Leveraging the oil and gas sector for local economic diversification

World Bank’s Extractives-Led Local Economic Diversification (ELLED) Program.

Extractive industries are essential to the economy of Chad. The country became an oil producer in 2003 and has since relied on revenues from oil exports to support economic growth. However, various episodes of national and regional instability have hampered hopes of raising growth to faster and more sustainable levels. Although the government acted as a crucial actor in many sectors of the economy through a policy of targeted public expenditure, its interventions have not been able to promote competition and private sector growth as much as necessary.

Chad SME Competitiveness and Global Value Chain Upgrading Diagnostics with Focus on Opportunities in the Domestic and Regional Markets

In this context, the World Bank Group mandated COMPETITIVENESS to conduct a study on the modalities that could allow the growth of the country and diversify its economy from the mobilization of the oil sector, its spill-over effects and its potential synergies.

The analysis focused on identifying the opportunities and prioritizing constraints to be addressed in specific segments of the oil and gas value chain in which firms (and SMEs in particular) have the potential to grow and increase competitiveness that can be supported through policy reforms or provision of public inputs. The analysis focused on opportunities in oil and gas exploration/extraction, as well as related equipment and services provision, and transportation activities.

Analysis of the oil and gas global value chain identified three unique industry capabilities. They are core competencies that have the potential to create cross-industry linkages and spillover effects: i) advanced data management, ii) water management, and iii) shared infrastructure and logistics.

To address those cross-industry linkages that represent great opportunities for the Chadian economy, a Geospatial Analysis Pilot Project was designed with the aim of generation two main outcomes:

• Promotion of a spatial development initiative leveraging water management.
• Promotion of a spatial development initiative leveraging infrastructure-sharing and logistics-sharing.

This work will trigger the development of further interventions in the country leaded by The World Bank Group and other donors.