Beverages, cement…: Beac predicts a drop in activity in Chad in the 3rd quarter
The Central African Economic and Monetary Community (CEMAC) through the Bank of Central African States (BEAC) has forecasted a downturn in economic activity for Chad in the upcoming third quarter. This prediction aligns with the broader economic challenges faced by the region, reflecting a complex interplay of both global and local factors.
Chad’s economy, heavily reliant on the export of commodities such as crude oil, has been vulnerable to global market fluctuations. The predicted decrease in activity within key sectors such as beverages and cement is indicative of a broader economic slowdown. This downturn can be attributed to several factors, including reduced consumer spending, logistical challenges, and a decrease in foreign direct investment.
The beverage industry, often seen as a bellwether for consumer confidence, is expected to face reduced demand. This could be due to a combination of reduced disposable income among consumers and potential supply chain disruptions. Similarly, the cement industry, crucial for infrastructure development, may experience a slump as public and private construction projects are delayed or scaled back.
To mitigate these challenges, Chad needs to diversify its economy and reduce its dependency on a few key sectors. Strategies could include investing in sustainable agriculture, developing renewable energy sources, and enhancing the digital economy. Additionally, improving the business environment through policy reforms and investing in human capital could attract more diverse foreign investment.
The BEAC’s forecast serves as a crucial indicator for policymakers and investors alike. It highlights the need for proactive measures to cushion the economy against external shocks and to foster a more resilient economic landscape. As the third quarter approaches, all eyes will be on Chad to see how it navigates these turbulent economic waters and positions itself for recovery and growth in the long term.
The Bank of Central African States (BEAC) has just published the Economic Forecast Test for CEMAC (Cameroon, Chad, Congo, Gabon, CAR and Equatorial Guinea) in the third quarter of 2024. For the specific case of Chad, the outlook is mixed. According to the Bank common to the 06 States of this economic zone, the production and sale of cement would be down with a possible negative impact on turnover due to the rainy season. It should be noted, however, that the social climate within the National Cement Company in Chad (Sonacim) has not been at its best in recent years. In May 2023, for example, the country expressed, through a call for tenders, its desire to sell 70% of the State’s shares in Sonacim to the private sector.
Another activity that would experience a decline is road transport. Here, we learn, that demand would weaken in the 3rd quarter of 2024 due to the occupation of the population by fieldwork “as well as the impassability of roads in certain areas”. Still according to the projections of the institution headed by Ivon Sana Bangui, the construction and rehabilitation activities of roads started in the first quarter of 2024, could diminish in the third quarter of 2024, due to the rainy season which would make the work difficult. All this would lead to “drops in turnover and employee numbers”. To stem the effects of flooding, a provision of 2 billion CFA francs has been made to acquire dump trucks that will carry out the cleaning of gutters in large cities.
As for the beverage industry, a “drastic” drop in demand for Brasserie du Tchad products is expected while stocks would be higher. The origin of this slowdown in activity would also be due to the impassability of roads during the rainy season. On the other hand, the Compagnie Sucrière du Tchad; the public sugar producer would be at the end of the campaign, therefore, there would be no production. This would cause a drop in stocks as well as sales.
In the city of Sarh, demand for pharmaceutical products is expected to decline according to the Beac due to strong competition from the “proliferation of informal pharmacies” accentuated by the rainy season. As for the water production, distribution and treatment sector, Chad should expect a decline in the turnover of the Chadian Water Company (STE) “due to the free water introduced by the government”; which would face an increase in demand.
However, it should be noted that economic activity would be favourable in many other sectors in Chad at the end of the 3rd quarter of 2024. These include accommodation and catering, agriculture, oil, communication, wholesale and retail trade, underlines the Beac.
