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Meet the African Country That Got So Broke And Took A $45m Loan from France to Pay Its Workers

Getting loans for improvement is a certain something, yet obtaining to pay your workers is an alternate thing altogether. What’s more, this is the thing that Chad, one of Africa’s poorest nations is doing.

Concurring to Eye of Africa, this African nation is getting $45m from previous frontier ace, France, to pay its laborers.

Data from French Development Agency express that a greater part of the advance will be utilized to pay December compensations of around 90,000 representatives and the rest to pay three months worth of benefits. It further shows that the advance is for “a 20-year term” with a particular financing cost.

Also, the nation is getting a $11 million advance for its wellbeing division. It is clearly a piece of an understanding between the two nations that was come to in 2017 at the National Development Program (PND), says Eye of Africa.

Photo: Alwihda Info

But how did Chad get here?

Chad is considered one of Africa’s poorest country, with the World Bank saying that “the combined effect of the 2014 drop in oil price and the weak security environment” has contributed to the country’s deep recession. Further, poverty levels are predicted to rise to 39.8% by 2019.

The country’s economy also suffered because of low foreign direct investment, and a loss of income due to cross-border trade disruption with Nigeria. An improvement in the agricultural sector did not improve matters.

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Some of the measures Chad had put in place include cutting down expenditure and drop in salaries for government workers who lost some of their bonuses and allowances as part of fiscal adjustments by the government. This led to a 5-month strike by labour unions, which affected schools and hospitals.

The country also experiences corruption and is ranked 165 out of 180 in the Corruption Perception Index by Transparency International.

“The government is perceived as largely ineffective in a context where insecurity and weak maintenance of the rule of law perpetuate systemic corruption. Major international governance indicators suggest persistent, widespread and endemic forms of corruption, permeating all sectors of Chadian society, with little evidence of progress made in anti-corruption in recent years,” says Transparency International in 2014.

Although the country has a number of resources including Uranium and gold, it scored poorly in the World Economic Forum Global competitive index (2017-2018): 135/137  and the Human Development Index, ranked 186 out of 189 countries.

Currently, Chad has borrowed money from a number of countries and international organisations including the International Monetary Fund, which resumed its loans after the country reached an agreement to restructure its more than $1 billion debt to trading giant Glencore and four banks.

World Bank recommends that Chad has to further tighten its expenditure and look for ways to raise revenues, especially now that oil prices are still low. It also needs to establish a stabilization fund, economically diversify and mitigate regional security risks to stem further economic distress.

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Written by How Africa

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