February 2024’s Chaos in Chad culminated in a self-coup, a move from within the state to seize more power. As a result, opposition leader Yaya Dillo was killed in a shootout with the government soldiers. These events have not only derailed Western hopes to bring back normalcy and democracy to the Sahel but also threaten to upend Central Africa’s already fragile energy equilibrium and end one of the continent’s most promising economic experiments at avoiding the resource curse ( a situation where the presence of valuable commodities leads to further impoverishment).
Vector map of the Sahara desert and Sahel zone
GETTY
Despite its small-scale oil production (~125k barrels per day) compared to export giants such as Saudi Arabia, Chad has exceptional potential for its oil industry to not only push crude onto the market but also incentivize local economic diversification. Chad is a latecomer to oil production, having only begun in 2003. While its unenviable landlocked and remote geography tempered expectations for generating revenue, petroleum nevertheless quickly dominated Chadian exports and came to account for a significant portion of government income.
The same difficult geography that dampened hopes paradoxically made Chad a promising case study for energy production, enabling local economic diversification. Chad’s sole oil export pipeline, the Chad-Cameroon pipeline, is a bottleneck for export with limited daily export capacity. The hope was that this would increase local energy consumption and tertiary industrial buildup.
This was successful to a limited extent. Chad’s food-processing industry grew rapidly, allowing for less costly imports, while construction materials such as cement were locally produced for the first time. Broad economic indicators attest to the successes of these initiatives: GDP per capita almost tripled, median income moved up, PPP increased, and, importantly, these increases were not reliant on the government effectively distributing oil rents but instead on organic economic growth.
None of this was accidental. The Chad-Cameroon Pipeline and energy development in Chad was consciously designed by the World Bank and a host of international aid institutions as an idealistic energy development project, preemptively mitigating all major social, environmental, and economic criticisms of oil development and learning what worked and what didn’t.
Recipient countries were limited in what they could spend the money on, budget changes had to be approved by foreign auditors, and the United Nation’s sustainable development goals were incorporated into the plan. On the project, this host of international institutions worked alongside profit-driven private companies like ExxonMobil, Chevron, and Petronas.
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Unfortunately, the idealistic project didn’t last. The governments of Chad and Cameroon began to alter the terms of the deal slowly and unilaterally, allocating more and more of the revenue towards security. By 2008, the World Bank and many donor institutions withdrew from the arrangement. By 2022, control of the Chad-Cameroon pipeline was consolidated through corporate sales into the hands of Savanah Energy LLC. In March 2023, Chad threatened nationalizing the assets and entered into a bitter dispute with the Chad-Cameroon pipeline consortium.
The experiment may have failed, but it still taught the world a lot about avoiding the resource curse. The lessons that international organizations, companies, and local governments alike learned have been studied and applied everywhere, from South Dakota to Saudi Arabia. In Chad itself, the legacy was overwhelmingly positive despite recent legal disputes, and it was hoped that the experiment could be revived. The coup dashed these hopes.
Chadian President of the Transitional Council Lt. General Mahamat Idriss Deby Itno (C) salutes as he … [+]
AFP VIA GETTY IMAGES
From 1990 to 2021, Chad was politically stable albeit poor. When in 2021 the previous leader of Chad, Idriss Déby Itno, died while personally commanding forces in battle against rebels in the north of the country, his son Mahamat Idriss Déby, took power and lead a new military junta. This junta consolidated control and delayed elections, despite promising a transition to civilian rule. When elections were finally announced, a clash between the government and the opposition resulted in the death of Yaya Dillo, the leader of the opposition. The future is now uncertain.
Had stability continued in Chad, its other resources could have been exploited in its unique geographic bubble for economic growth. Chad has unique potential for wind and solar power, amongst the highest on the globe. It’s uranium and mineral endowments could have enabled further economic growth and a global renewable energy transition. Chadian gold, vital for many industrial processes as well as jewelry, could have also been used to give the government much needed hard currency. Unfortunately, political instability has quashed all of these possibilities.
This political instability took place against the drama of grave external danger. Chad was a vital partner in the Western efforts to contain Jihadist extremism in the African Sahel. Despite its problems, it was a beacon of comparative stability relative to its neighbors in Niger, Sudan, Libya, and the Central African Republic. This stark difference not only made it a logical partner for the West but also an obstacle to Russian designs in Sub-Saharan Africa. Less than a year ago, Russia’s Wagner Group was caught red-handed in “an evolving plot to overthrow the Chadian government”.
While it is unlikely Russia had any direct hand in the latest coup, the Kremlin certainly created the environment where the coup was possible and stand to benefit from it. Chad’s supply of hydrocarbons to the global market is likely to be disrupted by these recent actions helping Russia in its energy war against the West. More importantly, the economic experiments that started in Chad but went global will indeed not be reinstated after this latest bout of instability. Russia may win but the losers are the people of Chad.