Abstract
Selected Issues
Governance in Chad: Macroeconomic Implications and Policy Priorities1
A. Introduction
1. Good governance, including the control of systemic corruption, is critical for sustainable and inclusive economic growth. Weak governance and corruption are systematically associated with lower growth and investment and higher inequality (IMF, 2018). Improving governance and reducing corruption are largely budgetary-neutral reforms that ameliorate the business climate, strengthen government effectiveness, boost economic activity, and create jobs.
2. Improving governance and addressing corruption is an important priority for the government. Currently, Chad performs poorly across a range of governance and corruption indicators which are associated with holding back private sector growth. As such, the government’s Vision 2030 has four objectives, one of which is strengthening good governance and the rule of law. It was also set as a priority reform for the National Development Plan and a key measure to improve the business climate as proposed at the national week of reflection on private sector contribution to the economic recovery held in 2018.
3. This chapter looks at three dimensions of governance in Chad and describes the progress made and areas for future development. It first discusses the macroeconomic implications of weak governance and corruption and presents estimates of the positive impact of an improvement in governance. It then discusses fiscal governance, oil sector oversight, and the anti-corruption framework which are considered key areas where improved governance is needed.
B. The Macroeconomic Implications of Governance and Corruption
4. There are a number of channels through which governance and corruption have macroeconomic implications. Corruption can be seen to influence macroeconomic outcomes through the main channels of interaction between the state and the economy, such as the execution of budgetary policy and the delivery of public services, market regulation, financial sector oversight, and public order and enforcement. While the precise transmission mechanisms are difficult to pin down, there is an adverse corruption-growth nexus. For example, this can take the form of weak governance and corruption reducing the attractiveness of economic space to domestic and foreign investment. This can feed into predatory tax behavior because of a narrowing in the productive base that reduces revenues to the government. Lower revenue along with inefficient and untargeted spending result in poor infrastructure and human capital which in turn makes the economic environment less conducive to investment and private sector activity.
5. There is a broad set of literature which seeks to measures the macroeconomic implications of governance and corruption. A meta-analysis covering 43 studies indicates that corruption and weak governance are associated with slower growth (IMF, 2018). These studies use a variety of techniques to estimate the direct impact on growth and the indirect impact through channels such as investment, human capital, and public finance. Moreover, the finding of the negative association with growth is robust across different measures of corruption and governance quality, estimation techniques, and controls for institutional quality. Nonetheless, despite this strong body of evidence, it is important to bear in mind that corruption and governance are difficult to measure categorically and there are endogeneity issues in identifying a causal relationship to growth.
6. Measures of governance and corruption indicate that while there has been some improvement, Chad performs poorly relative to peers. Indicators of governance and corruption are based on a comparison across countries and surveys of perceptions of the private sector. The governance indicator, WGI, is constructed as an aggregate measure using the sum of the six indicators from Kaufmann and Kraay (see Kaufmann et al, 2010): voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, and control of corruption (CCI). The corruptions perception index (CPI) is developed by Transparency International and is a combination of 13 surveys and assessments on perceived levels of public sector corruption according to experts and businesspeople. On both of these measures, Chad performs lower than the average for CEMAC and is considerably below the average for sub-Saharan Africa.
Chad: Governance and Corruption Indicators
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Chad: Governance and Corruption Indicators
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Chad: Governance and Corruption Indicators
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
7. Estimates suggest that the growth payoff from improving governance and reducing corruption could be sizable. Using estimates of the potential long-run growth gains in other countries with higher levels of governance and lower perceptions of corruption, it is possible to provide a guide to the growth payoff to Chad (Box 1). The growth payoff is based on elasticities calculated for sub-Saharan Africa and alternative measures of governance and corruption (Hammadi et al, 2010).
Estimated impact of enhancing governance. Increasing the level of governance to the average of CEMAC countries could potentially raise GDP per capita growth in Chad by 0.6 percentage points. An improvement to the average of sub-Saharan Africa would have an even larger growth impact of 2.3 percentage points.
Estimated impact of reducing corruption. Reducing corruption to the average of CEMAC countries could potentially raise GDP per capita growth in Chad by 0.6 percentage points, using either measure of the Control of Corruption (CCI) or the Corruptions Perceptions Index (CPI). A reduction in corruption to the average of sub-Saharan Africa would have an average effect of about 2.1 percentage points.
Estimated Impact on Growth of Enhancing Governance and Reducing Corruption
The positive correlation between improved governance and economic growth is well established in the literature. The elasticities used in this paper to estimate the potential growth payoff of improvements in governance are based on a recent working paper by Fund staff and are broadly in line with the existing literature (Hammadi et al, 2010). The paper estimates the growth payoff for an overall sample covering all countries in the world including advanced, emerging, and low-income economies, and also estimates the impact for sub-Saharan African.
Estimates suggest that the correlation between governance and growth in sub-Saharan Africa could be stronger than in other regions. The estimates are based on a standard growth model augmented for governance and corruption to assess the impact on GDP per capita growth for 190 countries using 5-yearly observations over the period 1984–2015 in a system generalized method of moments model. The control variables are initial GDP per capita, gross capital formation, level of education, dummy variable for high inflation, and terms of trade. The sensitivity analysis suggests that the results are robust to changes in the time period and alternative governance indicators. The estimated elasticities imply that:
The growth payoff from governance improvements in sub-Saharan Africa is two to three times larger than for the average country in the rest of the world. A one-standard deviation improvement in governance in the sample for sub-Saharan Africa, equivalent to an average sub-Saharan African country converging to the world average, is associated with a 1–2 percentage point increase in GDP per capita growth.
Similarly, improving corruption perceptions up to the world average could increase GDP per capita growth by about 1 percentage point. This impact is similar to that of other regions which are also perceived to have high corruption.
| Estimated elasticities | Governance | Corruption | |
|---|---|---|---|
| WGI | CCI | CPI | |
| Overall sample | 0.036 | -0.02* | -0.012 |
| Sample for sub-Saharan Africa | 0.087* | -0.093* | -0.09* |
| Estimated elasticities | Governance | Corruption | |
|---|---|---|---|
| WGI | CCI | CPI | |
| Overall sample | 0.036 | -0.02* | -0.012 |
| Sample for sub-Saharan Africa | 0.087* | -0.093* | -0.09* |
Tailoring these estimates to Chad imply sizable growth payoffs from improved governance and lower corruption for Chad. The elasticities for sub-Saharan Africa are applied to the governance and corruption indicators for Chad. It is important to note that this is a partial analysis which captures the marginal impact of governance and corruption improvements, while other variables remain constant. Moreover, given that the process of institutional reforms takes considerable time and effort, the time period over which these gains are achieved is likely to be long. Nonetheless, they do suggest that the indicative growth payoff is economically meaningful.
Estimated increase in real GDP per capita growth for Chad
(Percentage points)
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Source: IMF staff calculations.Estimated increase in real GDP per capita growth for Chad
(Percentage points)
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Source: IMF staff calculations.Estimated increase in real GDP per capita growth for Chad
(Percentage points)
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Source: IMF staff calculations.C. Fiscal Governance
8. Tax revenue performance is hampered by widespread exemptions and weak VAT collection. The cost of tax exemption is particularly high.2 In addition, based on a sample of 47 (out of a total of 150–250) “conventions d’établissement”, a European Union financed audit estimated the cost of exemptions for the Tax Directorate at about one percent of non-oil GDP in 2015. Revenue from the VAT, which stands at about 1 percent of non-oil GDP, is among the lowest in Africa, given weak VAT administration, the large deficiencies in the VAT refund mechanism, exemptions on VAT, and the large size of the informal sector in Chad. Given the critical need to improve non-oil revenue mobilization, efforts are underway to widen the tax base, rationalize exemptions and strengthen the VAT regime. This includes measures to better control the extension of exemptions, plans to regularly publish a list of all new exemptions, set-up a VAT refund mechanism, and reduce VAT exemptions. In January 2018, the authorities introduced a new measure requiring payment of taxes through the banking system (so called “bancarisation des Recettes”), which helped improve tax collection in the first half of 2018.
9. Strengthening governance would help yield significantly higher tax revenue (Figures 2 and 3). Cross-country analysis shows that there is a positive correlation between the level of governance and the non-oil revenue to GDP ratio. In that context, an improvement in governance would improve the tax potential in Chad. Based on current estimates, Chad’s non-oil tax potential stands at about 10.5 percent of non-oil GDP.3 Holding other factors constant, improving Chad’s level of governance to the level of the CEMAC average would increase the tax potential to about 12 percent of non-oil GDP. Improving the level of governance to the average of sub-Saharan African countries would increase it to 12.5 percent.
10. Public financial management in Chad is very weak. According to the Public Expenditure and Financial Accountability (FEFA), Chad scores poorly relative to peers with a D score on 31 indicators, and a C score on four other indicators. The PFM is marked by a weak respect of the spending chain, excessive use of emergency spending procedures, and weak cash management which led to the accumulation of large amount of arrears and has undermined the effective implementation of the budget.
Governance and Tax to GDP Ratio
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Governance and Tax to GDP Ratio
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Governance and Tax to GDP Ratio
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Estimates of Chad’s Tax Potential
(Percent of non-oil GDP)
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Estimates of Chad’s Tax Potential
(Percent of non-oil GDP)
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Estimates of Chad’s Tax Potential
(Percent of non-oil GDP)
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
11. While efforts are underway to improve budget implementation and address the large stock of domestic arrears, more determined reforms and a stricter implementation of existing processes are needed to improve governance in this area. In spite of a series of measures to limit the use of emergency spending procedures (DAO) and accelerate the regularization of DAO, their use was not significantly contained, and the accumulation of domestic arrears while not severe, continues. The authorities should improve the process of budget preparation and public debt management, strengthen the reporting and monitoring of spending, and limit the use of emergency spending. Despite some progress, delays in the completion of the audit of domestic arrears and development of a clearance strategy is holding back the economic recovery. The weak capacity of cash management and use of multiple accounts at banks are undermining the authorities’ capacity to effectively execute the budget. Against this background, efforts should concentrate on (i) preparing monthly cash flow projections in the context of the 2020 budget, which would be updated on a semi-annual basis, (ii) adding information on investment plans to the 2020 budget, and (iii) initiating discussions on setting a single treasury account beginning with taking stock of all existing accounts in commercial banks.
D. Oil Sector Oversight
12. The oil sector has become a pillar of Chad’s economy, accounting for the bulk of the country’s exports and government revenues. The size of oil production and revenues have fluctuated since the beginning of oil production in 2003 reflecting oil price and volumes swings. In 2018, oil production accounted for about 20 percent of GDP (CFAF 1170 billion), oil exports were roughly 80 percent of export, and oil-related revenue made up about 45 percent government revenues. Given the size of the sector and its importance for the budget, transparency and good governance are crucial to improve its contribution to economic development in Chad. Chad has three main oil producing companies: the Doba consortium led Esso, the oldest (since 2004), the China National Petroleum Corporation International (CNPCI), the largest producer, and Glencore. In addition, SHT (Societe des Hydrocarbures du Tchad) is the public enterprise that manages government oil assets and is set to increase its own production of oil.
13. The government holds considerable participations in the oil sector. These participations are assigned to the SHT for management. The major acquisition occurred in 2014 with the purchase of the 25 percent in the Doba Consortium from Chevron. Also, in 2014, the Government assumed 10 percent in the CNPCI’s two producing fields.
14. The oil sector in Chad is marked by the coexistence of two legal regimes. Chad’s revised Hydrocarbons Law adopted in 2007 added to the concession or tax/royalty regime a second regime, the Production Sharing Contract (PSC). In practice, all licenses issued since 2007 are of the PSC type. However, holders of previously issued licenses have used their fiscal stability clauses and opted to remain with the concession regime. Thus, the Doba Consortium and the first phase of the CNPCI production continue as concessions, while the second phase of CNPCI and Glencore are under the PSC. The main features of the two regimes are the followings:
Under the concession regime, the government cedes to a company the ownership rights over a natural resource for a specific period of time, while the company pays royalties and profit tax.
Under a PSC, the government retains the full rights over the natural resource. It appoints a company as a contractor for operations to produce the resource. For that, the company is rewarded with a share of the oil, after having been reimbursed for its expenses.
15. Multiple bodies are involved in the oversight of the oil sector. The oil sector is under the supervision of the Ministry of Petroleum and Energy which is responsible for the development and implementation of the government policies for the sector. In addition, the main bodies involved in the oil sector oversight are “Le Collège de Contrôle et de Surveillance des Recettes Pétrolière” which is in charge of verifying the appropriate budgetary allocation and use of petroleum resources and SHT is the public enterprise that manages government oil assets.
16. The commercial debt contract with Glencore has added complexity of the flow of revenue from the oil sector. In 2013, the Government borrowed US$600 million for budget financing, and in 2014 the SHT borrowed—with a government guarantee—US$1.356 billion for purchasing a 25 percent share in the Doba Consortium. The debt, collateralized by government oil, is serviced through direct deduction from the proceed of government-oil cargoes sold by Glencore-contracted to sell government-owned oil on the international market.
17. The June 2018, restructuring of the Glencore debt was an opportunity to shed transparency in Chad on the contract. More information on government oil revenues is now available for the authorities. Under the agreement, government oil which consists of royalties in kind and equity collected by SHT from the three oil producers is used for domestic consumption and exports (Figure 4):
Up to 4 million barrels are sold to the national refinery (SRN) at a fixed price ($46.85). Revenue to SHT from the sale are first available for the electricity company (SNE) to buy refined oil from SRN as an off-budget operation and the remaining amount goes to the Treasury. The SRN, which is 60 percent owned by CNPC, compensates the government for 60 percent of the difference between international prices and the fixed price.
The remaining quantity of government oil is delivered to Glencore for sale at the international market. The net oil proceeds after Glencoe debt payment are deposited in a government offshore account. The ministry of finance is responsible for transferring net oil proceeds to the Treasury account at the BEAC. However, there is uncertainty on the periodicity of these transfers and information on the account balance is not available in a timely fashion.
Chad: Oil Revenue Flows, end-2018*
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
*This chart does not reflect expected oil production in 2019 by SHT (Societe des Hydrocarbures du Tchad). It shows profit tax currently paid by the Doba consortium (50 percent of profit) and Glencore which pays in kind (CNPC is expected to start paying profit tax after the expiration of its exemption due to initial investment later this year or 2020), and the amount transferred by Glencore to the escrow account which doesn’t include the royalties in cash received by the Treasury in early 2018.Chad: Oil Revenue Flows, end-2018*
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
*This chart does not reflect expected oil production in 2019 by SHT (Societe des Hydrocarbures du Tchad). It shows profit tax currently paid by the Doba consortium (50 percent of profit) and Glencore which pays in kind (CNPC is expected to start paying profit tax after the expiration of its exemption due to initial investment later this year or 2020), and the amount transferred by Glencore to the escrow account which doesn’t include the royalties in cash received by the Treasury in early 2018.Chad: Oil Revenue Flows, end-2018*
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
*This chart does not reflect expected oil production in 2019 by SHT (Societe des Hydrocarbures du Tchad). It shows profit tax currently paid by the Doba consortium (50 percent of profit) and Glencore which pays in kind (CNPC is expected to start paying profit tax after the expiration of its exemption due to initial investment later this year or 2020), and the amount transferred by Glencore to the escrow account which doesn’t include the royalties in cash received by the Treasury in early 2018.18. The restructuring of the Glencore debt has helped to restore debt sustainability and generate significant resources to the budget. Specific contingencies are included to provide some protection to Chad in case of lower oil receipts. Debt service payment is now made on a quarterly basis, including additional debt service (amortization and interest) through the cash sweep mechanism if average year-to-date oil prices are higher than the baseline set in the new contract. Under the new contract, oil export revenues received by the Treasury increased from 8 percent of gross revenues in 2017 to 43 percent in 2018 (Figures 5 and 6).
Chad: Distribution of Government Oil Exports Revenues in 2017
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Chad: Distribution of Government Oil Exports Revenues in 2017
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Chad: Distribution of Government Oil Exports Revenues in 2017
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
Chad: Distribution of Government Oil Exports Revenues in 2018*
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
* Based on data received from the Treasury and does not include balance at the Citi bank.Chad: Distribution of Government Oil Exports Revenues in 2018*
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
* Based on data received from the Treasury and does not include balance at the Citi bank.Chad: Distribution of Government Oil Exports Revenues in 2018*
Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A002
* Based on data received from the Treasury and does not include balance at the Citi bank.19. Good progress has been made in improving the transparency and oversight of the oil sector. The ministry of finance is publishing a quarterly note on oil sector that describes recent developments in the oil sector including information on production, export, new exploration, government oil revenues, and Glencore debt service. The authorities have also adopted a disclosure policy on oil contracts and licenses. In addition, Ernest and Young has been appointed to be in charge of the monitoring and calculation for the implementation of the 2018 Glencore debt contract. The EITI noted the good progress made by the authorities in the publication of oil contracts and of oil revenues, including those earmarked for debt servicing. It encouraged the authorities to publish all revenues paid locally and transfers to local communities and to ensure that all oil-related expenditures are reflected in the government budget. The next assessment by the EITI will start in November 2020.
20. Moving forward, efforts to further enhance transparency should focus on two main areas for improvement:
The balance of the government offshore account should be more transparent to allow it to be reflected in the Treasury balance sheet. A transfer mechanism should be defined and implemented.
Crude oil delivered from the SRN to the SNE should be transparently reflected in the budget as a subsidy to the electricity company with the corresponding oil receipts reflected as revenues to the government.
E. Anti-Corruption Framework
21. Strengthening governance and the rule of law are central to Chad’s National Development Plan. The government’s Vision 2030 has four objectives of which strengthening good governance and the rule of law is the second axis. From a broad perspective it covers (i) promoting performance and motivation in public administration, (ii) promoting good economic governance, (iii) strengthening real democratic culture as mode of governance, and (iv) strengthening security as a development factor.
22. The institutional framework around which anti-corruption efforts are undertaken includes a number of bodies. The institutions include, amongst others, the judiciary, the Cour des Comptes which sits with the Supreme Court and is responsible for supporting implementation of the finance law, an audit office in the Office of the President, which conducts inspections, audits and investigations to ensure the sound and transparent management of public finances, and Agence Nationale d’Investigation Financière (ANIF) which is the national financial investigative agency. The responsibilities of ANIF includes enforcing anti-corruption legislation on economic crimes which criminalizes active and passive bribery, embezzlement and influence peddling, and money laundering, among other crimes. As with other state bodies, these anti-corruption bodies face considerable resource and personnel constraints in meeting their objectives.
23. The United Nations Convention against Corruption (UNCAC) provides a framework for the development of an effective anti-corruption regime. The UNCAC calls for the development of an effective anti-corruption regime. The convention covers five main areas; preventive measures, criminalization and law enforcement, international cooperation, asset recovery, and technical assistance, and information exchange. In particular, preventative measures include the establishment of anticorruption bodies, asset declaration by public officials, and transparency in public services.
24. Chad ratified the UNCAC in 2017 and is now moving to implement the main elements of the framework. Against a background of limited capacity, fragility of institutions, and vested interests, a pragmatic and realistic strategy to tackle corruption could initially focus on actions to prevent corruption and detect the laundering of its proceeds abroad, while encouraging domestic investigative capacity building in the longer term. In that context, the anti-corruption legal framework should be strengthened to facilitate detection, investigations, and recovery of proceeds of corruption abroad through international cooperation by ensuring that; (i) all acts of corruption are criminalized in line with the UNCAC, (ii) the laundering of proceeds of these acts is criminalized in line with the requirements of the Financial Action Task Force (FATF), and (iii) there are no undue impediments to mutual legal assistance in cross-border cases. This will require ensuring adequate resources and skilled personnel for anti-corruption agencies.
25. An effective asset declaration framework is a valuable tool in strengthening the accountability of public officials. The authorities are working on an enforceable, transparent, and comprehensive asset disclosure system focusing on high-level officials. Asset disclosure obligations generally require the submission of a detailed form on both assets legally owned and beneficially owned, including of family members and close associates, and the publication of disclosures where appropriate. Such a system should facilitate the implementation of customer due diligence requirements by domestic and foreign banks when their customers are senior officials from Chad, and the qualification of acts of corruption, including illicit enrichment, by law enforcement agencies. According to the Constitution, the President, and members of the parliament (articles 72 and 104) are required to declare their assets when entering their functions. The focus is now on developing implementing legislation and a well-equipped agency to ensure reporting, assessments and enforcement.
26. Steps are also needed to strengthen the AML/CFT framework. The Financial Action Task Force (FATF) calls for the mobilization of the anti-money laundering framework to help detect and trace the laundering of proceeds of corruption and assist in the investigation and prosecution of bribery. Specific elements of the AML/CFT framework are particularly relevant in Chad, including: implementation of enhanced due diligence requirements for domestic politically-exposed persons (PEPs) and reporting by financial institutions of transactions when they suspect or have reason to suspect that the funds are the proceeds of criminal activity, including corruption. Chad is a member of the Groupe d’Action contre le blanchiment d’Argent en Afrique Centrale (GABAC). It has been assessed against the 2002 FATF standard and has yet to be assessed against the revised standard. As a member of the Central African Economic and Monetary Community (CEMAC), Chad is subject to the regional legal framework on AML/CFT and the implementing regulations issued for banks by the Commission bancaire de l’Afrique centrale (COBAC). As indicated in the 2015 FSSA on the CEMAC and the 2019 Staff Report for the Common Policies of CEMAC Member Countries, the AML/CFT framework needs to be rapidly strengthened both at the national and regional levels, in particular the risk-based supervision of the banking sector to ensure implementation of anti-corruption related measures.4
F. Conclusion
27. Improving governance is central to the development process and is a key contributor to raising growth in Chad. Strengthening governance and reducing corruption through increased transparency and accountability provides an important opportunity to support growth, generate revenues, and improve the allocation of public resources. This paper focused on tangible reforms in fiscal governance, oil sector oversight, and the anti-corruption framework, all of which are central to improving economic management. Sustained efforts to continue to push forward reforms will help create an environment which fosters private sector led development and more sustainable and inclusive growth.
References
International Monetary Fund (2018), Review of 1997 Guidance Note on Governance – A Proposed Framework for Enhanced Fund Engagement.
Kaufmann, D., A. Kraay, and M. Mastruzzi. 2010. “The Worldwide Governance Indicators: Methodology and Analytical Issues.” Policy Research Working Paper WPS5430. World Bank.
Hammadi, A., M. Mills, N. Sobrinho, V. Thakoor, and R. Velloso. 2019. “A Governance Dividend for Sub-Saharan Africa?” Working Paper WP/19/1. International Monetary Fund.
Prepared by Moez Ben Hassine, Samuel Delepierre and Preya Sharma. Section E benefited from input from Mr. Chady Adel El Khoury and Ms. Sabrino Lando (Legal Department).
Despite the difficulty to precisely assess the shortfall in revenues, partial estimates by Fund TA missions assessed the shortfall at around CFAF 45 billion (about 1 percent of non-oil GDP) for the Tax Directorate in 2016 and CFAF 140 billion (2.7 percent of non-oil GDP) for the Customs Directorate in 2015.
Staff applied a fixed effect linear specification to estimate tax potential and tax effort in Chad using a panel data for 153 countries between 2000 and 2016, see Country Report No. 17/246 for more details.
For more details, see: Staff Report on the Common Policies of Member Countries of the CEMAC (IMF country report No 19/1 published in January 2019) and the Selected Issues Paper on A Regional Approach to Enhancing Governance and Reducing the Potential for Corruption in the CEMAC (IMF Country Report No 19/2 published in January 2019).
