In 1995, Socatel introduced the CAR’s first mobile network basedon the AMPS system called Caratel. In 1996, Socatel partneredwith FCR and various local partners to establish a mobile andvalue-added service company called Telecom Plus, whichprovides data communications services (X.25), internet accessand mobile services using GSM technology. Socatel remains thecountry’s leading telecommunications and internet serviceprovider.The third network is operated by Telecel Centrafrique and usesAMPS Technology and was launched in 1996. I-Com <strong>Africa</strong>, anAmerican company, has received a licence to operate a mobilenetwork.In terms of wider accessibility, Groupe Spécial Mobile (GSM)coverage was, until 2005, only limited to the capital city ofBangui, but has since then expanded as far as Berberati in thewestern CAR. At present, there are two GSM-900 mobileoperators, Telecel CAR and Nationlink Telecom RCA.A private telecommunications company now runs a domesticInternet and e-mail service. Few Central <strong>Africa</strong>ns have homeaccess to such services, but many urban dwellers obtain limitedaccess at cyber cafés.Key Industry SectorsImportant constraints to economic development include theCAR’s landlocked position, a poor transportation system, alargely unskilled work force, and a legacy of misdirectedmacroeconomic policies. Factional fighting between theGovernment and its opponents remains a drag on economicrevitalisation. Distribution of income is extraordinarily unequal.Trade and IndustryIndustry primarily consists of diamond mining, breweries andsawmills. Even though there is a strong interest in Americangoods, US exporters face tough competition from France withwhich the CAR has maintained strong commercial ties.Importers of consumer items and personal vehicles haveexpressed an interest in US goods, but logistical problems tendto impede sales and distribution. The US, Japan and Iran aresignificant suppliers of products such as processed foods,pharmaceuticals, consumer goods, industrial products, vehicles,and petroleum products. Other important trading partners areCanada and Italy.CAR relies heavily on its exports, of which the most importantare timber, diamonds, cotton, and coffee. Belgium is thecountry’s leading trading partner, buying most of its diamondexports. France is also an important partner, purchasing most ofthe coffee and tobacco produced. Imports include foodstuffs,chemicals, machinery, transport equipment and petroleum.Information and Communications TechnologyAlthough information and technology usage in the CAR is stillone of the lowest in the world, the presence of multiple mobilecellularservice providers has created a fairly competitiveatmosphere. Most fixed-line and mobile-cellular telephoneservices are concentrated in Bangui, and the network consistsprincipally of microwave radio relay and low-capacity, lowpoweredradiotelephone communication.MiningCAR has rich but largely unexploited natural resources in theform of diamonds, gold, uranium and other minerals. There maybe oil deposits along the country’s northern border with Chad.Diamonds are the only one of these mineral resources currentlybeing developed and in 2002, diamond exports made up close to50% of the CAR’s export earnings. Mining largely involves alluvialdiamonds and gold, together contributing about 4% of thenation’s gross domestic product.About 80 000 autonomous artisanal miners form the base forthe mining activity in the country. Mining companies, in order tooptimise their investment, often let such miners exploit largepieces of land within their properties. The artisanal miners selltheir production to about 160 certified collecting agents who, inturn, sell this production to two purchasing offices located inBangui.The CAR's iron ore potential could soon be realised followingannouncements by Asquith Resources over the discovery of apotentially massive high grade lumo iron deposit on its Bambaripermit. Initial grab samples have yielded iron contents in excessof 66% iron, with low trace elements.Lack of infrastructure coupled with the fact that the country islandlocked has hindered development. The CAR hasapproximately 400 000 km2 of highly prospective Precambrianterrane that has not yet been explored properly.AgricultureThe agricultural sector contributes more than half of the grossdomestic product (GDP) and employs an estimated 80% of thelabour force. Key primary food crops include bananas, cocoabeans, coffee and sugar cane. Meat products range from beef,chicken, goat meat and mutton to pork. The CAR is almost selfsufficientin food and has the potential of becoming a netexporter. Export crops are cotton, coffee, cattle and tobacco.Most Central <strong>Africa</strong>ns rely on farming for their livelihoodsgrowing cassava (manioc), corn(maize), millet, s<strong>org</strong>hum, rice,squashes and peanuts (groundnuts) for their own consumption.Cash crops such as cotton and coffee, introduced by Frenchplantation owners, are produced largely on small landholdings.Agricultural diversification and vegetable exports have beenencouraged by the Government. Although Central <strong>Africa</strong>ns havefor some time cultivated sugarcane and oil palms on a smallscale, the country has lately undertaken efforts to grow bothcrops on large, mechanized plantations.Tropical rainforest covers a significant part of the Central <strong>Africa</strong>nRepublic, mainly in the southwest, and timber exports are a vitalsource of foreign exchange. Heavy reliance on internationalcommodities markets, however, has rendered the country’seconomy extremely vulnerable to price fluctuations.Labour RelationsCAR is one of the poorest countries in the world and itspopulation is largely unskilled. The labour law has not beenupdated for some time and dates back to 1961.21
CHADJOHN FFOOKS & CO PROJECT FINANCE AND NATURALRESOURCES ADVISORY FIRMFirm InformationWebsite address: www.jwflegal.comLanguages spoken: English, Malagasy, FrenchContacts: John Ffooks and Richard GlassTelephone: +261 20 224 3247Fax: +261 20 224 3248Email: chad@jwflegal.comCountry InformationChad is a landlocked country in north central <strong>Africa</strong> measuring1 284 634 square kilometres (roughly three times the size ofCalifornia). It is bordered by Libya, Sudan, the Central <strong>Africa</strong>nRepublic, Niger, Cameroon and Nigeria. Most of its ethnicallyand linguistically diverse population lives in the south. Thecapital city of N’Djamena, situated at the confluence of the Chariand Logone Rivers has a population of about one million.Chad has a population of 11 274 106 divided between 200distinct groups. It is estimated to be growing at an annual rate of2.6%. More than half the population (55%) is Muslim, the rest isdivided between Christianity (35%) and animist (10%). 43% ofthe population is over the age of 18. Women represent 53% ofthe total population. The official languages are French andArabic. The urban population is 27% of the total population(2008) and the rate of urbanization is 4.7% (2005-10 estimate).The population of N’Djamena is 828 000 (2010 estimate). Thelanguages are French and Arabic (official), Sara (in the south),Sango and more than 120 indigenous Chadian languages anddialects. There are 200 distinct ethnic groups. Approximately1 000 French citizens live in Chad. About 80% of the Chadianpopulation is rural. The currency is FCFA.Natural resources: Petroleum, natron (sodium carbonate),kaolin, gold, bauxite, tin, tungsten, titanium and iron ore.Political SystemChad is divided into 22 administrative regions. A strongexecutive branch headed by the president dominates theChadian political system. The president has the power to appointthe prime minister and the Council of State (or cabinet), andexercises considerable influence over appointments of judges,generals, provincial officials and heads of Chad’s parastatal firms(owned or controlled wholly or partly by the government).According to the 1996 Constitution, National Assembly deputies(unicameral) are elected by universal suffrage for 4-year terms.Despite the Constitution’s guarantee of judicial independencefrom the executive branch, the presidentnames most key judicial officials. TheSupreme Court comprises a chief justice,named by the president, and 15 councillorschosen by the president and NationalAssembly. Appointments are for life.22Latest GDP FiguresGDP: US$8.6 billionGDP per capita: US$837GDP (PPP): US$17.36 billionGDP per capita (PPP): US$1 921.Inflation Rate (2011)3%.Investment ClimateThere are no restrictions on foreign investments in Chad. Foreigninvestors are afforded the same treatment as domestic ones.Foreign direct investment represents more than half the totalcapital invested in Chadian firms. France leads the way with anestimated 50% to 60% of the total. Other sources of foreigninvestment include Italy, Taiwan, the US, Japan, Saudi Arabia,Libya, the United Kingdom, South Korea, the Netherlands, Egyptand Sudan. In 2004 a consortium including Chevron, Exxon Mobiland Malaysia’s Petronas completed a pipeline from the Dobabasin to the coast of Cameroon.There has been instability in the form of internal rebellions andconflict with neighbouring Sudan.Forms of BusinessThe Organisation pour l’Harmonisation en Afrique du Droit desAffaires (OHADA) has a Uniform Act on Companies which setsout various forms of businesses available to domestic andforeign investors, such as a société en nom collectif (generalpartnership), a société en commandite simple (limitedpartnership), a groupement d’interêt économique (economicinterest grouping), a société à responsabilité limitée (limitedliability company) and a société anonyme (specific limitedliability company).The following are the most attractive for investors:a société anonyme (SA) is a limited liability company witheither a board of directors or a unique shareholder. Theminimum share capital required is at least CFA 10 000 000(approx. US$21 000). Share transfers to third parties areunrestricted unless otherwise stated by the company’sstatutes which may require either the consent of the boardof directors or of the general assembly of shareholders;a société à responsabilité limitée (SARL) is administered byone or more directors called ”gérants”. The minimum sharecapital required is at least CFA1 000 000 (approx.US$2 100). Share transfers are regulated by the companystatutes. This may be performed freely betweenshareholders but share transfers to third parties require theprior consent of the majority of shareholders;Joint ventures are also performed in the oil sector.Formation of a CompanyBelow are the required procedures and costs (if any) needed toincorporate a company in Chad:opening a bank account, investing capital and receiving theevidence of deposit;checking the company’s name and collecting theregistration form of the company;notarization of the Articles of Association and CompanyDeeds;obtaining a medical certificate (charges FCFA1 200 percopy);providing a background criminal record check (chargesFCFA1 500);registering a certified and signed copy of the company