Overview
The first confirmed COVID-19 case was reported on March 19. The number of cases, contained until August, increased substantially in September. . Chadian authorities have adopted containment measures, including passenger flight suspension, closure of borders with CAR and Sudan, quarantine for nationals returning from high risk countries, closure of shops and stores (excluding basic goods), shortened banking working hours, cancellation of events and gatherings of more than 50 people, closure of worship places as well as schools and universities. This comes in addition to an inter-ministerial management committee meets daily to monitor developments, as well as the establishment of hygiene regulations in all public places. A hospital in N’Djamena was designated to receive infected cases and measures are being taken to strengthen laboratory capacities to increase testing. The curfew (11PM-05AM) was extended for an additional two weeks starting from September 14. Additionally, the state of medical emergency was extended for three months starting from July 17, giving more execution power to anti COVID-19 measures. The authorities have also limited travel from and into N’Djamena since May 8. Additionally, wearing a face mask became mandatory in public places starting May 7.
Travel Restrictions
Airports in Chad are closed.
Source : IATA Timatic
Economic Measures
Reopening of the economy. On May 18, the health crisis management committee decided to relax some of the containment measures, including reopening of: (i) restaurants and grills; (ii) stores, shops and markets. Urban public transportation resumed subject to a maximum number of passengers (4 for taxis and 10 for minibuses). On June 25: (i) classes resumed partially for elementary, middle and high schools, as well as universities and (ii) worship places reopened. Additionally, the temporary removal of restrictions on inter-urban transport was extended. Travel flights resumed on August 1st at N’Djamena airport, with four carriers (Air France, Ethiopian Airlines, Turkish Airlines and EgyptAir).
Key Policy Responses as of September 24, 2020
FISCAL
- Financing for COVID-19 health-related expenditures are estimated at CFAF 42 billion (0.8 percent of non-oil GDP), which are being implemented under a national contingency plan. Key measures include: (i) training of medical and technical staff, (ii) purchase of necessary medical equipment, (iii) construction of seven health centers in remote areas, (iv) construction of three mobile hospitals, and (v) securely managing entry points. Additionally, the capacity of Farcha Hospital in N'Djamena is going to be expanded and the hiring of additional health workers is in process. The authorities have also decided on a package of fiscal measures to help businesses weather the shock: (i) for SMEs, the authorities will, among other things, reduce by 50 percent the business license fees and the presumptive tax for 2020, (ii) tax breaks such as carryforward losses and delays in tax payments will also be examined on a case-by-case basis, (iii) clearance of domestic arears of about CFAF 110 billion owed to suppliers, (iv) a subsidy planned to the agricultural sector (0.3 percent of non-oil GDP), and (v) the simplification of the import process for food and necessity items, including health equipment, and tax exemptions for these items. Measures were also taken to alleviate the hardship on households, including (i) temporary suspension of payments of electricity and water bills for the lifeline consumption, as well as (ii) Replenishment of the national food distribution program (Office National de Sécurité Alimentaire, ONASA) (0.5 percent of non-oil GDP), (iii) the National Assembly adopted a new law on May 11 that establishes a Youth Entrepreneurship Fund (0.6 percent of non-oil GDP), (iv) payment of all death benefits due to deceased civil and military agents, indemnities and ancillary wages owed to retirees and payment of medical expenses for civilian agents and defense and security forces (0.1 percent of non-oil GDP), and (v) a solidarity fund for the vulnerable population amounting to CFAF 100 billion. The 2020 supplementary budget, which includes the COVID-19 measures, was enacted by the Parliament in August.
MONETARY AND MACRO-FINANCIAL
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On March 27, 2020, BEAC announced a set of monetary easing measures including a decrease of the policy rate by 25 bps to 3.25 percent, a decrease of the Marginal Lending Facility rate by 100 bps to 5 percent, a suspension of absorption operations, an increase of liquidity provision from FCFA 240 to 500 billion, and a widening of the range of private instruments accepted as collateral in monetary operations. The MPC also supported BEAC’s management’s intent to propose to reduce haircuts applicable to private instruments accepted as collateral for refinancing operations, and to postpone by one-year principal repayment of consolidated central bank’s credits to member states, but these possible additional measures are not effective yet. Further, at its July 22, 2020, extraordinary Monetary Policy Committee (MPC) meeting the BEAC announced a new program of government securities purchases for the next 6 months. The purchase program is meant as a safety net, to ensure full cover of government securities issuances during the second half of 2020, while being consistent with BEAC Charter which prohibits direct monetary financing. The program will be based on revised securities issuance plans for each country, consistent with the latest revised budget laws and the budget financing frameworks agreed under the IMF programs. The BEAC also decided to resume liquidity injections with longer maturity, of up to one year.
On March 25, 2020, the COBAC informed banks that they can use their capital conservation buffers of 2.5 percent to absorb pandemic-related losses but requested banks to adopt a restrictive policy with regards to dividend distribution.
EXCHANGE RATE AND BALANCE OF PAYMENTS
Civic Freedom Tracker
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