I.                   OVERVIEW

1.                   Located in the centre of Africa, Chad is a large Sahelian country covering an area of 1,284,000 km².  It is entirely landlocked, and shares its borders with six countries:  Libya to the north, the Central African Republic to the south, Sudan to the east, and Cameroon, Nigeria and Niger to the west.  The closest sea port is the port of Douala, Cameroon, 1,700 km from N'Djamena.

2.                   Chad achieved independence on 11 August 1960.  Its political system is governed by the Constitution of 1996, which was amended in 2005 to enable the President of the Republic to be elected several times.  Under the new administrative structure, the country is divided into 18 regions including N'Djamena, the capital;  55 departments;  and 254 sub-prefectures.  The decentralization characteristic of the Chadian State is in progress.

3.                   The Republic of Chad comprises several sedimentary basins and sub-basins of which most have yet to be explored.  Its population was estimated at 8.3 million in 2004, with an average density of seven inhabitants per square kilometre – very low in comparison to the average for sub-Saharan Africa.  The country is divided into three climatic zones - the Sudanian zone, the Sahelian zone, and the Saharan zone - and has two seasons:  a rainy season and a dry season.  Average annual rainfall varies from one zone to the other, with 800 to 1,200 mm for the Sudian zone, 400 to 800 mm for the Sahelian zone, and less than 300 mm for the Saharan zone.

4.                   Chad is a member of several international, regional and subregional organizations, including the United Nations (UN), the African Union (AU), the World Trade Organization (WTO), the Organization for the Harmonization of Business Law in Africa (OHADA), the African Intellectual Property Organization (AIPO), the Central African Economic and Monetary Community (CAEMC), the Economic Community of Central African States (ECCAS), the Permanent Inter-State Committee for Drought Control in the Sahel (CILSS), and the Community of Sahelan-Saharan States
(CEN-SAD).

II.                economic environment

5.                   Since the 1990s, the Chadian Government has been pursuing an adjustment process with the chief objective of restoring the country's economic viability through structural reforms in order to prepare the ground for renewed growth.  During the pre-oil era, the Chadian economy was dependent on a number of factors that influenced the country's development policy, including:

            - The climate, with irregular rainfall influencing agricultural production;

            -           the international economic environment, with the deterioration in the terms of trade for basic commodities, such as cotton, of which Chad is an exporter.

(1)               Macroeconomic Policy

(i)                 Economic situation

6.                   Over the past five years (2000-2005), Chad's economic growth rate has been high, averaging 11.3 per cent.  This result is due chiefly to the development of the Doba oilfields and the production of crude oil, as well as to the good performance of the agricultural sector.

7.                   Chad's population has grown at an average of 2.5 per cent.  Per capita gross domestic product (GDP) remains low in comparison to the other countries of the subregion.  Meanwhile, the average inflation rate for the period is 3.6 per cent.  In spite of the remarkable breakthrough of the petroleum subsector, the Chadian economy remains dependent on the primary sector, which has accounted, on average, for approximately 69.5 per cent of GDP over the past few years.  The primary sector is also a major provider of jobs, employing 70 to 80 per cent of Chad's active population.  Food crops (millet, sorghum, maize, rice, ground nuts, beans, etc.) represent 5.1 per cent of GDP.

8.                   Chad's industrial and cash crops are cotton, sugar, and tobacco, together with a product gathered in the wild, gum arabic, which also contributes significantly to GDP.  The country's main export, cotton, is of particular social and economic importance, representing 40 per cent of total agricultural export revenue in 2004.  Livestock breeding is the other mainstay of Chad's economy, accounting for 27 per cent of revenue, with a large national herd made up of bovine animals, sheep, goats, and camels, a census of which is currently being conducted.  Forestry, fisheries and mining represent approximately 10 per cent of GDP.  The secondary sector accounts for 53 per cent of non-oil GDP, with an average annual growth rate of 5.8 per cent of GDP between 2000 and 2005 distributed among the manufacturing industries, which include cotton lint, crafts, water and electricity, construction and public works.  The tertiary sector, comprising trade, transport, administration, etc., accounts for a total of 22.2 per cent of GDP, with trade making up the largest share.

9.                   As regards public finances, budgetary revenue has increased by CFAF 282,384 billion, thanks to the exceptional income from the Heavily Indebted Poor Countries (HIPC) Initiative and to oil revenue.  Expenditures increased as well between 2000 and 2005, reaching CFAF 281,207.238 billion.  An audit of the public internal debt, financed by the European Union (EU), is currently under way, the idea being to analyse the situation up to 2006 in order to determine the true amount involved.  Meanwhile, Chad's outstanding external debt increased slightly, with an accumulation of arrears and an increase in the amounts drawn.  As of 30 September 2006, the outstanding external debt totalled CFAF 848,545 billion, with the multilateral debt representing CFAF 769,035 billion and the bilateral debt, CFAF 79,510 billion.  Payments totalled CFAF 28,142 billion as of that date.  At the end of September 2006, the total amount drawn was CFAF 16,260 billion.

10.               Chad's monetary unit is the CFA franc (franc of Financial Cooperation in Central Africa) adopted by the CAEMC.  The issuing bank is the Bank of Central African States (BEAC), which manages the common monetary and exchange policies of the Central African Monetary Union (CAMU).  The CFA franc is pegged to the Euro at a fixed parity:  1 Euro = 655,957 CFA francs or 1 CFA franc =  0.001524 Euros.  In addition to the BEAC, there are seven credit institutions (primary banks):  the BAC (formerly the BAST), ECC, ECO Bank (formerly the BIAT), BSIC, CBT, FBT, and the SGTB.

(ii)               Economic outlook

11.               In June 2003, the Chadian Government adopted the National Poverty Reduction Strategy (NPRS) which was approved by the donors, including the IMF and the World Bank, in November 2003.  The NPRS, which sets out to reduce poverty by half (50 per cent) by 2015, aims to achieve five priority objectives:  good governance, strong and sustained growth, human capital development, better living standards for the most vulnerable population groups, and protection of the environment.  In 2005, the legislative texts creating the institutional follow-up mechanisms were adopted.  The NPRS is currently being revised.

12.               In the area of good governance, the Government took a number of institutional and regulatory measures, including:

            -           In 2004, the creation of a Ministry of State Control and Ethics, exclusively responsible for the general control, inspection, and monitoring of activities in government services and private associations or institutions benefiting from State support or subsidies, and for safeguarding ethical standards in public life.  It reports to the Government;

            -           the adoption of an anti-corruption law in 2000 (Law No. 004/ER/2000 on the misuse of public property, corruption, peddling of influence and similar offences);

            -           the creation of an audits section as one of three sections of the Supreme Court;

            -           the creation of the Collège de contrôle et de surveillance des revenus pétroliers (Oil Revenue Control and Supervision Board – CCSRP), an independent body which reports to the Government;

            -           the opening, in the cities, of commercial courts, under the responsibility of the Ministry of Justice;

            -           the creation, in 2005, of a ministry responsible for human rights and relations with the National Assembly, responsible to the Prime Minister;  and

            -           creation in 2006 of a Ministry of Solidarity and Microcredit.

13.               In the socio-political area, the focus is on strengthening the basic conditions for attaining economic and trade policy objectives identified by the Government which include consolidating democracy, security and peace;  strengthening national solidarity;  and tackling education and culture.

(2)               Foreign Investment Regime

14.               In Chad, investment is regulated by an Investment Code which dates back to 1987, certain provisions of which lapsed with the tax and customs reform introduced in 1994.  An Investment Charter is in the process of being adopted in an effort to adapt to the realities of the subregional environment, in conformity with the Community Investment Charter for the harmonization of strategies within the CAEMC, in force since 1999.

III.             ANALYSIS OF THE TRADE POLICY FORMULATION AND IMPLEMENTATION FRAMEWORK

(1)               Trade Policy Instruments

15.               Since the 1990s, Chad has been firmly committed to liberalizing trade with a view to achieving steady and sustainable growth.  Trade is an integral part of poverty reduction, which is the main objective of Chad's socio-economic development policy.  The Government's main trade policy objective is to build up a dynamic economy open to the outside world.  To that end, it has adopted an export-oriented strategy, favouring increased supply in order to be able to participate effectively in world trade.  Measures have been taken to improve and promote the expansion of production.

(i)            Domestic trade

16.               Domestic trade is chiefly regulated by the following instruments:  Law No. 30 of 28 December 1968 on prices, economic intervention and the repression of economic offences;  Law No. 20/PR/1967 of 9 July 1967 introducing a card for aliens engaged in trade, supplemented by Ordinance No. 31/PR/ET of 4 October 1967;  Ordinance No. 006/PR/84 of April 1984 on the status of traders;  the uniform acts of OHADA;  the Investment Code of 1987;  the Community Investment Charter;  and the different CAEMC regulations, in particular the regulations on anti-competitive practices and those on State practices affecting trade between Member States.

17.               A draft law on competition is in the process of being amended.  In March 2004, a joint economic enforcement group was set up to combat unfair trade practices.  Prices have generally been liberalized since the 1990s, with the exception of tariffs for water and electricity distributed by the Chad Water and Electricity Company (STEE), which are fixed by the State;  the price of generic medicines, which are fixed in accordance with agreed profit margins of 20 per cent for wholesalers and 30 per cent for the private pharmacies and stores;  and the price of butane gas.  Privatization reforms are under way.

18.               Any economic operator wishing to engage in commercial, industrial or crafts activities must obtain prior administrative authorization renewable every five years.  Introduced by Ordinance No. 006/PR/84 of 12 April 1984, this authorization is issued by the Ministry of Commerce.  In addition to this administrative authorization to engage in commercial and/or industrial and crafts activities, foreign economic operators must obtain a special card for foreign traders, industrialists and craftsmen introduced by Law No. 20/PR/67 of 19 July 1967, also issued by the Ministry of Commerce subject to a favourable opinion of the ad hoc commission responsible for delivering the card, which is renewable annually.

(ii)            Foreign trade

19.               The chief laws and regulations governing foreign trade are:

            -           Decree No. 452/PR/85 abrogating Decree No. 282/PR/85 on import procedures.  Under this Decree, imports from any country may enter freely.  However, the Ministry of Commerce may, for health, security or other reasons, prohibit the importation of one or several products;

            -           Order No. 054/MCPI/DG/DC/95 abolishing import licences and establishing the negative list of products subject to special import authorization.  The first article of this order states that import and export licences are abolished, and further stipulates that the products or product group "sulphur and other explosives" shall be subject to prior authorization delivered by the Ministry of Commerce;

            -           Decree No. 451/PR/95 of 29 July 1995 abrogating Decree No. 113/ET/65 of 11 July 1965 regulating the exportation and re-exportation of products, merchandise, foodstuffs and items of all kinds from Chad.  Under this Decree, all merchandise, products, foodstuffs and items may be freely exported.  However, the Ministry of Commerce and Handicrafts may, if necessary, prohibit or restrict the exportation of a product;

            -           Decree No. 138 bis/PR/MEPHP/88 regulating exports of livestock and livestock products.  This Decree authorizes the exportation of live cattle and livestock products, with the exception of breeding females and calves.

20.               Chad's exports focus on oil, cotton, live cattle and gum arabic.

21.               The customs regime applied by Chad is that of the CAEMC, which provides for the free movement of persons and goods from member countries and a common external tariff (CET).  This external tariff, which is a product of the tax and customs reform, seeks to ensure that the same conditions are applied to all enterprises in the subregion by rationalizing the classification of imports into four tariff categories, each with a single customs duty:

            - 5 per cent for essential goods;

            - 10 per cent for raw materials and capital goods;

            - 20 per cent for different intermediate goods;

            - 30 per cent for wage goods;

            -            generalized preferential tariff (TPG) at a rate of zero per cent.

22.               Other taxes are collected at the customs cordon, namely:

            - Excise duty for a category of products;

            -            community integration tax (TCI).

23.               Trade support structures include:

            -           The Chamber of Commerce, Industry, Agriculture, Mining and Crafts (CCIAMA), which is a consular chamber.  Under the supervision of the Ministry of Commerce and Handicrafts, it is responsible for representing, protecting and promoting the common interests of economic operators in the area of trade, industry, agriculture, mining and crafts.  Among the CCIAMA's objectives is the promotion of the private sector and the assistance of private enterprises in their relationships with foreign countries;

            -           the Chadian National Employers' Council, an employers' organization whose objectives include the representation and defence of the economic interests of members;

            -           the commercial courts, which are already operational in the cities;

            -           the National Investment and Export Promotion Agency (ANAPIE), which is in the process of being set up;

            -           forwarding companies and establishments;  and

            -           insurance and reinsurance companies.

24.               Chad is a founding member of the leading multilateral institutions, and participates actively in their work.  It places great emphasis on regional and bilateral cooperation, in particular with the neighbouring countries.  It has signed trade agreements with several African and European countries.  Chad is an active member of the CAEMC and ECCAS – both of them subregional economic groupings – and it belongs to the CEN-SAD, a grouping of Sahelo-Saharan States.  It is a member of the Cotonou Agreement – a partnership agreement with the European Union.  Being an ACP country and an LDC, Chad is a beneficiary of the non-reciprocal preferential agreements which provide access to the EU markets for its products.  Under the Cotonou Agreement, of which Chad is a signatory, the CAEMC is mandated to negotiate economic partnership agreements (EPAs) on its behalf.

25.               As regards the Uruguay Round, Chad signed, inter alia, the Final Act in Geneva, and ratified the Marrakesh Agreement establishing the WTO, after which it became an original WTO Member on 19 October 1996.  In that connection, it made commitments under all of the WTO agreements.  As a full Member, Chad provides national treatment to foreign products and grants most-favoured-nation (MFN) status to other WTO Members.  Of all of the Uruguay Round trade agreements that Chad signed, only six are effectively implemented, because they relate directly to the country's current economic structure, which is essentially based on agriculture and livestock:  the Agreement on Agriculture with its domestic support, market access and export competition pillars;  the Agreement on Sanitary and Phytosanitary Measures;  and the Agreement on Technical Barriers to Trade.

26.               During the Uruguay Round, Chad bound all of its tariff lines relating to agricultural products at a ceiling rate of 80 per cent, and 75 per cent for passenger transport vehicles.  In the area of trade in services, Chad has made commitments in tourism and travel agency related services.  In conformity with WTO rules, it has submitted a number of notifications.  Chad is a member of the World Intellectual Property Organization (WIPO), and is a signatory member of the revised Bangui Agreement creating the AIPO.  A national structure for liaison with the OAPI, under the Ministry of Commerce and Handicrafts, is responsible for the management of intellectual property titles.

27.               Under the WTO Agreement on Customs Valuation, it is the transaction value that should be taken into account by the customs authorities of Member countries.  Unfortunately, this requires considerable technical and human resources that Chad does not have.

28.               Chad is one of the leading African cotton producing countries.  Indeed, cotton plays an important economic and social role in Chad, alone accounting for more than 5 per cent of GDP, 70 per cent of agricultural export revenue and approximately 60 per cent of total export revenue — at least before the development of oil — and providing subsistence for approximately 3 million people.  Accounting for 2,500 jobs or 10 per cent of all State employees, the Chadian cotton company, Cotontchad, acting as the sole operator in the sector, is the country's second largest employer after the State itself.  As the main export crop, it provides a source of regular income for the rural population.  In Chad, cotton is a strategic product which contributes to the economy, to trade and to employment, and hence to the country's economic and social development.  Moreover, since cotton is produced above all by small producers, it has a positive impact on poverty reduction in the producing areas.  Cotton is considered by many Sahelian countries, including Chad, to be an example of economic success.  The labour force, chiefly domestic, is paid low wages, and the crop is harvested manually.  Thanks to its quality/price ratio, Chadian cotton has a natural comparative advantage.  Not only is cotton the main source of income in rural areas, it is also a tool for modernization and diversification, and a source of financing for social activities and for structuring the rural community.

29.               At the macroeconomic level, cotton provides the State with an export revenue that is far from negligible.  It contributes to improving the agricultural sector as a whole through agricultural innovation, and has a direct positive impact on cereal, livestock and dairy production through the use of cotton by-products in cattle feed (seed cotton and cottonseed cakes).  Packaging, transport and shipping have generated considerable employment in the cotton sector, since up to 95 per cent of the cotton is exported.  Many more jobs could be created if some of the cotton were processed locally.

30.               However, Chadian cotton production and export activities have come under serious threat over the past few years owing to the massive subsidies granted by developed countries such as the United States and certain EU countries to their cotton producers.  These subsidies have indirectly resulted in a drastic fall in cotton prices, causing enormous problems for Chadian cotton producers, not to mention the considerable losses in revenue suffered by the country over the past few years.  They undermine the competitiveness of Chadian cotton, with serious social consequences for the farming communities in the cotton producing areas:  persistent problems in providing health care and schooling for the children, dilapidation of existing infrastructure and equipment, and a lack of food for families and sustainable housing.  In short, the impoverishment of rural areas is growing more and more visible with the decrease in income of the cotton growers.

31.               With their income being eroded year after year by this unfair competition resulting from the subsidies granted by the wealthier countries to their producers, cotton growers could very well end up abandoning their activity.  The lack of competitiveness of cotton (due to the subsidies and to the problems faced by the sector) is contributing to the increase in poverty among cotton growers.  In order to reform the cotton sector and to boost the competitiveness of cotton, Chad has launched a number of initiatives in the following areas:

            -            Productivity improvement;

            -            agricultural research;

            -            improved ginning techniques;

            -            training of professionals in classing with electronic cotton classing equipment;

            - local processing of cotton.

32.               This trade policy is conducted in conformity with the WTO rules.  Chad hopes that its partners will support its reform efforts, and is stressing the importance of ensuring coherence between trade policy and development programmes.

33.               At the international level, Chad has been very active in developing a coherent foreign trade policy with respect to cotton.  Since 2003 it has been participating in the Sectoral Initiative in Favour of Cotton – which calls for the elimination of trade-distorting cotton subsidies – and has defended, with its partners (Benin, Burkina Faso and Mali) the cotton cause at the WTO.  Negotiations were given priority and cotton is now identified as a product (in fact the only product) that should be addressed "ambitiously, specifically and expeditiously".

34.               In addition to negotiations, Chad has used the tools made available by the WTO to defend its trade interests.  In October 2006, it participated (for the second time) as a third party in the dispute between Brazil and the United States on the elimination of subsidies on upland cotton.  The Dispute Settlement Body is tasked with verifying compliance by the United States with the decisions taken during the preceding dispute.

(2)               Trade-Related Technical Assistance

35.               Since 2004, Chad has had a Permanent Mission to the United Nations Office and Other International Organizations in Geneva.  In the capacity building area, Chad has benefited from several workshops, seminars, and training courses at the WTO in Geneva, and elsewhere.  Regarding the Integrated Framework, the Government has just adopted the Diagnostic Trade Integration Study (DTIS) and Chad will soon benefit from Window II financing.

36.               Chad's efforts to ensure the effective implementation of the WTO agreements and rules and greater awareness thereof within the country could be helped by increased technical assistance in the following areas:  capacity building of customs staff;  specific capacity building of the ten officials, five from the Ministry of Commerce and Handicrafts and five from the Ministry of Higher Education that were briefly trained as trainers in the framework of the WTO multilateral trade negotiations (from 6 to 13 May 2006 in N'Djamena);  expansion and improvement of human resources, as well as mechanisms for gathering, managing and disseminating import- and export-related trade information;  information and training in the form of courses, workshops and seminars covering negotiations, notification, customs valuation, non-tariff barriers, sanitary and phytosanitary measures, standardization, services, and in particular, the WTO and its agreements in favour of parliamentarians and civil society;  setting up of a national standardization body;  etc.

IV.              trade policy formulation by sector and sectoral policies

37.               Generally speaking, the Government determines and implements national policy, and the National Assembly promulgates the corresponding legislation.  The promulgated laws are published in the Official Journal.  Each ministry formulates policies relating to its field of activity.  The Ministry of Commerce and Handicrafts is responsible for formulating trade policy, monitoring its implementation, and ensuring compliance.  It does this in coordination with the ministries as a whole, the other institutions concerned, and the private sector, depending on the nature of the matter at issue.

38.               Chad's industrial development is very limited.  Ten enterprises alone account for most of the country's industrial fabric.  These include a seed cotton processing and ginning factory (Société cotonnière du Tchad);  a sugar and sugar by-product manufacturing facility (Compagnie sucrière du Tchad);  a cigarette manufacturing plant (Manufacture de cigarette du Tchad);  a plant manufacturing cooking oil, household soap, and seedcakes using cotton by-products (oil and soap factory forming part of Cotontchad);  a brewery for local consumption (beer, sweetened and unsweetened carbonated beverages);  a corrugated iron sheet manufacturing plant;  a mineral water factory;  a refrigerated slaughterhouse in N'Djamena;  a modern brick factory;  and a gold production facility.

39.               The Ministry of Commerce is the WTO focal point, and as such, it is the leading entity for WTO matters.  Generally speaking, the Ministry intends to give priority to a number of actions aimed at boosting industrial development:  introduction of a regulatory framework conducive to investment by reforming the Investment Code (a national investment charter is shortly to be adopted);  introduction of a system of accreditation, certification, standardization and quality assurance;  creation of a national investment and export promotion agency (ANAPIE) providing for a single window;  strengthening of the Chamber of Commerce, Industry, Agriculture, Mining and Crafts;  and development and fitting out of infrastructure so as to provide facilities for investors.

40.               Chad's specific policy objective in the crafts area is to introduce a national policy for the promotion of the crafts sector.  This will involve, inter alia, setting up a programme for the training of craftsmen;  developing regulations for the crafts sector;  developing promotion strategies for the crafts sector by branch and by subsector;  organizing and assisting craftsmen in their relations with the ministry in charge of employment;  introducing a financial and tax system adapted to the needs of the crafts sector;  promoting associative and cooperative movements in the crafts sector;  obtaining easier access for craftsmen to funds under economic development and poverty reduction programmes and to bank loans at a reasonable interest rate;  and creating a crafts village.

41.               Among the ministries and institutions involved in the trade policy review process, some have a particular role to play.  For example, the Ministry of the Economy, Finance and Planning is responsible for the formulation, coordination, follow-up and implementation of the Government's economic and financial development policy and for mobilizing the necessary resources.  Its mission is to organize and monitor government and treasury accounts, customs taxes and duties and property taxes;  approve public contracts and leases to be concluded by the Government in keeping with the threshold established in the Government Procurement Code and subsequent texts;  to prepare and develop the general State budget;  to monitor the implementation of the general State budget;  to manage the domestic and foreign debt;  etc.

42.               The Ministry of Foreign Affairs, African Integration and International Cooperation is responsible for the formulation, coordination, implementation and follow-up of the Government's foreign policy, and for international cooperation.  The Ministry of Agriculture is in charge of formulating, coordinating, monitoring and implementing the Government's agricultural policy.  Its trade policy related activities include developing and monitoring the implementation of agricultural legislation and phytosanitary, quality and conformity control of products.  It is also involved in orienting and coordinating the marketing strategy for agricultural products through studies on promising subsectors, training of the persons involved, and efforts to improve the competitiveness of agricultural products in order to develop the country's considerable potential in that area;  and finally, its activities extend to food security policy, with the creation of the National Food Security Office (ONASA).

43.               Before 2003, the rural sector as a whole was the motor of the Chadian economy, accounting on average for 40 per cent GDP and employing 80 per cent of the country's active population.  Indeed, agriculture – in the form of cereal crops, cash crops, root crops and tubers – plays a major role in the economy and is estimated alone to account for more than 24 per cent of GDP.  In order to transform agriculture into a genuine driving force for development, the Chadian Government developed a master plan for agriculture which seeks to boost the sector's performance by acting decisively in the water management area as a safeguard against the cyclical impact of climatic variations.  Thus, the Government has been pursuing the objectives set forth in the master plan for water of developing 100,000 hectares by 2020;  combating crop pests, in particular bird and locust infestations;  agricultural research;  extension;  and the transfer of responsibility to producers.  The reorganization of the National Office for Rural Development (ONDR) to ensure greater proximity of extension services for producers fits in with this objective.

44.               Chad has successfully incorporated the CAEMC Common Agricultural Strategy in its agricultural policy and strategy.  The Ministry of Livestock is responsible for formulating, coordinating and implementing national policy with respect to the production and exploitation of animal resources, the development of pasture land, the management of pasture resources and the organization of professional livestock breeders with respect to the parties concerned.  It is also responsible for developing, applying and monitoring the laws and regulations pertaining specifically to livestock breeding, in particular phytosanitary measures.

45.               Livestock farming is Chad's leading source of revenue.  In spite of its importance to the country's economy, it remains traditional, and based on transhumance.  A number of general and specific objectives have been set with a view to boosting the competitiveness of this sector, including a sustainable increase in animal production, an increase in the income of breeders and other actors of the subsector, and improvement of pastoral water resources.  The authorities also want to develop the marketing and exportation of livestock products and by-products, to build up a proper institutional framework that reflects the policy of State withdrawal and helps to ensure the efficient management of livestock development, to transfer responsibility for restructuring the production chains and providing support for the grassroots associations to the professionals, to build up the quantitative and qualitative capacity of human resources, to strengthen the role of research in the development of livestock breeding, and to develop a modern and efficient animal health system.

46.               The Ministry of Petroleum plays a leading role in the area of hydrocarbons in general and the exploitation of the country's petroleum resources in particular.  It is responsible for the formulation, coordination, implementation and follow-up of government policy in the hydrocarbons area, more specifically, for organization, research, and the technical and administrative control of all oil-related activities;  the supervision, guidance, coordination, and control of oil research and of activities relating to its sphere of competence, in particular the production, transport, storage, refining and distribution of liquid and gaseous hydrocarbons;  the building of a hydrocarbons database;  and the preparation and dissemination of texts relating to the legislation, regulation and taxation of hydrocarbons and their enforcement in cooperation with the ministerial departments concerned.

47.               The Ministry of Mining and Energy is responsible for the formulation, coordination, implementation and follow up of the Government's mining and energy development policy.  Under its supervision, the Chad Water and Electricity Company (STEE) holds a monopoly on the distribution of water and electricity, whose prices are fixed by ministerial order according to a price structure.  Electricity is thermally generated using diesel fuel.  Its cost is the highest in the world, and the country's development and economic activity is seriously hampered by the poor territorial coverage.  Chad has abundant and varied mineral resources, but little has been done to exploit them.  The extraction of sodium carbonate and gold has only just begun.

48.               In the electricity sector, the Government is conducting a social policy aimed at reducing the cost per KW for the most disadvantaged population groups through the construction of a topping plant to refine part of the DOB's crude oil and supply the STEE in diesel fuel.  The Ministry of the Environment and Fisheries is responsible for formulating, coordinating, implementing and following-up the Government's environmental and fisheries policies.  Chad is rich in forest species, which include the Senegal gum acacia (Acacia Senegal) in the central areas, and shea nuts in the south.  Gum acacia is currently the most important species, with an estimated production of 20,000 tonnes for a 50,000 tonne market.  Chad ranks second among world producers.  Gum arabic is one of the forestry products that is exported to certain African countries, including Nigeria, and western countries, above all the United States.

49.               Fishing is an important activity in Chad.  It is practised on Lake Chad and on the two permanent waterways, the Logone and the Chari, as well as the semi-permanent waterways of Batha, Barh Azoum, Barh Kôh, Barh Salamat, and the Mayo-Kebbi, Lake Iro, Lake Léré and Lake Tikem.  In order to improve its environmental and fisheries policies, Chad has adopted a number of measures, which include combating deforestation and the encroachment of the desert, strengthening the capacity of central and regional services, organizing fishermen and providing them with training, developing and modernizing aquaculture and fish farming and developing other fisheries-related activities, promoting and developing forestry, processing and converting fishery products, promoting new subsectors (gum arabic, shea nuts, soapberry, tamarind, and date palm), promoting alternative energy sources, and properly completing the project to transfer the waters of the Oubangui to Lake Chad.

50.               The cultivation of spirulina around Lake Chad is currently a small-scale operation that could be modernized in order to market the product on a large scale with a label.  The Ministry of Tourism Development is responsible for exploiting the country's enormous potential for tourism.  In 1998, it had a general policy statement issued on the development of tourism, highlighting its importance for the country's socio-economic development.  It also relies on Law No. 19/PR/2002 regulating tourism establishments.  This law lays down the conditions for the construction, conversion and operation of tourism establishments (accommodation, restaurant services, and travel agencies).

51.               Tourism is the only services sector in which Chad has made commitments under the General Agreement on Trade in Services (GATS).  These commitments concern hotel and restaurant services and travel agencies, and guarantee free access to the Chadian market.  The hotel sector is made up of private operators, and was opened up to foreign operators when Chad signed the GATS.

52.               The Ministry of Postal Services and New Communication Technologies is responsible for the formulation, coordination, implementation and follow-up of the Government's policies in the relevant areas.  It launched the reform of the telecommunications sector by liberalizing the market.  The Société Tchadienne des Postes et de l'Épargne (Post and Savings Company - STPE) operates postal and financial services.  It is present on the express delivery market through the Express Mailing Service (EMS) together with declared private operators (DHL, SDV, SAGA Express, UPS, Universal Express and TNT).  In the telecommunications area, the Chad Telecommunications Company (SOTEL TCHAD) is responsible for operating the basic network, with approximately 13,000 fixed telephony subscribers of which 80 per cent are concentrated in Djamena.  Two private operators share the mobile telephony market:  Celtel and Millicom, with 400,000 subscribers distributed across several zones.  There is an increasing demand for mobile telephones and Internet in the large urban centres.  Rural telephony remains a major challenge for the future.

53.               Ordinary money transfers are carried out by the banks and postal services, while electronic transfers are carried out by private companies – Western Union Money Transfer and MoneyGram – in association with the STPE.

54.               The Ministry of Infrastructure is responsible for the formulation, implementation and follow-up of the Government's infrastructure and transport policies.  The Government developed a national transport strategy (SNT) for the period from 2000 to 2009, updated to 2015, chiefly to open up the country both internally and externally and to ensure access to the entire national territory throughout the year.  For the moment, Chad has approximately 1,021 kilometres of asphalted roads and 4,288 kilometres of graded dirt roads.  Efforts will be made between now and 2015 to increase the figure for asphalted roads to 1,800 kilometres, and for graded dirt roads to 4,900 kilometres.  Chad does not have a railway.  It has an international airport with a 2,800 metre runway.  The liberalization of the transport sector, both air and land transport, has been completed.

55.               It should be noted that all of the ministerial departments directly or indirectly involved in the trade policy review process are faced with enormous material, technical and human problems, and solving those problems will be a major challenge.

V.                 conclusion and recommendations

56.               This trade policy report by Chad is consistent with the Government's socio-economic development policy.  The aim of that policy is to contribute significantly to growth in order to achieve the global objectives of good governance, poverty reduction, and integration into the newly emerging and constantly changing world economic context, these being indispensable to the country's sustainable economic and social advancement.

57.               However, these objectives cannot be attained without the support of the international community, which is why Chad is awaiting, from the WTO:

            -           A successful outcome to the Sectoral Initiative in Favour of Cotton in accordance with the Framework Agreement of July 2004, i.e. the expeditious, specific, and ambitious treatment of the cotton issue;

            -           increased technical assistance in the capacity building area.

58.               As a least developed country, Chad is keen to benefit fully from the Integrated Framework programme, and possibly the JITAP.  The Government of Chad is counting on all its donors and other development partners for financial assistance, and urges them in particular to step up their Official Development Assistance with a view to meeting the many socio-economic development challenges facing the country.

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