Balance of Payments

With the exception of the 1979-81 period, which were years of heavy conflict when collapsed imports were offset by some continued cotton exports, Chad has run deficits in its trade balance since the 1960s (see table 6, 1978-84, Appendix A). The size of these deficits depended on the world cotton market. In 1984, when Chad had high export earnings as a result of record cotton production and high world cotton prices, the trade deficit was modest. The following year, when world cotton prices fell, production declined. Export earnings from cotton were half those of 1984, and total export earnings on all goods dropped by one-third. Problems with the cotton sector continued in 1986 and 1987. World cotton prices remained low, and the fall in the value of the United States dollar aggravated the situation because world cotton prices were quoted in dollars. At the same time that export earnings dropped, Chad's imports rose. The value of imports increased by almost 40 percent in 1985. A large part of this rise resulted from oil exploration, which was only partially offset by direct investments in Chad by the oil drilling companies. Increased imports of fertilizers and insecticides for Cotontchad's expanded program to improve production in those years also contributed to the trade deficit. The net result of these events was that the modest trade deficits of 1983 and 1984 grew into large deficits in 1985 and 1986.

Data as of December 1988