with BEAC.
- Expand access to public services nationwide through digital systems; a project with the World Bank is under discussion.
- Modernize governance of public enterprises, digitalize management processes, and improve financial reporting.

### Limiting the procyclicality of fiscal policy and contingency planning
- Prepare contingency plans; the NDP includes an adverse scenario accounting for oil price volatility, climate shocks, regional security spillovers, and global geopolitical tensions.
- Contingency measures include cancelling lower priority expenditures, preparing a draft budget law with additional revenue-increasing measures, and mobilizing additional financing to address financing gaps.
- For oil shocks:
  - Oil revenues account for approximately half of total revenues.
  - Plan reforms to insulate the budget from oil price volatility, including an oil price adjustor and an adjustment mechanism for expenditure deductions when oil prices deviate significantly from fiscal projections.
  - Submit a draft supplementary budget law to the National Assembly to adjust expenditures when the impact of lower oil prices on budgeted oil revenues is greater than or equal to 30 percent, starting with the 2026 budget law (periodic structural benchmark).

### Improve public debt management
- Prior action: propose centralizing public debt analysis and monitoring within the General Directorate of the Treasury to consolidate debt data, develop forecasts, and contribute to a regular financing plan and debt management strategy embedded in budget documents.
- Continue to take up new loans only on concessional terms (quantitative performance criteria).
- Commitment to non-accumulation of external arrears (quantitative performance criteria).
- Strategy: favor low-cost financing with long maturities to reduce debt service burden and create space for priority investments.

### Expand biometric identification and national ID (social inclusion and service access)
- Biometric identification is essential to ensure access to basic public services, the Unified Social Register (RSU), cash transfer programs, and to increase the tax base through digitization and connection to the NNI.
- Pilot initiatives launched in February 2025 to issue biometric identity cards to 25,000 refugees, with the long-term objective of covering a significant share of the refugee population of around 500,000.
- Identification coverage among the local population remains limited and well below neighboring countries.
- Target: develop an identification program aiming to cover 80 percent of the population by the end of the program.
- Use infrastructure in regions where local populations benefit from facilities initially dedicated to refugees to extend identification coverage to local populations and issue biometric identity cards compatible with the NNI.
- Address obstacles to biometric registration, including lack of infrastructure and gender disparities, in coordination with technical and financial partners.
- Promote systematic biometric registration connected to the NNI through NDP implementation and construction of new infrastructure.

### Targeted social spending: RSU, cash transfers, and school canteens
- Institutionalize social safety nets by advancing the Unified Social Register (RSU) agenda and expanding coverage nationwide (indicative target).
- National Social Protection Strategy established in 2024 with the World Bank; set to expire in 2028.
- Adaptive and Productive Safety Nets Project (World Bank support) aims to expand RSU and cash transfer program coverage.
- Create the institutional and governance structure to advance the RSU agenda and update the decree on the Unified Social Register (structural benchmark).
- RSU hosted by INSEED; agreement signed with 19 institutions but only eight have contributed to the registry; commit to making the agreement operational with all signatories.
- Cash transfer program financing:
  - Commit to incremental increases of US$2.5 million per year over the program horizon (indicative target) to gradually increase direct funding for the Adaptive and Productive Cash Transfer Program.
- School canteens (education and nutrition):
  - Include school canteens in the 2025 budget for a total amount of CFAF 500 million.
  - Target eight provinces: Borkou, Tibesti, Ennedi East, Ennedi West, Wadi-Fira, Kanem, Bahr El Gazal, and Batha.
  - Based on FAO estimated financing requirements amounting to USD 2 million for the period from May 2025 to April 2027.
  - Government committed to provide USD 1 million in the 2026 budget law in addition to 2025 support and to gradually increase annual contributions throughout the program.
  - Commit to connecting vulnerable populations identified by FAO to unique digital identifier numbers provided by ANATS, which will be linked to the NNI nationally.

*Source: Excerpt from the provided IMF document.*

### 33. A stable and well-functioning banking sector remains essential to promote strong and

### 33. A stable and well-functioning banking sector remains essential to promote strong and inclusive growth and improve the business climate, as envisaged in the NDP

### Banking sector vulnerabilities, restructuring, and privatization
- Persistent vulnerabilities identified in the two state-owned banks: Commercial Bank of Chad (CBT) and Commercial Bank of Shari (BCC).
- Debt conversion agreements signed with one of the banks for an amount of CFAF 68 billion.
- Remainder of CFAF 100 billion, as provided for in the 2025 budget law, will be allocated to these two banks.
- Following recent governance change, the two banks are preparing restructuring plans for submission to COBAC before end-December 2025 (structural benchmark).
- Capital increases for the banks are planned for early 2026.
- Authorities committed to reviewing budget implications as part of preparing the 2026 budget law to allow for implementation without delay.
- Privatization efforts for two other public banks:
  - Banque Agricole du Chari (BAC) and Banque de l'Habitat du Tchad (BHT) — agreements signed and expected to be finalized shortly.
  - Authorities will submit to COBAC requests for assent on the ownership transfer of BAC and BHT (structural benchmark).
- Commitment: finalize restructuring plans for BCC and CBT, and finalize ownership transfer of BAC and BHT before the end of December 2026 (structural benchmark).
- Medium-term objective: disengage the government from the financial sector, subject to identification of suitable buyers.
- Authorities remain fully committed to supporting these efforts.

### Financial inclusion, microfinance, and payments modernization
- Commitment to strengthen financial inclusion as a component of private sector development and poverty reduction.
- Support development of viable microfinance institutions while strengthening sector supervision, regulation, and monitoring.
- In cooperation with COBAC:
  - Improve operational capacity of the Directorate of Financial and Monetary Affairs and of the Supervision of Microfinance Institutions within the Ministry of Finance, Budget, Economy, Planning and International Cooperation.
- Ensure proper implementation of the BEAC's pilot project establishing a credit bureau.
- Implement targeted financial education actions through training and support programs in coordination with technical and financial partners and consultation with the private sector.
- Build on initiatives to develop one-stop shops, support entrepreneurship, and improve credit recovery mechanisms.
- Promote the use of secure mobile payment solutions to increase access to banking and financial services.

### Governance diagnostic, anti-corruption, and oil sector transparency
- Requesting IMF support for a Governance Diagnostic (GD) to strengthen transparency, effectiveness of public institutions, and combat corruption.
  - Diagnostic to be conducted independently by IMF staff in FY2026.
  - Report will identify key institutional vulnerabilities, assess state functions most relevant to economic activity, and make priority recommendations.
  - Authorities committed to publishing the final report and implementing all mission recommendations.
  - Some recommendations to be incorporated into the ECF-supported program; others to be implemented with donor support.
- Strengthen governance of the oil sector given high oil dependency:
  - Provide IMF staff with a progress report on the audit of oil revenues since 2020.
  - Implement a visualization system (Data Analytics) for management of oil revenues (prior action).
  - Publish the final audit report by end-December 2025 (structural benchmark).
  - Incorporate audit conclusions and recommendations into program conditions for future reviews and use as basis for structural reform of the energy subsidy regime.
  - Publish oil and mining agreements with companies operating in the extractive industry, including names and nationalities of beneficial owners, on an easily accessible government website.
  - Implement an asset declaration regime for the oil sector in line with international best practices during the program period.

### Data quality, statistics, and immediate statistical actions
- Commitment to produce and disseminate quality statistical information promptly for rigorous program monitoring.
- Provide INSEED and other statistics departments with necessary financial, human, and material resources; continue partner support for financial and technical assistance.
- Plans to produce new statistics to improve long-term availability of economic information, including:
  - Publication of statistics on the international investment position.
  - Quarterly production and GDP data.
  - Expansion of scope of budgetary accounts from central government to general government.
- Shorter-term activities to complete:
  - Finalize and publish quarterly GDP data to better monitor the country's economic situation.
  - Formalize the gold sector.
  - Provide supply and use tables (SUTs) for 2005-23 at basic prices, while continuing to provide SUTs at the previous year's prices in line with 2008 SNA.
  - Progress on rebasing national accounts for years 1980-2005.
  - With IMF support, reconcile statistics produced by INSEED and the BEAC, particularly concerning the balance of payments, and prepare economic reports.

### Program monitoring, reviews, and timelines
- ECF arrangement: subject to semi-annual reviews; assessed based on periodic and continuous performance criteria and indicative targets.
- Detailed definitions, calculation modes, and reporting requirements specified in the Technical Memorandum of Understanding (TMU) attached to the Memorandum.
- Authorities, including the BEAC, will not without prior IMF approval: (i) impose or intensify restrictions on payments and transfers for current international transactions; (ii) introduce or modify MCPs; (iii) conclude bilateral payments agreements inconsistent with Article VIII.
- First and second program reviews scheduled on or after December 15, 2025, and June 15, 2026, respectively, based on performance criteria for test dates of end-June 2025 and end-December 2025.
- Technical Memorandum of Understanding (TMU) specifies:
  - Data reporting procedures, definitions and computation methods, QPCs, ITs, adjusters, prior actions and structural benchmarks.
  - Authorities to transmit to IMF staff any information or data pertinent for assessing or monitoring performance; revisions to data to be forwarded within 14 days after being made.
  - Government definition and list of public nonfinancial enterprises covered for program monitoring.

*Source: Excerpt from the Memorandum on Economic and Financial Policies (MEFP) and Technical Memorandum of Understanding (TMU) provided in the chapter.*

### 6. Tax revenue, excluding tax revenue from oil companies, is defined as all the

### 6. Tax revenue, excluding tax revenue from oil companies, is defined as all the

### Definitions of revenue components
- Tax revenue, excluding tax revenue from oil companies, is defined as all the Government's tax revenue, with the exception of oil revenue as defined under paragraph 5.
- Exceptional receipts are defined as the following payments to the Government:
  - Payments from resolution of protracted disputes between foreign companies operating in Chad and the Government in connection with their tax obligations or potential violations to laws and standards or any other legal obligations.
  - Payments from the sale or placement or privatization of Government’s assets or from the granting or renewal of licenses.
- Total Government revenue is the sum of tax revenue and non-tax revenue (as defined in GFSM 2014, Chapter 5). Oil revenue, tax revenue (as defined in paragraph 6), and exceptional receipts (as defined in paragraph 7) will be shown in the breakdown of total Government revenue report.
- Memorandum items include:
  - Oil revenue (billions of CFAF).
  - Grants (billions of CFAF).
  - External concessional borrowing (billions of CFAF).

### Definitions of expenditure and related concepts
- Total Government expenditure is the sum of:
  - Expenditure on Government employees (wages, salaries, allowances, bonuses, etc., as provided in the document “Masse salariale”; see Paragraph 11 for details);
  - Purchases of goods and services;
  - Transfers (including subsidies, grants, social benefits, and other expenses but excluding in-kind transfers to Société Nationale d’Electricité);
  - Interest payments; and
  - Capital expenditure.
- All these categories are recorded on a commitment basis, unless otherwise stated. Except for capital expenditure, which is defined in accordance with GFSM 1986, all other spending items are defined in accordance with GFSM 2014 (Chapter 6).
- Total Government expenditure also includes “dépenses avant ordonnancement” (DAO) which are not yet regularized (see paragraph 10 for details).

### Dépenses avant ordonnancement (DAO)
- DAO is defined as all expenditures which do not follow the standard spending procedure. A standard procedure comprises the chain: commitment (“engagement”), validation (“liquidation”), the authorization of payment order (“ordonnancement”), and the payment.
- Indicative target: A ceiling on emergency spending procedures (DAO), excluding the wage bill, military spending and debt service as a percent of primary spending excluding the wage bill and military spending. Military spending is spending by the Ministry of Defense, including Exceptional Security Expenses (DES) of section 88.

### Wages, subsidies, and transfers
- Wages and salaries:
  - Correspond to the compensation of all Government employees, via ordinary or in-kind payment, including civil servants and members of the state institutions and of the armed and security forces.
  - Compensation is defined as the sum of wages and salaries, allowances, bonuses, pension fund contributions on behalf of civil servants, and any other form of monetary or non–monetary payment.
  - For program monitoring, data are computed from the document “Masse salariale”, which excludes compensations to staff under certain contracts that are classified as Transfers (see Paragraph 13).
  - Quantitative performance criterion: a ceiling on wages and salaries.
- Subsidies:
  - Defined as Government current expenditure made to enterprises on the basis of the level of their production activities or the quantities or values of the goods or services they produce, sell, export, or import.
  - For program monitoring, subsidies refer to those reported in “Tableau de 4 Phases”.
- Transfers:
  - Defined as Government current expenditure to individuals, private nonprofit institutions, nongovernmental organizations (NGO), corporations, or Government units that are not included in other categories of transfers.
  - For program monitoring, transfers refer to those reported in “Tableau de 4 Phases”.

### Debt, concessionality, and domestic/external classification
- Debt is defined in accordance with paragraph 8 of the Guidelines on Public Debt Conditionality in Fund Arrangements attached to Executive Board Decision No. 16919-(20/103) and includes contracted or guaranteed commitments for which values have not been received.
- Debt is understood as a current liability created under a contractual arrangement through provision of assets or services requiring future payments in assets or services.
- Primary forms of debt include:
  - Loans (including deposits, bonds, debentures, commercial loans, buyers’ credits, repurchase agreements, official swap arrangements).
  - Suppliers’ credits (supplier permits obligor to defer payments after delivery of goods/services).
  - Lease agreements (debt is the present value at lease inception of all expected lease payments, excluding ordinary operation/repair/maintenance payments).
- Penalties and judicially awarded damages arising from failure to pay under a contractual obligation that constitutes debt are also debt.
- Domestic debt is the sum of:
  - (i) the stock of outstanding treasury securities issued in the regional (CEMAC) market; and
  - (ii) any debt other than treasury securities contracted or guaranteed by the public sector with Chadian residents and/or the BEAC.
- External debt is any debt contracted or guaranteed by the public sector with non-residents, excluding treasury securities issued in the regional (CEMAC) market and debt with the BEAC.
- Debt concessionality:
  - Debt is considered concessional if it includes a grant element of at least 35 percent, and non-concessional otherwise.
  - The grant element is defined as the difference between the nominal value of the loan and its present value, expressed as a percentage of the nominal value of the loan.
  - The present value of the debt at the date on which it is contracted is calculated as the discounted sum of all future debt service payments at the time of contracting.
  - The discount rate used for this purpose is 5 percent per annum.

### Arrears definitions and measurement
- Domestic payment arrears are defined as the sum of:
  - (i) recognized expenditure payment arrears;
  - (ii) unrecognized expenditure payment arrears; and
  - (ii) domestic debt payment arrears not paid after the due date (taking into account any applicable contractual grace periods).
- Recognized expenditure payment arrear:
  - The outstanding amount in a payment order to a private or public company for an expenditure incurred, validated and certified by the financial controller and then created by the “Direction of Ordonnancement”, is defined as a float after the payment authorization is issued by the Treasury.
  - The outstanding amount of a float is classified as a recognized expenditure payment arrear 90 days after issuance of the payment authorization.
  - These recognized expenditure payment arrears do not include domestic debt payment arrear and arrears on wage and salaries.
- Unrecognized expenditure payment arrears are defined as any potential expenditure payment arrears which have not gone through the standard spending procedure and include:
  - (i) claims related to capital expenditures incurred under public procurement contracts but which have not gone through the standard spending chain (including “décomptes”);
  - (ii) claims related to goods and services expenditures that have not gone through the standard spending chain;
  - (iii) claims related to public procurement contracts for capital expenditures that have not generated any “décomptes”.
- Domestic debt payment arrears are defined as the difference between the amount required to be paid under the contract or legal document and the amount actually paid after the payment deadline specified in the pertinent contract.
- External debt payment arrears are defined as external debt obligations of the Government and public non-financial enterprises that have not been paid when due in accordance with the relevant contractual terms (taking into account any contractual grace periods).
  - This concept excludes arrears on external financial obligations of the Government for which the creditor has accepted in writing to negotiate alternative payment schedules before the relevant payment due and excludes technical arrears that are less than six weeks.
- Indicative targets (stock of domestic expenditure payment arrears):
  - As of end-March 2025, the stock of recognized expenditure payment arrears at the Treasury was at CFAF 61.1 billion based on information in the Table "Tableau de Suivi de la Dette Interieure" (prepared by the Treasury).
  - As of end-March 2025, the stock of unrecognized expenditure payment arrears was CFAF 122.7 billion, based on information from the Table “Situation des decomptes”.

### Non–oil primary balance and social spending
- The non–oil primary balance (NOPB) is defined as the difference between:
  - (i) total Government revenue (excluding grants, oil revenue and exceptional receipts); and
  - (ii) primary expenditure on a commitment basis, which is defined as the total Government expenditure minus interest payments on domestic and external debt and foreign–financed capital expenditure.
- Social spending on cash transfers and school feeding programs is defined as the sum of:
  - (i) domestically financed Government current expenditure allocated to the Productive Social Safety Net Program (PSSNP) for cash transfers and the implementation of the unified social registry in line with World Bank program design and technical support; and
  - (ii) domestically financed Government current expenditure on school feeding programs, defined as programs facilitating access to health and nutrition within schools supported by the Food and Agriculture Organization.
- Indicative targets include:
  - A floor for the non–oil primary balance.
  - A floor on social spending on cash-transfers and school feeding programs, as defined in paragraph 18.
  - A floor on the number of additional provinces covered by the social registry, as defined in paragraph 19.

### Domestic Government financing and components
- Domestic Government financing is defined as the sum of:
  - (i) the issuance of treasury securities in the regional market (CEMAC); and
  - (ii) the contracting of any other debt to Chadian residents.
- Net Government domestic financing is subdivided into:
  - net bank financing, net securitized financing, net Government financing from BEAC, and other non-bank financing.
- Net bank financing is defined as the change in the net Government position towards the domestic commercial banks.
- Net Government financing from BEAC is defined as the change in net Government position towards the BEAC and includes the disbursements by the IMF, net of amortization.
- Net securitized financing includes the issuance of Government Treasury bonds, Treasury bills (includes prepaid interest) and bond loans (emprunts obligataires) in CFAF to domestic and regional banks net of related amortizations since the end of the previous year.
- Quantitative indicator: A ceiling on net domestic Government financing, as defined in paragraph 20.

### Quantitative Performance Criteria (QPC) and indicative targets
- Continuous QPCs require that at no point in time they are non-observed. Any non-observance must be reported promptly to Fund staff.
- Quantitative performance criteria (to be assessed cumulatively from the beginning of the calendar year to applicable test-dates):
  - A zero ceiling on the accumulation of any new external payment arrears by the Government and public non-financial enterprises (debts guaranteed by the Government). This ceiling applies continuously.
  - A zero ceiling on new non-concessional external debt contracted or guaranteed by the Government and non–financial public enterprises, with a maturity of more than one year. This ceiling applies continuously and does not include IMF financing.
    - Excluded from this ceiling are:
      - (i) normal short–term credits for imports; and
      - (ii) debt contracted before the ECF arrangement and rescheduled during this arrangement to the extent that the rescheduling is assessed to improve the overall public debt profile in terms of key indicators in the DSA (based on consultation with IMF staff).
  - A floor for the non–oil primary balance.
  - A floor on government tax revenue, excluding tax revenue from oil companies.
  - A ceiling on wages and salaries.
- Indicative targets (to be assessed cumulatively from the beginning of the calendar year to applicable test-dates):
  - A ceiling on emergency spending procedures (DAO), excluding the wage bill, military spending and debt service as a percent of primary spending excluding the wage bill and military spending.
  - A ceiling on net domestic Government financing.
  - A ceiling on the stock of domestic expenditure payment arrears (recognized and unrecognized).
  - A floor on social spending on cash-transfers and school feeding programs.
  - A floor on the number of additional provinces covered by the social registry.

*Source: 1tcdea2025001-source-pdf - 6. Tax revenue, excluding tax revenue from oil companies, is defined as all the*

### 23.  To take into account factors or changes beyond the Government’s control, the

### To take into account factors or changes beyond the Government’s control

### Adjustments to quantitative performance criteria
- If the total budgetary revenue and grants are lower than the programmed amount, because of lower oil revenue or budget support, then the ceiling on net domestic financing will be adjusted upward by 50 percent of the shortfall.
- If the total budgetary revenue and grants are larger than the programmed amount, because of higher oil revenue (excluding debt service to Glencore), budget support, and/or exceptional receipts, the excess amounts – excluding the amounts placed in the Special Account of the Treasury for Oil Price and Production Smoothing—must be used through adjustment of a combination of the following elements:
  - the floor for the non-oil primary balance will be adjusted down by 50 percent of the excess amount and the resulting additional fiscal space should be allocated to capital spending on priority priorities identified in the National Development Plan 2025-2030; and
  - the ceiling on net domestic financing will be adjusted down by 50 percent of the excess amount.
- Footnotes in the source:
  - The floor on the non-oil primary balance is not adjusted as it excludes oil revenues and budget support grants.
  - Twenty percent of total surplus oil revenue-as defined in the Oil Price and Production Smoothing Law-will be deposited at the end of the year in the Special Account of the Treasury for Oil Price and Production Smoothing, up to CFAF 10 billion.

### Reporting and data provision requirements (Table 1 summary)
- Reporting timetables and responsible providers (selected highlights):
  - Oil and non–oil revenue, with detailed breakdown by each revenue/tax type (including non-tax revenues): Ministry of Finance, Budget, Planning, and International Cooperation (Treasury). Monthly, within 45 days of month–end.
  - Quarterly EY Report on Oil Export Sales: Ministry of Finance, Budget, Planning, and International Cooperation. Quarterly, within 45 days of quarter-end.
  - Budget execution data showing commitments, validations, authorizations of payment order, and cash payments; payroll table, including benefits: Ministry of Finance, Budget, Planning, and International Cooperation; General Budget Directorate (DGB). Monthly, within 45 days after month–end.
  - Table of expenditure on a commitment basis; TOFE on a cash basis; comparative table on budget execution, consolidated balance tables; consolidated Treasury balance: Ministry of Finance, Budget, Planning, and International Cooperation; General Budget Directorate; DGTCP. Monthly, within 45 days of month–end.
  - TOFE on a commitment basis: Ministry of Finance, Budget, Planning, and International Cooperation. Quarterly, within 45 days of quarter-end.
  - Pay table presenting the wage bill by ministry, including a breakdown between base salary, bonuses and allowances: Ministry of Finance, Budget, Planning, and International Cooperation (Dirección de la Solde). Monthly, within 30 days of month–end.
  - Detailed statistics of public sector employment (by ministry) and military personnel: Ministry of Finance, Budget, Planning, and International Cooperation (Dirección de la Solde). Monthly, within 30 days of month–end.
  - Detailed use of Government oil (4 million barrels) sold to the refinery, including the exact amount of the subsidy to the electricity company: DGB; SHT. Quarterly, within 45 days of the end of the quarter.
  - Execution of the investment budget, including detailed project by project execution for domestically and externally financed investment: Ministry of Finance, Budget, Planning, and International Cooperation. Quarterly, within 45 days of the end of the quarter.
  - Information on DAO use (by ministry, category, civilian/military, budget code) and regularization: Ministry of Finance, Budget, Planning, and International Cooperation. Quarterly, within 60 days after the end of the Quarter.
  - Details by social spending allocated to the Productive Social Safety Net Program (PSSNP), and the school feeding program: Ministry of Finance, Budget, Planning, and International Cooperation. Annually, within 180 days of year end.
  - Information on public procurement in the previous month and updating of payment maturity for the rest of the year: Ministry of Finance, Budget, Planning, and International Cooperation (Financial Control)/SGG (OCMP/Procurement Directorate). Monthly, within 45 days of month–end.
  - Table on external debt (including those in local currency) with previous month’s due payments, payments made, and projected payments due for the next 3 months broken down by creditors: Ministry of Finance, Budget, Planning, and International Cooperation. Monthly, within 45 days of month-end.
  - Information on external debt arrears (including those in local currency): Ministry of Finance, Budget, Planning, and International Cooperation. Monthly, within 45 days of month-end.
  - In case of missed external debt service payment provide: i) the date of the missed payment; ii) amount of the missed payment and iii) creditor involved: Ministry of Finance, Budget, Planning, and International Cooperation. Within 14 days of occurrence.
  - Monetary survey and provisional monetary data (exchange rates, foreign reserves, assets and liabilities of the monetary authorities, base money, broad money, central bank balance sheet, consolidated balance sheet of the banking system, interest rates): BEAC. Monthly, within 45 days of month–end.
  - Balance of SDR account at month end: BEAC; NGP Committee. Monthly, within 3 months of month–end.
  - Net banking system claims on the Government (NGP): BEAC. Monthly, within 30 days of month–end.
  - Data on balances and main transactions of oil revenue offshore account: Ministry of Finance, Budget, Planning, and International Cooperation; DGTCP. Quarterly, within 45 days of the end of the quarter.
  - Consumer price index: INSEED. Monthly, within 45 days of month–end.
  - Quarterly Industrial Production Index and Quarterly Gross Domestic Product with support from ongoing IMF TA: INSEED. Quarterly, within 180 days of quarter-end.
  - Detailed data on oil sector activity (by operator) including: production, exports, export price, DOBA discount, transportation costs, CAPEX, OPEX: SHT. Quarterly, within 45 days of the end of the quarter.
  - Gross domestic product and gross national product: Macroeconomic Framework Committee (SG MFB) and INSEED. Annually, within 180 days of year end.
  - Balance of payments (External current account balance, exports and imports of goods and services, etc.): BEAC. Annually, within 180 days of year end (preliminary data).
  - Gross external debt: Ministry of Finance, Budget, Planning, and International Cooperation; DGTCP. Annually, within 90 days of year end.
- Additional notes:
  - For end-December fiscal data, data should be reported 45 days after the end of the complementary period.
  - Including maturities and breakdown by currency and maturity where specified.
  - Interest rates: Both market-based and officially determined, including discounts, money market rates, and rates on treasury bills, bonds and other securities.

### Debt coverage, contingent liabilities, and stress testing
- Public debt coverage includes central government debt, and government guaranteed external debt owed by the public oil company (Société des Hydrocarbures du Tchad or SHT).
- Most other public sector entities do not have access to external financing, except SRN (Société de Raffinage de N’Djaména) which has two loans with CNPC Finance and EXIM Bank China; SRN is minority government-owned (40 percent share) and its debt is not integrated in the perimeter of the DSA.
- Since the last exercise in the 2024 Article IV staff report, the DSA considers external debt on a residency basis for loans only; CFAF-denominated loans contracted with the regional development bank (BDEAC) and with bilateral creditors in the currency union (Cameroon, Equatorial Guinea, and the Republic of Congo) are considered external debt.
- Debt owed to Angola, which is being repaid in kind, is classified as external debt.
- The contingent liability tailored stress test:
  - Total stress-test amount: 12 percent of GDP.
  - Components:
    - Financial market shock: 5 percent of GDP.
    - SOE debt (guaranteed and not guaranteed): 5.5 percent of GDP (reflecting liabilities of SRN, SNE, and SONACIM from a 2017 SOE Census).
    - Modelled public arrears of regional and local governments: 1.5 percent of GDP.
  - Rationale: 5 percent of GDP for financial markets reflects the estimated average cost to the government of a financial crisis in a low-income country since 1980.

### Debt sustainability assessment and key judgments
- Risk ratings:
  - Risk of external debt distress: High
  - Overall risk of debt distress: High
  - Granularity in the risk rating: Sustainable
  - Application of judgment: Yes
- Key observations:
  - Despite improvements to the debt outlook and a mechanical moderate external and overall debt distress rating, Chad’s external and overall public debt continues to be assessed at high risk of distress, with the application of judgment due to risks surrounding the baseline projections.
  - The proposed economic program supported by an Extended Credit Facility aims to implement the National Development Plan (2025-2030) while strengthening debt sustainability, but significant uncertainty remains regarding authorities’ ability to fully execute proposed policies if risks materialize.
  - Noted uncertainties include non-oil revenue enhancing measures, oil prices, spending containment measures, and projected declines in external financing reflecting trade and geopolitical tensions.
  - Until the authorities implement the proposed program (monitored through prior actions, quantitative targets, and structural benchmarks) and build necessary buffers, judgment will be applied to continue assessing the risk of external debt distress as high.
- Additional data point:
  - Chad’s composite indicator of 2.44 (based on the April 2024 WEO and the June 2024 CPIA) signals a weak debt-carrying capacity.

### Background: evolution and composition of public debt
- Trends and magnitudes:
  - Gross public debt: decreased from 41.6 percent of GDP at end-2021 to 32.1 percent at end-2022; increased to 32.3 percent of GDP at end-2023; reached 32.8 percent of GDP at end-2024.
  - Outstanding PPG external and domestic debt was estimated to stand at almost US$6.3 billion at end-2024.
  - Domestic debt increased from 14.4 percent of GDP in 2022 to 15.6 percent of GDP in 2024.
  - Public securities rose from 6 percent of GDP in 2022 to 8.1 percent of GDP in 2024.
  - Bonds increased by more than 40 percent since 2022.
  - Domestic arrears at end-2024: CFA 324 billion, about 1.7 percent of GDP—the lowest level since 2014.
- Composition notes:
  - External PPG debt dominated by non-Paris Club lenders and multilateral organizations; debt owed to private creditors has decreased.
  - Debt to multilateral creditors continued to decrease in 2024 as reimbursement to the IMF for the 2017 ECF has progressively accelerated since 2023.
  - World Bank project financing disbursements have increased as grants in 2024 (not impacting debt).
  - Chad’s debt to its main private creditor, Glencore, has significantly declined following accelerated reimbursements under the cash sweep clause linked to high oil prices since 2022.
  - Debt to non-Paris Club bilateral creditors has markedly increased recently.
  - The government secured concessional loans in 2024 with the Islamic Development Bank, the European Investment Bank, and the Hungarian Development Bank for project financing.
- Debt treatment context:
  - Chad’s debt treatment under the G20 Common Framework lapsed in June 2024, alongside the expiration of the ECF arrangement.
  - In late 2022, the authorities signed two debt treatment agreements on comparable terms: one with G20 bilateral creditors and another with the country’s largest private creditor.
  - The private creditor agreed to a short-term reprofiling to help bring external debt service-to-revenue below 14 percent by 2024.
  - The official creditor agreement committed to additional relief if an external shock prevented Chad from maintaining that threshold, assuming full implementation of the ECF-supported program.
  - The combination of private debt reprofiling, high oil revenues, and additional concessional financing reduced debt service below the 14 percent threshold, rendering further G20 creditor relief unnecessary.

*Prepared by the Staff of the International Monetary Fund (IMF) and the International Development Association (IDA).*

### 7.      Debt increased mainly due to new external borrowing, as domestic market financing

### 7.      Debt increased mainly due to new external borrowing, as domestic market financing

### Debt dynamics and liquidity support (2024–Q1 2025)
- Domestic market financing remained constrained by saturated regional markets in 2024, limiting capacity to mobilize financing through public securities issuances.
- The number of failed auctions increased throughout 2024, reducing net issuances from 0.5 percent of GDP in the first half of the year to 0.1 percent in the second half.
- Fiscal revenues fell short by 0.5 percent of non-oil GDP in 2024, due to lower-than-expected oil production.
- Primary spending increased (+1.8 percent of non-oil GDP) driven by exceptional spending on transfers and subsidies for the refugee and food security crises and capital spending for public works related to the historical floods.
- Significant external liquidity support in late 2024:
  - Second installment of the US$1.5 billion loan agreement with the Abu Dhabi Fund for Development: US$500 million (2.6 percent of GDP) disbursed in November.
  - Purchase of approximately CFAF 50 billion (0.4 percent of GDP) treasury bonds by Afreximbank in December.
- Improved regional financing conditions in Q1 2025:
  - T-bond auction bid-to-cover-ratios recovered to 80 percent from 60 percent in the second half of 2024.
  - Government raised CFAF 68 billion (US$112 million, 0.5 percent of GDP) through T-bond sales by end-March 2025, at yields slightly below the 10 percent average in 2024.

### Arrears status and creditor engagements
- A debt restructuring agreement with BDEAC was signed in October 2024, outlining clearance of arrears over the course of 2025; some technical delays affected monthly repayments in early 2025 but are being resolved.
- As of end-March 2025, four debt obligations to official and commercial creditors remain in arrears:
  - Libya: Mutual agreement on partial cancellation and concessional reprofiling reached in discussions; formal signing pending but likely in coming months.
  - Republic of Congo: Ongoing discussions concerning a clearance plan for recently accumulated arrears on interest payments on CFA-denominated debt restructured in 2022; no proposal yet.
  - Cameroon: Talks expected to start in the coming months; resolution anticipated in the short to medium term.
  - Commercial Bank Mega: Settlement process actively progressing since early 2025; full clearance expected in the short term, ideally before the first program review.
- Angola: Repayments under a 2018 agreement were to be made in kind (shipments of live cattle); transport arrangements proved unworkable; Chadian authorities ready to resume shipments when conditions allow.
- Belgium (Credendo): A restructuring agreement was signed in April 2024, but Chad suspended the first repayment citing concerns linked to an ongoing judicial investigation; dispute under amicable resolution (not classified as arrears).

### Debt management capacity and IMF/World Bank support
- Chad faces important capacity challenges in debt management, including data inconsistencies and difficulties producing timely and reliable debt service projections.
- Since 2020, an interdepartmental IMF technical assistance (TA) project has supported implementation of a Medium-Term Debt Management Strategy, domestic issuance planning, and sovereign debt risk management.
- A December 2024 mission identified capacity gaps, leading to a May 2025 training workshop for the National Debt Strategy Commission.
- World Bank TA since 2022 assisted legal reforms (resulting in a Presidential decree on public debt policy and management), debt data reconciliation (2024–2025 DRS submissions), reporting, and strategy development (2024 strategy adoption).
- Program support measure: centralization of debt statistics compilation in the Directorate General of the Treasury to improve coordination, data accuracy, forecasts, and development of regular financing plans and a debt management strategy.

### Macroeconomic forecasts and fiscal path (ECF-supported program alignment)
- Program pillars:
  - Create fiscal space through tax administration and policy reforms and streamlining current spending, ensuring sustainable fiscal policy and financing of key development projects.
  - Support more inclusive and sustainable growth.
  - Improve economic and financial governance.
- Key macro assumptions and projections:
  - Short-term GDP growth projections slightly revised downward vs the previous DSA; medium-term growth expected to gradually accelerate as structural reforms take hold.
  - Oil sector:
    - Oil production projected to be less volatile and to grow more robustly than previously estimated due to new oil rigs offsetting declines from aging fields.
    - Significant capital expenditure projects expected to raise investments to 3.4 percent of GDP in 2025 and 4.7 percent in 2027 (up from 1.7 percent in 2024).
    - Production expected to increase by more than 12 percent between 2026 and 2029 as new fields come on stream.
    - Based on current extraction plans, oil output could begin to decline gradually from 2031 absent substantial new capital investment.
  - Non-oil output:
    - Expected to soften in the near term, growing by 3.5 percent in 2026 and 2027.
    - Non-oil GDP growth projected to rebound later as reforms take effect.
  - Inflation expected to decline gradually to 3 percent by 2028.
- Fiscal consolidation and composition:
  - Fiscal path revised to account for higher-than-expected spending in 2024 and tighter assumptions for 2025–2029.
  - 2024 higher-than-expected spending reflects emergency investment, humanitarian support, and heavy floods.
  - Planned expenditure reductions over the program: cut the wage bill by 0.7 percentage points and transfers and subsidies by 0.5 percentage points while increasing social protection over the four years.
  - 2025 will be less favorable due to higher-than-previously-projected interest payments to Glencore and a 0.8 percent of GDP recapitalization plan for the two national banks.
  - Projected consolidation tighter than previous DSA: 2.6 percent of non-oil GDP in expenditure cuts compared to 1.7 percent previously.
- Revenue composition and volatility:
  - Fiscal revenue remains highly reliant on the oil sector, which accounts for more than half of it (excluding grants) in 2024.
  - Oil-related revenues expected to remain volatile, declining in 2025 and 2026 before recovering (U-shaped price trajectory).
  - Artisanal mineral extraction implied by trade data: around 3.8 percent of GDP in 2025; oil extraction represents 13.7 percent of GDP in Chad.
- External sector and reserves:
  - After a historic surplus in 2022, the current account narrowed in 2023–2024 and projected to return to a deficit from 2025 onwards due to substantial imports.
  - Trade surplus in goods widened with inclusion of gold exports into the balance of payments starting in 2012.
  - Foreign direct investment revised upward, particularly in energy and industrial sectors.
  - Reserve accumulation anticipated to continue, contributing to the regional effort.

### Financing plan, IMF role, and risks
- Comprehensive financing plan for the four-year program includes IMF financing and external concessional budget support from multilateral and bilateral donors.
- Staff estimates a balance of payments financing gap of US$2 billion throughout the program.
  - Drivers: projected gradual fall of oil prices, high development spending needs, low attractiveness for foreign investments, and need to contribute to reserve accumulation at the regional level.
- IMF catalytic role:
  - Proposed ECF arrangement expected to cover about 30 percent of the financing gap and catalyze additional budget support from multilateral donors and bilateral donors including the UAE and others.
  - UAE MoU (2023) for budget support financing amounting to US$1.5 billion: US$150 million disbursed in 2023 and US$500 million in 2024; remaining US$850 million expected to be disbursed over the program period based on yearly negotiations.
- Financing strategy relies on concessional external financing and limits net issuances of treasury securities in the regional market due to market saturation and high costs, progressively shifting debt structure from domestic to foreign sources.
- Key risks to the baseline:
  - Fragility: Chad is highly vulnerable to climate shocks, ongoing conflict on the western border in Darfur, and insecurity in the Lake region and North.
  - Fiscal revenue sensitivity to global oil price volatility and potential downward trends.
  - Financing plan uncertainty: major contribution based on a memorandum of understanding with a bilateral partner, exposing the strategy to geopolitical risks.
  - Potential reductions in official development assistance and humanitarian aid.
  - Structural governance and debt management deficiencies, weak capacity to implement reforms, and risk of waning reform commitment that could jeopardize the ECF-supported program and raise debt vulnerabilities.

### Policy recommendations and program measures
- Centralize debt statistics compilation in the Directorate General of the Treasury to:
  - Ensure better coordination between relevant directorates and ministries.
  - Improve accuracy of debt data and support preparation of forecasts.
  - Contribute to development of a regular financing plan and debt management strategy to inform budget preparation.
- Implement proposed program pillars:
  - Tax administration and policy reforms and streamlining of current spending to create fiscal space.
  - Strengthen social safety nets and prioritize efficient public investment.
  - Improve economic and financial governance and continue capacity-building via IMF and World Bank TA (including training on debt reporting and debt management).

### Selected numeric indicators (as reported)
- Net issuances of public securities: 0.5 percent of GDP (first half 2024) → 0.1 percent of GDP (second half 2024).
- Fiscal revenues shortfall: 0.5 percent of non-oil GDP (2024).
- Primary spending increase: +1.8 percent of non-oil GDP (2024).
- Abu Dhabi Fund for Development disbursement: US$500 million (2.6 percent of GDP) in November 2024.
- Afreximbank purchase of treasury bonds: approximately CFAF 50 billion (0.4 percent of GDP) in December 2024.
- T-bond sales by end-March 2025: CFAF 68 billion (US$112 million, 0.5 percent of GDP).
- T-bond auction bid-to-cover-ratios: recovered to 80 percent from 60 percent.
- Yields: slightly below the 10 percent average in 2024 for Q1 2025 issuances.
- Public investment projects: 3.4 percent of GDP in 2025 and 4.7 percent in 2027 (up from 1.7 percent in 2024).
- Production increase: more than 12 percent between 2026 and 2029.
- Non-oil output growth: 3.5 percent in 2026 and 2027.
- Inflation target: 3 percent by 2028.
- Fiscal consolidation: 2.6 percent of non-oil GDP in expenditure cuts (program) vs 1.7 percent previously.
- Oil sector share of fiscal revenue: more than half (excluding grants) in 2024.
- Balance of payments financing gap: US$2 billion throughout the program.
- IMF ECF coverage of financing gap: about 30 percent.
- UAE MoU budget support: US$1.5 billion total; disbursed US$150 million in 2023 and US$500 million in 2024; remaining US$850 million expected over the program period.
- Artisanal mineral extraction implied: around 3.8 percent of GDP in 2025.
- Oil extraction: 13.7 percent of GDP in Chad.

*Source: IMF staff report (selected excerpts).*

### 16.      The DSA relies on six standard stress tests and a customized oil commodity price shock

### 16.      The DSA relies on six standard stress tests and a customized oil commodity price shock

### Stress tests and key vulnerability
- The DSA uses six standard stress tests and a customized oil commodity price shock stress test.
- The commodity price shock assumes a one-standard deviation decline in oil prices from 2025- 2030, corresponding to a 29 percent fall in the price of oil.
- Of the stress tests, the natural disaster and the commodity price shock have the most relevance for Chad.
- Despite the severity of most simulated shocks, the analysis focuses on the commodity price shock, to which Chad is particularly vulnerable.

### Climate change, adaptation, and mitigation financing needs
- Chad faces severe environmental degradation, including the shrinking of Lake Chad, accelerating desertification, and recurring droughts and floods.
- Adaptation needs:
  - Chad needs around US$5 billion (about 26 percent of 2023 GDP) by 2030 to strengthen resilience to climate impacts.
  - The authorities have committed to mobilizing US$1.2 billion (6.2 percent of 2023 GDP) domestically, leaving a sizable financing gap.
  - Securing additional and sustained international support will be critical to meeting Chad’s climate and development goals.
- Mitigation needs:
  - Mitigation efforts aimed at reducing emissions by 19.3 percent by 2030 are estimated to cost approximately US$6.7 billion (about 35 percent of 2024 GDP), posing a significant feasibility challenge given the country’s limited fiscal space.

### Natural disaster stress test calibration and implications
- The DSA’s natural disaster module incorporates:
  - a hypothetical one-off shock of 10 pp of nominal GDP to the external debt-to -GDP ratio in the first year of the projection period;
  - a 1.5 pp shock to real GDP growth; and
  - a 3.5 pp shock to exports growth.
- While this natural disaster shock is illustrative and may be unlikely under current calibrations, it highlights potential adverse effects of climate-related shocks on debt dynamics.

### Debt sustainability assessment (baseline and judgment)
- Chad continues to be assessed as presenting a “high risk” of external debt distress, consistent with the previous DSA of December 2024.
- The proposed fiscal framework:
  - aims to support implementation of the new National Development Plan while strengthening Chad’s debt sustainability;
  - relies on concessional budget support loans and a progressive consolidation path, which maintain the PV of external debt-to -GDP at a low level and keep the debt service-to -revenue ratio significantly below the risk threshold.
- Mechanical outcome:
  - The framework leads to a mechanical moderate risk of distress (Table 1 and Figure1).
- Judgment and risks:
  - Significant uncertainty surrounds the baseline projection.
  - The temporary increase in debt service in 2027 and 2028, due to the postponed Glencore repayment set in the 2022 debt restructuring agreement, indicates limited space to absorb adverse shocks.
  - A negative shock to global oil prices (illustrated by the commodity price shock), or a delay in expected financing support could result in a liquidity squeeze, jeopardizing essential spending on humanitarian aid, social support or investment in the event of a forced adjustment.
  - Until the authorities implement the proposed economic program, structured with prior actions and scheduled structural benchmarks, and build necessary buffers to absorb potential shocks, judgement will be applied to continue assessing the risk of external debt distress as high.

### Public debt distress and domestic debt dynamics
- Chad’s risk of public debt distress also remains high.
- Financing assumptions of the proposed macroframework:
  - limit net issuances of treasury securities in the regional market, leading to a progressive decline of domestic debt before stabilizing at 10 percent of GDP in the long term.
  - As fiscal policy becomes more sound and external debt more concessional, debt and debt service gradually decrease, leading mechanically to a moderate risk assessment of overall public debt distress.
- Given uncertainty on baseline projections (revenues, expenditures, exogenous risks, and weak implementation risk), judgement will be applied to maintain the risk assessment of public debt distress as high.

### Impact of the commodity price shock versus natural disaster shock
- Commodity price shock:
  - Represents the main vulnerability of overall public and external debt.
  - Adverse scenario analysis indicates a commodity price shock could lead to a significant deterioration in outstanding debt stock and debt service in the baseline scenario.
  - The external debt service-to -revenue ratio would almost reach the risk threshold in 2028.
  - The PV of public debt-to -exports ratio breaches the risk threshold in 2027 and remains well above thereafter.
- Natural disaster shock:
  - In contrast, the stress resulting from a natural disaster shock event could be contained in the baseline scenario.
  - Although the debt stock would significantly increase after the shock, additional debt service would remain limited.

### Overall conclusion and policy implications
- Overall, debt remains sustainable: all debt and debt service indicators are stable in the short to medium term and trend downwards in the long term under the baseline.
- Key policy implications and actions implied by the analysis:
  - Implement the proposed fiscal consolidation and essential reforms to realize the baseline.
  - Build buffers to absorb potential shocks, notably to mitigate exposure to oil price declines.
  - Mobilize additional and sustained international financial support to meet adaptation and mitigation financing gaps.

*Source: 1tcdea2025001-source-pdf - 16.      The DSA relies on six standard stress tests and a customized oil commodity price shock*

### 22.      The authorities consider the risk of external debt distress to be moderate, reflecting

### 22.      The authorities consider the risk of external debt distress to be moderate, reflecting

### Authorities' assessment and policy stance
- The authorities consider the risk of external debt distress to be moderate, reflecting the low level of external public debt and the improved debt service profile following the reprofiling of the Glencore loan under the 2022 debt restructuring agreement.
- The authorities stress their continued commitment to prudent borrowing practices:
  - seeking only concessional external financing;
  - limiting new domestic security issuance in light of current conditions in the regional financial market.
- The authorities remain fully committed to implementing the proposed economic program, which will:
  - support macroeconomic stability;
  - build fiscal buffers;
  - strengthen debt sustainability over the medium term.

### External Debt Sustainability — Key indicators and projections (2022–45)
- External debt (nominal) 1/: 17.7 16.7 17.2 17.9 20.2 21.2 21.7 21.4 20.9 17.9 14.4 19.8 19.9
- of which: public and publicly guaranteed (PPG): 17.7 16.7 17.2 17.9 20.2 21.2 21.7 21.4 20.9 17.9 14.4 19.8 19.9
- Change in external debt: -3.8 -1.0 0.5 0.7 2.3 1.8 -0.4 -0.3 -0.5 -0.6 -0.3
- Identified net debt-creating flows: -7.3 -1.7 -4.0 -0.6 -0.9 -1.4 -1.9 -2.4 -2.2 -3.9 2.0 0.1 -2.5
- Non-interest current account deficit: -4.8 0.4 -1.3 1.9 3.2 3.0 2.9 3.0 3.2 0.8 5.7 1.8 2.2
- Deficit in balance of goods and services: -3.5 1.5 -0.3 2.7 3.9 3.7 3.5 3.5 3.6 1.6 6.2 5.8 3.0
- Exports (percent of GDP): 34.7 31.0 32.4 29.6 28.3 27.8 27.6 27.2 26.7 22.8 12.7
- Imports (percent of GDP): 31.2 32.5 32.0 32.2 32.3 31.5 31.1 30.7 30.2 24.4 18.9
- Net current transfers (negative = inflow): -3.6 -3.0 -2.6 -2.4 -2.2 -2.0 -1.7 -1.5 -1.4 -0.9 -0.4 -5.3 -1.5
  - of which: official: -0.9 -0.8 -0.5 -0.5 -0.5 -0.5 -0.6 -0.6 -0.6 -0.7 -0.8
- Other current account flows (negative = net inflow): 2.3 2.0 1.7 1.7 1.4 1.2 1.1 1.1 1.0 0.1 -0.1 1.3 0.7
- Net FDI (negative = inflow): -1.6 -2.0 -1.9 -2.6 -3.8 -4.0 -4.3 -4.9 -4.8 -4.2 -3.3 -2.3 -4.2
- Endogenous debt dynamics 2/: -0.9 -0.2 -0.8 0.1 -0.3 -0.4 -0.5 -0.6 -0.6 -0.4 -0.4
  - Contribution from nominal interest rate: 0.4 0.4 0.3 0.6 0.3 0.3 0.3 0.3 0.3 0.2 0.1
  - Contribution from real GDP growth: -0.9 -0.9 -0.5 -0.6 -0.6 -0.6 -0.8 -0.8 -0.8 -0.6 -0.5
  - Contribution from price and exchange rate changes: -0.3 0.3 -0.5 ...
- Residual 3/: 3.5 0.7 4.5 1.4 3.3 3.2 1.5 2.2 1.7 3.3 -2.3 -0.6 2.5
  - of which: exceptional financing: -1.1 -0.2 0.0 -0.4 -0.6 -0.7 -0.7 -0.3 0.0 0.0 0.0

Sustainability indicators (selected)
- PV of PPG external debt-to-GDP ratio: ......14.6 14.8 16.0 16.8 16.3 15.9 15.5 12.9 10.5
- PV of PPG external debt-to-exports ratio: ......45.2 50.2 56.4 60.4 59.2 58.6 58.0 56.6 83.3
- PPG debt service-to-exports ratio: 7.5 6.3 6.2 6.8 4.2 5.3 5.5 4.4 3.9 4.8 5.8
- PPG debt service-to-revenue ratio: 16.9 13.0 13.4 13.0 8.9 10.7 10.8 8.6 7.5 7.7 5.6
- Gross external financing need (Million of U.S. dollars): -689.3 76.9 -239.9 268.1 125.6 106.9 23.9 -176.6 -164.8 -836.4 1867.7

Key macroeconomic assumptions (selected)
- Real GDP growth (in percent): 4.7 5.0 3.5 3.3 3.6 3.3 3.7 4.0 4.1 3.4 3.6 2.4 3.6
- GDP deflator in US dollar terms (change in percent): 1.6 -1.6 2.8 -0.3 2.1 1.8 1.9 1.9 1.9 1.8 2.2 -1.0 1.8
- Effective interest rate (percent) 4/: 1.9 2.1 1.6 3.7 1.6 1.5 1.3 1.3 1.3 0.9 0.7 2.8 1.5
- Growth of exports of G&S (US dollar terms, in percent): 35.4 -7.7 11.0 -5.8 1.3 3.2 4.8 4.7 3.9 1.6 1.8 5.3 2.1
- Growth of imports of G&S (US dollar terms, in percent): 0.0 7.7 4.8 3.7 5.9 2.7 4.2 4.5 4.4 1.7 3.4 2.0 2.8
- Grant element of new public sector borrowing (in percent): .........41.1 40.2 43.0 42.5 48.1 52.0 48.8 47.4 ...46.6
- Government revenues (excluding grants, in percent of GDP): 15.4 15.1 14.9 15.5 13.3 13.7 14.0 13.9 14.1 14.1 13.0 11.0 14.1
- Aid flows (in Million of US dollars) 5/: 198.9 178.0 474.0 936.9 1229.1 1235.6 850.3 999.8 1088.1 1274.1 1752.2
- Grant-equivalent financing (in percent of GDP) 6/: .........4.1 4.7 4.9 3.8 3.9 3.9 3.5 2.9 ...4.0
- Grant-equivalent financing (in percent of external financing) 6/: .........68.1 65.9 68.1 76.4 80.0 84.1 84.0 83.3 ...78.8
- Nominal GDP (Million of US dollars): 18052 18638 19836 20442 21606 22736 24021 25461 27003 35340 60391.6
- Nominal dollar GDP growth: 6.3 3.2 6.4 3.1 5.7 5.2 5.7 6.0 6.1 5.3 5.8 1.4 5.4

Memorandum items
- PV of external debt 7/: ......14.6 14.8 16.0 16.8 16.3 15.9 15.5 12.9 10.5
  - In percent of exports: ......45.2 50.2 56.4 60.4 59.2 58.6 58.0 56.6 83.3
- Total external debt service-to-exports ratio: 7.5 6.3 6.2 6.8 4.2 5.3 5.5 4.4 3.9 4.8 5.8
- PV of PPG external debt (in Million of US dollars): 2904.4 3034 3454.7 3817.5 3921.9 4060.5 4178.6 4565.8 6361.4
- (PVt-PVt-1)/GDPt-1 (in percent): 0.7 2.1 1.7 0.5 0.6 0.5 0.2 0.4
- Non-interest current account deficit that stabilizes debt ratio: -0.9 1.4 -1.8 1.2 0.9 1.1 3.3 3.3 3.7 1.3 6.0

Sources: Country authorities; and staff estimates and projections.

### Public Sector Debt — Key indicators and projections (2022–45)
- Public sector debt 1/: 32.1 32.3 32.8 33.0 34.2 34.7 33.3 32.0 31.3 28.1 24.4 36.3 31.4
- of which: external debt: 17.7 16.7 17.2 17.9 20.2 21.2 21.7 21.4 20.9 17.9 14.4 19.8 19.9
- Change in public sector debt: -9.5 0.2 0.5 0.3 1.2 0.5 -1.4 -1.3 -0.7 -0.6 -0.4
- Identified debt-creating flows: -8.0 -0.4 0.8 0.5 1.0 0.7 -1.0 -1.3 -1.6 -1.2 -0.6 -0.4 -0.7
- Primary deficit: -4.6 0.4 0.9 -0.2 1.3 1.1 0.2 -0.1 -0.4 -0.4 0.2 -0.4 -0.0
- Revenue and grants (percent of GDP): 16.1 15.6 16.7 18.3 16.4 16.9 16.9 16.9 17.2 17.0 15.4 12.6 17.1
  - of which: grants: 0.8 0.5 1.8 2.8 3.1 3.2 2.9 3.0 3.1 2.9 2.4
- Primary (noninterest) expenditure (percent of GDP): 11.6 16.0 17.6 18.0 17.7 18.0 17.1 16.8 16.9 16.6 15.5 12.2 17.1

Automatic debt dynamics and other contributions (selected)
- Automatic debt dynamics: -4.6 0.4 -0.1 0.1 -0.7 -0.7 -0.9 -1.1 -1.1 -0.8 -0.7
  - Contribution from interest rate/growth differential: -4.7 -0.5 -0.7 0.1 -0.7 -0.7 -0.9 -1.1 -1.1 -0.8 -0.7
    - of which: contribution from average real interest rate: -2.8 1.1 0.4 1.1 0.4 0.4 0.3 0.2 0.2 0.1 0.1
    - of which: contribution from real GDP growth: -1.9 -1.5 -1.1 -1.1 -1.1 -1.1 -1.2 -1.3 -1.2 -1.0 -0.9
- Contribution from real exchange rate depreciation: 0.0 0.8 0.6 ...
- Other identified debt-creating flows: 1.2 -1.2 0.0 0.6 0.4 0.3 -0.2 -0.1 -0.2 0.0 0.0 -0.1 0.1
- Deposit accumulation/withdrawals: 1.4 -1.6 0.0 -0.2 0.4 0.3 -0.2 -0.1 -0.2 0.0 0.0

Sustainability indicators (selected)
- PV of public debt-to-GDP ratio 2/: ......30.7 29.8 30.0 29.4 28.0 26.5 25.8 23.2 20.5
- PV of public debt-to-revenue and grants ratio: ......183.7 163.2 182.7 173.5 165.0 156.6 150.2 136.5 133.6
- Debt service-to-revenue and grants ratio 3/: 21.9 23.8 28.8 35.8 46.9 45.6 40.0 33.0 25.7 26.6 27.1
- Gross financing need 4/: 0.1 2.9 5.7 6.6 9.0 8.8 6.9 5.5 4.1 4.1 4.3

Key macroeconomic and fiscal assumptions (selected)
- Real GDP growth (in percent): 4.7 5.0 3.5 3.3 3.6 3.3 3.7 4.0 4.1 3.4 3.6 2.4 3.6
- Average nominal interest rate on external debt (in percent): 2.0 2.1 1.6 3.9 1.6 1.5 1.3 1.3 1.3 0.9 0.7 2.8 1.5
- Average real interest rate on domestic debt (in percent): -9.5 9.5 3.4 6.3 3.5 3.6 3.4 3.0 2.8 3.0 3.0 2.1 3.3
- Inflation rate (GDP deflator, in percent): 14.1 -4.2 2.8 0.2 1.5 1.9 1.9 2.0 1.9 1.8 2.2 0.8 1.8
- Growth of real primary spending (deflated by GDP deflator, in percent): -1.1 45.0 13.9 6.1 1.8 5.1 -1.7 2.1 4.4 3.4 3.3 5.2 3.0
- Primary deficit that stabilizes the debt-to-GDP ratio 5/: 4.9 0.2 0.4 -0.5 0.2 0.6 1.5 1.2 0.3 0.2 0.5 1.8 0.4
- PV of contingent liabilities (not included in public sector debt): 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Sources: Country authorities; and staff estimates and projections.

### Stress tests, scenarios, and sensitivity analyses
- Stress tests examine alternative scenarios and tailored tests (e.g., commodity price shocks, exports shocks, natural disaster, combined contingent liabilities).
- Figure 1 and Figure 2 summarize indicators of Public and PPG External Debt under alternative scenarios, 2025-35, noting:
  - The most extreme stress test is defined as the test that yields the highest ratio in or before 2035.
  - All additional financing needs generated by the shocks under the stress tests are assumed to be covered by PPG external MLT debt in the external DSA.
  - Default terms of marginal debt are based on baseline 10-year projections.
- Sensitivity analysis highlights (Table 3 and Table 4 excerpts):
  - Baseline PV of debt-to-GDP ratio (selected years): 15 16 17 16 16 15 14 14 13 13 (2025–2035 row headers indicate series)
  - Alternative scenarios and bound tests produce higher ratios under shocks such as:
    - A1. Key variables at their historical averages in 2025-2035
    - A2. Natural Disaster Shock
    - B-series bound tests (B1 Real GDP growth; B2 Primary balance; B3 Exports; B4 Other flows; B5 Depreciation; B6 Combination)
    - C-series tailored tests (C1 Combined contingent liabilities; C3 Commodity price; C4 Market Financing)
  - Table 3 and Table 4 report multiple metrics (Debt service-to-exports ratio; Debt service-to-revenue ratio; PV of debt-to-exports ratio; PV of debt-to-GDP ratio; PV of Debt-to-Revenue Ratio; Debt Service-to-Revenue Ratio) across scenarios and years.
- Figure 3 and Figure 4 provide decomposition of drivers of debt dynamics and realism tools:
  - Drivers include: Primary deficit, Real interest rate, Real GDP growth, Real exchange rate depreciation, Other debt-creating flows, Residual (unexpected changes).
  - Realism tools compare projected public and private investment rates and the contribution to real GDP growth under fiscal adjustment scenarios.

### Notable methodological and definitional notes (as provided)
- 1/ Includes both public and private sector external debt.
- 2/ Derived as [r - g - ρ(1+g) + Ɛα (1+r)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, ρ = growth rate of GDP deflator in U.S. dollar terms, Ɛ=nominal appreciation of the local currency, and α= share of local currency-
- 3/ Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes.
- 4/ Current-year interest payments divided by previous period debt stock.
- 5/ Defined as grants, concessional loans, and debt relief.
- 6/ Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt).
- 7/ Assumes that PV of private sector debt is equivalent to its face value.
- Residency-based definition of external/domestic debt. There is a material difference between the two criteria: Yes.

*Sources: Country authorities; and staff estimates and projections.*

### 2.5 percentage  points of GDP in

### Statement by the Staff Representative on Chad

### Prior Actions and Technical Measures
- Prior action (No. 1): Establishment of export and import duties of 5 percent on certain products (excluding essential goods and nontaxed products) and up to 10 percent on antimony, unprocessed copper, and electric engines. Met via decrees: No. 128/MFBEPCI/SE/SG/DGDDI/DELDC/2025; No. 129/MFBEPCI/SE/SG/DGDDI/DELDC/2025; No. 130/MFBEPCI/SE/SG/DGDDI/DELDC/2025; No. 131/MFBEPCI/SE/SG/DGDDI/DELDC/DLRDCI/2025; No. 155/MFBEPCI/SE/SG/DGDDI/DELDC/2025.
- Prior action (No. 2): E-payment of taxes, fees and direct and indirect duties through banks and mobile telephone operators. Met via circular No. 004/PR/PM/MFBPEPCI/SG/2025 (July 3, 2025).
- Prior action (No. 3): Closure and suspension of opening customs offices/posts lacking an e-payment system and ASYCUDA. Met via note No. 019/DGDDI/DELDC/DLRDCI/2025 (June 25, 2025).
- Prior action (No. 4): Exchange of letters to suspend (i) new hires in the non-priority civil public sector beyond 2025 budget law commitments until end-2026; (ii) interministerial movements except for education, higher education, or health sector teaching and health staff; and (iii) numerical replacements conditional on deletion (radiation) acts, death and retirement certificates. Met via Letter No. 0401/MFBEPCI/SE/SG/DGBI/DS/2025 (June 25, 2025) and response No. 0110/PR/PM/MFPCS/SG/2025 (July 9, 2025).
- Prior action (No. 5): Sharing with staff a progress report on the audit of oil revenues since 2020 and establishment of a visualization system (Data Analytics) for oil revenue management. Met on July 10, 2025.
- Prior action (No. 6): Issuance of a new Presidential Decree revising Presidential Decree No. 3361/PT/PM/MFBCP/2023 governing emergency spending procedures. Met via revised Decree No. 1480/PR/MFBEPCI/2025 (published July 17, 2025).

### Recent Economic Developments and Outlook
- 2024 macro performance:
  - GDP growth declined to 3.5% from 5.0% in 2023.
  - Inflation increased from 4.1% in 2023 to 5.7% in 2024.
  - Fiscal deficit including grants deteriorated from -1.5% of GDP in 2023 to -2.5% of GDP in 2024.
  - Drivers: positive agriculture campaigns, resumption of infrastructure projects, addition of 70 megawatts to the national grid, buoyant telecommunications, higher fuel and food prices, underperformance of non-oil revenue.
- Outlook and projections:
  - GDP growth expected to pick up to 3.6% in 2026 and average 3.8% over the medium term against 3.3% this year.
  - Fiscal balance projected to improve in 2025 to -1.5 % of GDP.
  - Projections premised on agriculture and mining impacts, ongoing public investments, fiscal consolidation, improved public spending quality, and structural reforms (tax administration, PFM, digitalization, governance).
- Risks:
  - Downside: global uncertainty, delays in donor support, oil price and revenue volatility, climate-related events, regional security challenges, further humanitarian crises.
  - Upside: catalytic effects of the 2025-30 NDP and Fund-supported program, increase in oil prices, strengthened non-oil revenue mobilization, exploitation of untapped resources such as mining.

### Refugee and Humanitarian Financing Needs
- Refugee burden and financing:
  - Chad’s planned response to the refugees’ crisis requires estimated annual financing needs of more than $800 million.
  - Total number of refugees in 2025 estimated at 1,631,505 refugees (about 6% of the total population).
  - Response involves 35 partners, including 9 UN agencies; decline of official humanitarian assistance is putting serious pressure on public finances.

### The 2025-29 ECF-Supported Program (Proposed)
- Program design:
  - Proposed 48-month ECF arrangement to support economic policies, implement the 2025-30 NDP, complete key structural reforms, and address large balance of payments needs.
  - Three pillars:
    1. Fiscal sustainability through increased non-oil revenue mobilization and streamlined spending.
    2. Deepened social inclusion via improved social safety net and targeting.
    3. Strengthened business climate and governance reforms.
- Program conditionality objectives:
  - Increase non-oil revenues, control the wage bill, strengthen governance and transparency in the oil sector, enhance financial stability, and reinforce inclusion and access to public services.
  - Emphasis on social component and contingency measures to address shocks and decline in international aid.

### Medium-Term Policies — Fiscal Policy and PFM
- Fiscal targets and revenue mobilization:
  - Gradually reduce non-oil primary deficit below 5% of non-oil GDP over the medium term.
  - Implementation of the 2025 budget supported by the 2022-27 Public Finance Strategy (PFS) will prioritize strengthening non-oil revenue mobilization by about 2% of non-oil GDP.
  - Authorities expect to exceed their 2025 revenue targets.
- Revenue administration and digitalization measures:
  - Expand tax declaration from tax centers to declaration centers across the country; ensure reliable energy and internet supply to revenue offices.
  - Implement cross-checking module for the tax platform e-taxe to allow the tax directorate DGI to exploit taxpayers data more efficiently.
  - Deploy digital platforms: e-visa and e-notaire for land administration, ASYCUDA World for customs.
  - Modernization of directorate of estates DGD to integrate e-enregistrement to SIGFIP (IFMIS), operationalize e-conservation land registry module and online payment services, issue digital stamps, and upgrade archives to international standards.
  - Generalization of standardized electronic invoice (FEN) from January 2026.
  - Integration of DAO to SIGFIP to prevent manual procedures; completion of SIGFIP accounting module in 2026 and online access to key public finance institutions.
- Spending priorities and wage bill:
  - Increase social spending from 4.6% of non-oil GDP to 4.9% of non-oil GDP.
  - Contain the wage bill to 6% of non-oil GDP by 2030 from 6.8% in 2024; hiring freeze enforced in civil service with exception to integrate about 2,000 civil servants in priority sectors (health and education) and fiscal impact of national reconciliation process.
  - Create a database in SIGFIP for better monitoring and management of public investments; increase investment spending to 4.6% of non-oil GDP from the historic average of 2.0 %.
- PFM institutional measures:
  - Reactivate Expenditure Commitment Committee and Treasury Committee.
  - Establish Public Finance Monitoring Committee to validate and publish monthly, quarterly, and annual TOFE.
  - Submit draft budget review law to the Court of Auditors and reduce use of exceptional expenditure procedures (DAO) and extra-budgetary procedures in line with program parameters.
  - Progress on Treasury Single Account (TSA): implementation of legal and institutional framework, monitoring committee, and an escrow account completed; further steps contingent on CEMAC harmonization convention and AMS/X interface.

### Debt Management and Banking Sector Reform
- Debt management:
  - Total public debt declined from 49.8% of GDP in 2017 to 33% in 2025; projected to reach 31.3% of GDP in 2030, helped by debt restructuring.
  - Priorities: prioritize concessional loans and grants, avoid accumulation of arrears, strengthen debt management capacities, place monitoring and analysis under Directorate General of the Treasury.
  - Strengthen loan maturities and enforce an annual borrowing limit of CFA 15 billion.
- Banking sector:
  - BEAC assesses Chad’s financial system as stable; NPLs increased by 13.1% to CFA 386.5 billion (2.9% of GDP) in 2024; liquidity pressures noted.
  - Restructuring progress for two public banks CBT and BCC:
    - BCC: implemented a receivable convention with the government to reduce liabilities; will submit by end-year a second plan for a CFA 15 billion capital increase; initiated Islamic finance (legislative delays constrain progress).
    - CBT: COBAC validated CBT’s restructuring plan in July 2024; new management requested its revision to be submitted at end 2025.
  - Authorities seek IMF technical assistance for digitalization transformation and loan recovery for public banks.
  - Considering privatization of Housing Bank of Chad (BHT) and Agriculture and Commercial Bank (BAC).
  - COBAC on-site missions continue and a collection agency is being created.
  - Other banks (UBA, Coris Bank, Orabank, Ecobank, BSIC) show satisfactory performance with limited sovereign-bank nexus.

### Structural and Governance Reforms
- Social inclusion and identification:
  - 2025-30 NDP and ECF priorities: strengthen social safety net, increase national identification, improve access to public services.
  - Third Census launched; biometric national identification to improve targeting of vulnerable populations, efficiency of public interventions, and identification of taxpayers.
  - World Bank-supported initiatives: 2024-28 National Social Protection Strategy and Productive Social Safety Net Program (PSSNP) to expand biometric identification coverage and operationalize the Unified Social Registry (RSU).
  - Develop financial and microfinance institutions; enhance access to education via development of school canteens with significant budget allocation.
- Governance agenda:
  - High priority on transparency, public institution efficiency, business climate, and fight against corruption.
  - Request for an IMF governance diagnostic assessment.
  - Strengthen transparency in the oil sector and SOE reforms, including regular publication of SOEs’ financial statements.
  - AFRITAC technical assistance over three years to reform SOEs, public establishments, and administrative and independent entities.
  - Requests for technical assistance on wage bill, computerization of customs administration, and elaboration of green taxonomy to support climate agenda.

### Capacity Development and Technical Assistance
- Authorities note staff’s capacity building plan for Chad and welcome assistance to ensure timely and quality data.
- Country team (CD) strategy targets PFM, revenue administration, expenditure control, debt management and national accounts statistics.

### Conclusion and Authorities’ Request
- Authorities are requesting a 48-month ECF arrangement to strengthen macroeconomic stability, address balance of payments needs, and create a conducive environment for growth and development.
- They express strong ownership of, and commitment to, the new program and have met the prior actions for the ECF arrangement. They request Executive Directors’ approval of their request.

*Statement by the Staff Representative on Chad — July 25, 2025*

---


_Source: https://www.imf.org/-/media/files/publications/cr/2025/english/1tcdea2025001-source-pdf.pdf_