Published on Africa Can End Poverty

Chad: Hosting Refugees in an Inclusive Manner

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Chad: Hosting Refugees in an Inclusive Manner Photo credit: Nako Madjiasra, World Bank.

Chad’s economy has proven resilient despite the war in neighboring Sudan, and spillover effects on trade, public expenditure, and inflation. 

Figure 1: GDP growth in 2023 was supported by both the oil and non-oil sectors

Chad: Hosting Refugees in an Inclusive Manner Source: Chadian authorities and World Bank staff estimates.

 

GDP growth in 2023 is estimated at 4.1% (1% per capita) (Figure 1). This growth is underpinned by oil production (an increase by 4.4%). Non-oil GDP is estimated to have grown by 4.1% (from 2 % in 2022), driven by public investment. After recovering from the 2022 floods, the agricultural sector is estimated to have contributed 1.6 percentage points (ppts) to growth. Investment, primarily government-driven, is the main growth driver on the demand side, contributing 7 ppts to growth. In contrast, private investment is estimated to have fallen due to increased interest rates and crowding out effects. The boom in public investment has led to an increase in imports, resulting in a 2.4% of GDP current account deficit in 2023. Inflation eased to 4.1% in 2023, owing to the base effect of high inflation in 2022 (5.8%) and the deceleration in food inflation resulting from improved agricultural production.  

Chad maintained a fiscal surplus of 1.3% of GDP (non-oil fiscal deficit of 15.8%) in 2023 from a 5% of GDP surplus in 2022 driven down by public investment. Despite high tax revenues growth of 14.4% supported by tax administration digitalization measures, the fiscal surplus declined. Total public debt is estimated to decline to 44.8% of GDP in 2023 from 47.4% in 2022. 

The extreme poverty rate measured at the international line ($2.15 per person per day, 2017 PPP) in Chad is estimated to have decreased by 1.1 ppts to 29.7% in 2023; however, 5.4 million people continue living in extreme poverty. Moreover, food insecurity remains a significant issue despite lower food inflation, with around 2.1 million people, or 11.5 % of the population, facing severe food insecurity as of December 2023 (40% of them in the eastern and southern provinces affected by the crisis in Sudan). Rising fuel prices, climate shocks and forced displacement resulting from the war in Sudan are expected to heighten food insecurity and increase poverty.

The inflow of refugees into Chad has significantly deepened existing vulnerabilities. Over the past 20 years, Chad has seen a continuous inflow of refugees due to ongoing conflicts, with recent escalations in 2023 following the Sudan crisis. Currently, Chad hosts 1.1 million refugees, mostly Sudanese. This situation strains the country's limited resources, particularly in the eastern and southern provinces, leading to increased poverty, food insecurity, and pressure on basic services. Both refugees and host communities are impacted, with approximately 80 % unable to meet basic needs (Figure 2).

Figure 2: Refugees population, poverty in Chad

Chad: Hosting Refugees in an Inclusive Manner

 

The economic inclusion of refugees in Chad depends on recognizing them as economic actors, restoring their productive capacities, and enabling them to contribute to the local economy. The recent Asylum Law supports refugee integration by granting them rights to land ownership, formal employment, and free movement. However, economic integration is challenged by the remote locations of large camps and the inherent limitations of these areas. Investing in human capital, infrastructure, and primary sector development can improve integration, but assistance must be portable to encourage mobility and effective matching of refugees' skills with local needs.

Understanding the dynamics between refugees and host communities is key to foster socio-economic inclusion by leveraging common cultural identities and mutual benefits. Refugees and host communities share languages and traditions, facilitating social integration. However, both groups face challenges, including land scarcity and limited productive resources. Women, who head a significant portion of households in both refugee and host communities, face restrictive gender norms that limit their control over productive resources, decision-making power, and inheritance rights, perpetuating economic and social inequalities.

Donor funds for refugee support remain insufficient and focus on immediate humanitarian needs rather than integrated livelihood development. Out of the $455 million required for refugee response in 2023, only $151 million were secured. Most support initiatives are directed either to refugees or host communities. Only a few programs target both groups, promoting joint activities and economic opportunities. These programs are still insufficient to address the comprehensive needs and promote sustainable livelihoods.

To enhance economic inclusion and social cohesion, policies must integrate refugees and host communities, facilitating mobility and access to quality services. In the short-term, policy should focus on increasing economic opportunities, issuing official ID cards for refugees, and strengthening the social registry for coordinated assistance. Sustained donor funding is essential to support refugee inclusion in national systems. In the medium-term, national safety nets should be expanded to include both groups, with an emphasis on women's needs. These measures are expected to reduce poverty and enhance self-reliance among refugees and host communities, while easing the financial pressure on the government and donors.

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