2.8 Oil Export Revenue and
Manufacturing sector
The non-oil manufacturing sector is not as stable as the oil
industry in Chad. Chad's non-oil imports are related to energy, consumption
goods, intermediary goods and equipment. The manufacturing base in Chad is
small and is only for meeting the needs of the domestic market. It holds a
small share of 14 % of the GDP. The industries are manufacturing beverages,
materials and construction materials for the domestic market. Textile mills
have been set up for years and decades but the production has not been that
good. It hasn't been able to keep up with the import standards. The main boost
to the economy is through the oil extraction sector. The transportation and
energy sectors are very unstable and are considered as the newest industrial
ventures. There are however many constraints in these sectors. Chad is
considered as one of the poorest countries. Most of the population is poor and
there is a huge lack of resources. Basic facilities are not being provided to
the people. As a result the industrial sector is underdeveloped. One of the
reasons for this is the civil war that is still affecting the country in many
ways (Lopez-Calix &Pitigala, 2019;
Mushemeza&Okiira, 2016). Most of the manufacturing sector
is based on the agricultural sector. The manufacturing industries include
cotton ginning, textile manufacturing and sugar processing. As the oil industry
is affecting the agricultural yield. The production is becoming poor with the
passing time. The electricity supply and clean water is not easily available.
There is a lack of infrastructural development. All these from the base of the
manufacturing sector. The industries in Chad have very weak base. Their
production is not high. With the oil sector dominating the market the other
manufacturing sectors are facing negative impacts. Most of the manufacturing
sector comprises of small scale industries that are dependent on the
availability of resources. Being poor the resources are mostly not available
(Hoinathy&Janszky, 2017; Omeje, 2017). The people employed in the local
manufacturing sector are shifting towards the oil industry because of the
revenues it is generating through the exports. The wages in the oil industry
are higher. In a poor country higher wages is the most prominent attraction for
the population. This high shift towards the oil industry is affecting the
non-oil manufacturing sector. There is a lack of skilled workers and the
technology required for the manufacturing of high end products. Because of
these reasons the manufacturing sector has a negative impact due to the revenue
generated through oil exports.
2.9 Oil Export Revenue and
Agricultural Growth
As a result of being land locked the transportation costs are
high for a country like Chad. Most of the imported goods have to go through the
neighbouring countries first thus are dependent upon them. These factors have
led to the increased dependability of the Chad's economy on the oil and
agricultural industry. The oil has a 60% contribution in the export revenues
whereas the rest of the percentage is contributed by the gum arabic, livestock,
cattle, white cotton and other agricultural products. Northern half of the
country is a dessert. Due to the increased political instability and the
internal conflicts the rural population had to face multiple droughts in 1970s
and 1980s. Most of the Chad's population is young. More than half of the
population is aged 15 or below whereas the percentage of people older than 60
is only 4%. This overall population is settled in the southern part of the
country which is very well suited for agriculture. In 2015 the drop in the
international oil prices had a huge negative blow on the Chad's economy. In
such difficult time trend shifted towards agriculture. The agriculture was then
responsible for generating 40 percent of the country's GDP and formed about 80%
of the country's exports (Hoinathy&Janszky, 2017; Omeje, 2017). The
agricultural sector is currently employing about 80 percent of the country's
workforce.
In the Doba region many villages used to have a good
agricultural yield. The families used to own bikes, cars, cattle and metal roof
for their houses. Today all this is not possible in the country. The blessing
of oil which the region had is a curse now. About 4000 families have been left
to face the consequences of it. Greater than 60% of the land that was employed
for cultivation has been acquired by the ESSO Consortium for the installations
for their projects which happened to be far more than planned. Apart from
taking over the farmland they are also playing a role in reducing the living
space. Oil infrastructure and fields intermingle. There are about 1,112 wells
in the 25 villages along with the rest of the project installations.
The population is disturbed by this because the remaining size
of the fields has reduced productivity. Some villages are exactly in the middle
of the oil extractions sites. Some of the areas that were taken without
compensation include fallow land, marshes, forests and Savana. These lands were
used for farming basically before this. The activities performed in these areas
include gathering mushrooms, honey, fruits, wood, medicines, grazing, fishing
and hunting. Support has not been provided to the people who used to live off
the production from these lands (Garba et al., 2016; Miller, 2017). Farmers
are bound to keep planting the crops on the land without gap in between and
because of that the lands are now mostly exhausted after years of plantation
and thus the production has gone down. There is a restriction on the people's
mobility on their own lands. Due to the security of the oil installations the
farmers are restricted from going out at night. There are numerous cables in
the region but regardless of this the small towns and villages are deprived of
basic electricity needs and often have to live in black outs. The rural
population does not have clean drinking water. Oil extraction has destroyed the
agricultural industry and due to a corrupt government the export funds are not
being employed for the betterment and growth of the sector.
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