Fitch Affirms Chad at ‘B-‘ With Stable Outlook
Fitch Ratings has affirmed Chad’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B-‘ with a stable outlook.
Chad’s credit ratings reflect the country’s very low GDP per capita compared with peers at 40% of the current ‘B’ median, weak governance, high share of informality as well as a significant dependence on oil.
This is balanced by Chad’s comparatively low debt/GDP level, high concessionality of the external debt stock and strong donor support. “We consider that conditions in the primary debt market for members of the Economic and Monetary Community of Central Africa (CEMAC) remain strained.
“Regional subscription rates continued to decline in 2025, reflecting constraints on banks’ capacity and willingness to buy new debt despite easier monetary conditions.
“We expect regional refinancing pressures to continue, with amortisations for Fitch‐rated CEMAC sovereigns peaking in 2026”, Fitch said.
In second half of 2024, the Chad authorities faced refinancing challenges in the regional market, with subscription rates falling significantly.
According to Fitch, the situation was mitigated through the mobilisation of concessional external funding and a private placement of local-currency securities with a regional financial institution.
Ratings analysts said they assess the refinancing challenges to have since eased, with subscription rates recovering in 1H25.
“We remain confident that the authorities can mobilise net domestic financing over the forecast horizon in 2025-2027. We also estimate that the authorities have flexibility in mobilising some external financing to address potential domestic funding shortfalls”.
The central government (CG) budget deficit narrowed to 0.1% of GDP in 2024 from 0.9% in 2023 due to stronger non-oil revenue and lower capex.
Non-oil revenue (excluding grants) increased to 7.2% of GDP from 5.7% in 2023, reflecting higher administrative revenues due to the renewal of licences for two cell phone operators – a process that occurs every 10 years.
This more than offset lower oil revenue due to technical constraints that limited production and lower international oil prices. Expenditure slightly fell to 14.3% of GDP from 14.7% in 2023 on lower capex.
As oil Prices weigh on revenue, Fitch analysts forecast the CG budget deficit to widen to 1.1% of GDP in 2025 and average 2.1% in 2026-2027.
“We expect revenue to fall to an average 12.7% of GDP over the forecast period from 14.2% due to lower oil receipts”.
Ratings analysts expect oil revenue to average 4.9% of GDP on lower international oil prices, which they anticipate will more than offset the gradual rise in output as new fields come on stream.
Chad’s non-oil revenue (excluding grants) is expected to average 6.6% of GDP over 2025-2027 with the implementation of revenue-mobilisation reforms under the IMF programme.
Fitch analysts forecast expenditure to remain broadly stable at 14.4% over 2025-2027.
Also, debt is expected to slightly increase over the forecast horizon and reach 31.0% in 2027 from 29.2% in 2024, reflecting primary deficits and moderate GDP growth.
The debt ratio remains well below the ‘B’ median of 53.1% in 2027. At end-2024, external debt represented 50% of the total debt stock from 53% in 2023, with the majority owed to official creditors and contracted on concessional terms. Commercial debt represents 7% of external debt, or 1% of and consists of one loan owed to oil trader Glencore.
Debt service payments on this loan were reprofiled under Chad’s Common Framework agreement. Fitch treats this loan as a supplier contract rather than a financing instrument. Consequently, it is not covered by Fitch Ratings default definition, although it is included in debt figures.
“We consider that weak public financial management (PFM) remains a constraint on the rating. The capacity constraints are illustrated by the emergence of external arrears to multilateral and bilateral creditors.”
Chad is a member of CEMAC. We consider the regional central bank’s commitment to the currency peg provides a strong monetary policy anchor. At end-2024, CEMAC pooled foreign-exchange (FX) reserves covered 4.7 months of imports, compared to 4.6 at end-2023. Reserves remained broadly stable as of June 2025.
In July 2025, the IMF Executive Board approved a 48-month arrangement under the Extended Credit Facility (ECF) of about USD625 million (325% of quota) to support Chad’s fiscal sustainability and balance of payments needs. While performance under previous programmes was mixed, Fitch considers that continued engagement with the IMF provides a strong policy anchor for the authorities.
Ratings analysts consider that the ongoing conflict in Sudan increases uncertainty along the border with Chad. While security spillovers have so far been contained, a significant escalation in Sudan could extend to Chad due to cross-border ethnic affinities. Fitch also expects the conflict to continue driving refugee inflow from Sudan. Lafarge Africa’s Q3 2025 Performance Fuels Price Surge
