By Ovunc Kutlu
ISTANBUL (AA) - Fitch Ratings announced Wednesday it assigned a B- for Chad's long-term foreign-currency issuer default rating with a stable outlook.
The rating agency said the rating reflects the landlocked African country's low GDP per capita, weak governance indicators, high share of informality and significant dependence on oil.
Chad's oil production represents a third of its GDP, half of its total revenue, and two-thirds of its exports, Fitch noted.
"Mahamat Deby Itno was elected president in May 2024, after three years of transitional military rule when he was interim president, after his father's death in 2021," it said in a statement. "Elections proceeded without major disruption, and with high levels of government spending aimed at stability, we do not see near-term domestic political risks."
"We expect the new administration to maintain Chad's traditional role as a stability factor and important contributor to counter-terrorism efforts in the region, which would ensure continued strong support from the international community," it added.
Fitch said it considers the conflict in Sudan to increase uncertainty on Chad's border, warning that a protracted war in Sudan could extend to Chad due to cross-border ethnic affinities.
The agency expects Chad's economic growth slowing to 2.4% in 2024, and average 2.7% during the 2025-2026 period.
It also anticipates the country's oil sector growth significantly slowing to 0.9% in 2024, from 6.8% in 2023, but picking up to an average rate of 3.2% during the 2025-2026 period as new oil fields come onstream to boost production.