Chad: Selected Issues
Author: International Monetary Fund. African Dept.
Publication Date:
31 Jul 2019
eISBN:
9781513509648
Language:
English
Keywords:
ISCR; CR; Chad; spending; Chadian economy; governance; proceeds; health outcome; Chad's border; secondary school enrollment rates in Chad; reference ratio; characteristics of Chad; Public expenditure review; Education spending; Total expenditures; Sub-Saharan Africa
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Selected Issues

Abstract

Selected Issues

Social Spending and Development Outcomes in CHAD1

Social outcomes have improved in Chad and poverty has declined but current development outcomes remain weak. The prevailing challenging economic, social, and security backdrop create significant constraints to the delivery and financing of social spending. Looking ahead, sustained progress is needed to improve the health and education levels of a young and growing population. Higher social spending will help to deliver improved health and education outcomes together with a more efficient use of resources to ensure that any additional budget allocations can deliver the greatest impact.

A. Introduction

1. Chad has experienced an improvement in development outcomes, but the overall situation remains challenging against a backdrop of economic, social, and security pressures. Chad is a low-income country which faces significant challenges to development due to insecurity, limited state capacity, and a tense social situation. There have been long-standing security issues, particularly along Chad’s borders and in remote areas within the country. At the current juncture, terrorist attacks have led to increased deaths and injuries, sending more refugees into the Lake Chad region creating additional pressures on Chad’s existing deep development challenges. At the same time, weak governance and a sparsely populated country makes the delivery of social services more costly and difficult. Weak economic growth outside of the oil sector and a high debt burden have created further constraints on the ability of the state to meet the needs of a growing youth population.

2. This paper focuses on health and education spending. Looking ahead, Chad’s population is expected to grow at an average of 3 percent per year which will create additional demands on an already strained set of public resources. This paper gives particular focus on the impact on the health and education sectors as these are the largest component of government social spending and most significant social spending items in the Sustainable Development Goals (SDGs). The paper begins with a broader overview of development outcomes in Chad, the level and distribution of social spending in Chad, and the estimated costs of meeting the SDGs for health and education.2

B. Development Outcomes in Chad

3. Over the past two decades, the rise in national income has been associated with a decline in poverty. Following the onset of oil production in 2003, Chad experienced a rise in real GDP per capita and catch-up to the average level of income in other low-income countries across the world. Real GDP per capita more than doubled between 2000 and 2014. At the same time, the poverty headcount declined from 55 percent in 2002 to 48 percent in 2011 defined using the national poverty line.3 However, the large oil price and security shocks that began in 2014 led to a 15 percent decline in GDP per capita eroding some of the gains of the past. Economic activity has now stabilized, and per capita growth is recovering.

Figure 1.
Figure 1.

Chad: GDP per Capita, PPP

(Constant 2011 international dollars)

Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A003

Source: World Development Indicators

4. A broad measure of human development also shows an improvement over time, but Chad remains one of the lowest ranking countries in the world. The United Nation’s Human Development Index (HDI) is a summary indicator for assessing progress along three dimensions; life expectancy, access to education, and standard of living measured using Gross National Income (GNI) per capita.4 In Chad, between 2000 and 2017 increases in life expectancy, years of schooling, and GNI per capita contributed to an increase in the value of the HDI from 0.3 to 0.4. However, the level of human development remains low at a position of 186 out of 189 countries and territories.

Table 1.

Chad: Human Development Index

article image
Source: UNDP

5. Health outcomes have improved but significant gaps with other countries in the region remain. Among health indicators, there has also been an improvement overtime with maternal mortality, infant mortality, and the incidence of diseases such as malaria declining. For example, maternal mortality declined from 1370 per 100,000 live births in 2000 to 856 in 2015. This is a substantial improvement and marks the largest absolute decline in maternal mortality rates in the CEMAC region over this period. Nonetheless, the level of maternal mortality remains well above the average level in other low-income countries (479 per 100,000 live births) and sub-Saharan Africa (547 per 100,000 live births). This compares poorly with the SDG maternal mortality goal which aims to reduce the global maternal mortality ratio to less than 70 per 100,000 live births by 2030.

6. There have been strong gains in primary school enrollment rates, but access to education remains very low, particularly for girls. Primary school enrollment rates have increased from 64 percent in 2000 to 88 percent in 2016 compared with close to 100 percent gross enrollment rates in other low-income countries and sub-Saharan Africa. Secondary school enrollment rates in Chad are substantially lower at just 23 percent, compared with about 40 percent in other low-income countries and sub-Saharan Africa. Moreover, the ratio of girls to boys in primary and secondary school is just 0.7 compared with 0.9 in other low-income countries and sub-Saharan Africa. This gender disparity is strongly evident in education outcomes. Literacy rates for young males is low at 40 percent but for young females it is even lower at just 20 percent.

Figure 2.
Figure 2.

Chad: Maternal Mortality Ratio

(Per 100,000 live births)

Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A003

Source: World Development Indicators
Figure 3.
Figure 3.

Chad: Literacy Rates, Adult and Youth

(Percent of males or females in each age group)

Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A003

Note: Adults are 15+ and youth are 15–24 years.

C. Social Spending in Chad

7. Health and social spending are the largest components of social spending in Chad. Under the Fund supported program in Chad, the level of poverty-reducing social spending in percent of domestically financed primary expenditure is targeted to increase gradually. Social spending is broadly defined to include spending on education, health, gender, early childhood protection, agriculture, environment, water and sanitation and training and job promotion.5 Within these sectors, education and health spending comprises an average of 53 and 21 percent of total spending respectively and about 80 percent of total poverty-reducing social spending is in the form of wages.

8. Public health spending and the availability of healthcare is low compared to other countries. The level of public resources dedicated to health in Chad is below that of other low-income countries and sub-Saharan African countries. Public health spending in total government spending is 11 percent compared with 14 percent in other low-income countries. On a per capita basis, spending in Chad is $130 on a PPP basis, compared with $200 in other low-income countries. This translates into fewer doctors and other physical resources per capita compared with other low-income countries.

9. The education sector also faces a constrained financing environment. Spending on education is a smaller share of the budget and overall GDP compared with other low-income countries. In Chad, about 2.9 percent of GDP is spent on education compared with 4.3 percent in peer countries. The availability of teachers to students is also lower than other countries with Chad having 57 primary school students per teacher, compared with 38 in other low-income countries.

Figure 4.
Figure 4.

Chad: Public Spending on Health and Education

(Share of total government expenditure)

Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A003

Source: World Development Indicators
Figure 5.
Figure 5.

Chad: Doctor and Primary School Teacher Ratios

(Ratio)

Citation: IMF Staff Country Reports 2019, 259; 10.5089/9781513509648.002.A003

D. Meeting the Sustainable Development Goals in Health and Education

10. The SDGs for health and education are ambitious objectives, particularly given Chad’s starting point. The SDG for health is to ensure healthy lives and promote well-being for all ages. The goal is underpinned by nine targets which can be measured using 21 indicators. For example, it includes the goal of reducing the global maternal mortality ratio to less than 70 per 100,000 live births and ending preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce under-5 mortality to at least 25 per 1,000 live births by 2030. The SDG for education seeks to ensure inclusive and quality education for all and promote lifelong learning which includes ensuring that all girls and boys complete free, equitable, and quality primary and secondary education leading to relevant and effective learning outcomes by 2030.

11. Meeting the SDGs for health and education will require allocating adequate resources to these sectors to be spent efficiently. The cost of meeting the SDGs for health and education for Chad by 2030 can be estimated using a methodology developed by Fund staff (see footnote 1 for reference). For each sector, the main inputs for delivering the social service are identified together with a reference unit cost for each input. The total level of spending needed by 2030 is then estimated based on the underlying population and economic growth rate for Chad. For health, the main inputs are the number of healthcare workers and, for education, it is the number of teachers and other current and capital spending. The level of inputs and reference unit costs is based on the median for other low-income countries that perform well today in meeting the SDGs (see annex for details).

12. Low-income countries that perform well in meeting the SDGs are also among the most efficient in terms of spending. Low-income countries that perform well in terms of health outcomes tend to have more medical personnel and pay relatively lower wages than other countries of the same income group. Similarly, in the education sector, low-income countries with relatively high education outcomes tend to have fewer students per teacher and pay relatively lower wages (as a ratio of GDP per capita) than other countries of the same income group. Since the level of inputs and reference unit costs used in the estimations for Chad in 2030 are based on the high-performing low-income countries, there is an underlying assumption in the methodology that assumes that resources are re-allocated to increase the efficiency of spending.

13. Estimates suggest a sizeable scaling up of resources and a more efficient allocation of these resources are needed in Chad. It is important to recognize that these estimates are tailored to Chad in terms of estimated population and economic growth. However, they do not reflect all of the characteristics of Chad, including that it is landlocked country with a highly dispersed population, and relatively weak security conditions in parts of the country which may mean that the cost of delivering these social services on a per capita basis may be higher for Chad than in other high-performing low-income countries. As such, the estimates provide an indicative guide as to the minimum level of spending that may be needed to meet the SDGs for health and education.

  • Within the health sector, the reference ratios show that high performing low-income countries have more doctors and medical personnel per person. These countries have 9 doctors per 10,000 people compared with just 0.4 doctors in Chad in 2018. They also have many more other medical personnel such as nurses delivering health care. Moreover, the share of doctor wages relative to GDP per capita is also much lower in other low-income countries suggesting that better health outcomes can be achieved by allocating a relatively lower level of resources to doctor wages. Overall, the estimates suggest that health spending, as a share of GDP, would need to increase from 4.9 percent currently to 10.9 percent in 2030 to meet the SDG for health.

  • In the education sector, high performing low-income countries have fewer students per teacher, with just 15 students per teacher compared with 46 in Chad. Given the increase in the number of students projected over the coming decade, this implies a significant increase in the number of teachers needed in Chad. Similar to the health sector, the share of teacher wages, as a ratio to GDP per capita, is lower in high performing low-income countries. Overall, projections out to 2030 for Chad suggest there is a need for a significant increase in education spending from 4 to about 14 percent of GDP.

Table 2.

Chad: Costing Estimates for Meeting the SDGs in Health and Education

article image
article image
Source: Staff calculations

E. Conclusion

14. Raising outcomes in health and education requires a concerted effort to dedicate more public resources to these sectors. Chad has made progress in improving access to education and health services, but with population growth of 3 percent per year, continued efforts are needed to increase the provision of services. By 2030, there will be an additional 1.7 million youth that will be entering the education system and a total of about 5 million people in need of health care services. Key to the scaling up of these services will be to ensure that resources are allocated efficiently given the immense development needs of the country.

15. Identifying sustainable sources of financing is central to the challenge of improving development outcomes. Estimates suggest that efficiency gains alone will not be sufficient to meet the demands for health and education. Additional sources of revenue from domestic sources, international partners, and the private sector will be needed to meet the long-term financing challenge.

Annex. Sustainable Development Goals and Methodology

The annex provides the set of targets which are used to achieve Sustainable Development Goals (SDGs) and a summary of the methodology used to estimate the cost of meeting the SDGs in health and education by 2030.

A. Sustainable Development Goals: Targets for Health and Education

Sustainable Development Goal 3: Good health and well-being for all

Ensure healthy lives and promote well-being for all at all ages.

Goal 3 Targets

3.1 By 2030, reduce the global maternal mortality ratio to less than 70 per 100,000 live births.

3.2 By 2030, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce neonatal mortality to at least as low as 12 per 1,000 live births and under-5 mortality to at least as low as 25 per 1,000 live births.

3.3 By 2030, end the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases and combat hepatitis, water-borne diseases and other communicable diseases.

3.4 By 2030, reduce by one third premature mortality from non-communicable diseases through prevention and treatment and promote mental health and well-being.

3.5 Strengthen the prevention and treatment of substance abuse, including narcotic drug abuse and harmful use of alcohol.

3.6 By 2020, halve the number of global deaths and injuries from road traffic accidents.

3.7 By 2030, ensure universal access to sexual and reproductive health-care services, including for family planning, information and education, and the integration of reproductive health into national strategies and programmes.

3.8 Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all.

3.9 By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination.

Sustainable Development Goal 4: Quality Education

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.

Goal 4 Targets

4.1 By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and Goal-4 effective learning outcomes.

4.2 By 2030, ensure that all girls and boys have access to quality early childhood development, care and preprimary education so that they are ready for primary education.

4.3 By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university.

4.4 By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship.

4.5 By 2030, eliminate gender disparities in education and ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations.

4.6 By 2030, ensure that all youth and a substantial proportion of adults, both men and women, achieve literacy and numeracy.

4.7 By 2030, ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including, among others, through education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and nonviolence, global citizenship and appreciation of cultural diversity and of culture’s contribution to sustainable development.

B. Costing methodology

Education

Total spending for education can be expressed as

Total education spending = (AWAGE * TSR * ER * SAP) / (1 – y – z),

in which main costing parameters include number of teachers, which is derived as the product of the teacher-to-student ratio (TSR), enrollment rates (ER), and school-age population (SAP); teacher salaries (AWAGE); share of noncompensatory current expenses (y); and share of capital expenses (z).

The methodology sets values for TSR, AWAGE, y, and z at the median values observed today in countries with high education outcomes, separately by income group.6 Next, for each country, education spending in 2030 is estimated using the corresponding benchmarked key inputs and unit costs and the country’s projections for economic growth and school-age demographics. We assume in 2030 full enrollment for at least 2 years of preprimary and tertiary education and 12 years of primary and secondary education. Target enrollment rates are 50 percent for preprimary and tertiary and 100 percent for primary and secondary.

Health

Total spending for health can be expressed as:

Total health spending = (DPR * pop * (1 + α/ρ) * DAWAGE) / (1 – x – y),

in which key costing inputs and unit costs include doctor salaries (DAWAGE); number of doctors and other medical personnel (derived using doctor density (DPR), total population (pop), and ratio of doctors to all other health staff (p)); the ratio of all non-doctor wages to doctor wages (α); the share of noncompensatory current expenses (y); and the share of capital expenses (z).7

The derivation of the benchmarks for DAWAGE, DPR, and ρ is done separately by income group, setting their values at the median observed today in countries with high health outcomes.8 Then, for each country, health spending in 2030 is estimated based on the benchmarked parameters, using country-specific projections for economic growth and demographics.

1

Prepared by Preya Sharma.

2

See Gaspar V., Amaglobeli D., Garcia-Escribano M., Prady D., and Soto M. 2019. “Fiscal Policy and Development: Human, Social, and Physical Investment for the SDGS.” IMF Staff Discussion Note 19/03, International Monetary Fund, Washington, DC.

3

The national poverty line is the Chad specific poverty line rather than the $1.90/day concept used by the World Bank and is defined by the National Statistical Office. It represents the consumption of food required to obtain 2,400 Kcal per day plus the average consumption of non-food items by a population around the food poverty line. Once regional disparities in prices of food are taken into consideration, the total poverty line represents 237,942 CFA (equivalent to US$406) per person per annum deflated to N’Djamena equivalent prices.

4

Access to education is based on two indicators. Expected years of schooling is the number of years of schooling that a child of school entrance age can expect to receive if prevailing patterns of age-specific enrolment rates persist. Mean years of schooling is the average number of years of education received by people ages 25 and older.

5

The definition used in the Fund-supported program is broadly based on the expenditure of the following ministries in charge of social sectors, as recommended by the World Bank in the absence of a budgetary functional classification; (i) National Education and Civic Promotion, (ii) Public Health, (iii) Women, Early Childhood Protection and National Solidarity, (iv) Production, Irrigation and Agricultural Equipment, (v) Livestock and Animal Production, (vi) Environment, Water and Sanitation, and (vii) Professional Training and Small Job Promotion.

6

Benchmarks are set at the median for the parameters averaged from preprimary to tertiary levels. Countries’ GDP per capita in 2030 is used for mapping to the income groups and benchmarked parameters. Three groups are considered by GDP per capita (less than US$3,000; between US$3,000 and US$6,000; and between US$6,000 and US$18,000). High-performing countries are those with an SDG4 education index above 80 in the low-income group, above 82 in the middle-income group, and above 84 in the high-income group. The thresholds are chosen to allow for a representative sample size of high-performing countries in each group.

7

It is assumed that the ratio of all non-doctor wage to doctor wage to is 0.5. Shares of capital (x) and other current spending (y) in total spending are imputed using World Bank regional and income group averages.

8

Countries are grouped into three income groups using the same income ranges for education. High performing countries are those with an SDG3 health index above 70 in the lowest income group, above 78 in the median income group, and above 84 in the highest income group.

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Cover IMF Staff Country Reports
Chad: Selected Issues
Author: International Monetary Fund. African Dept.
Volume/Issue:
Volume 2019: Issue 259
Publisher:
International Monetary Fund
ISBN:
9781513509648
ISSN:
1934-7685
Pages:
39
DOI:
https://doi.org/10.5089/9781513509648.002
  • View in gallery

    Chad: GDP per Capita, PPP

    (Constant 2011 international dollars)

  • View in gallery

    Chad: Maternal Mortality Ratio

    (Per 100,000 live births)

  • View in gallery

    Chad: Literacy Rates, Adult and Youth

    (Percent of males or females in each age group)

  • View in gallery

    Chad: Public Spending on Health and Education

    (Share of total government expenditure)

  • View in gallery

    Chad: Doctor and Primary School Teacher Ratios

    (Ratio)

Chad: GDP per Capita, PPP

(Constant 2011 international dollars)

Chad: Maternal Mortality Ratio

(Per 100,000 live births)

Chad: Literacy Rates, Adult and Youth

(Percent of males or females in each age group)

Chad: Public Spending on Health and Education

(Share of total government expenditure)

Chad: Doctor and Primary School Teacher Ratios

(Ratio)