INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND CHAD JOINT WORLD BANK-IMF DEBT SUSTAINABILITY ANALYSIS July 2020 Prepared jointly by the staffs of the International Development Association (IDA) and the International Monetary Fund (IMF) Approved by Marcello Estevão (IDA) David Owen and Gavin Gray (IMF) Chad: Joint Bank-Fund Debt Sustainability Analysis1 Risk of external debt distress High2 Overall risk of debt distress High Granularity in the risk rating Sustainable Application of judgement No Macroeconomic projections The previous DSA in April 2020 reflected reduced growth and significant deterioration in fiscal and external balances. The current DSA reflects a further downward revision to growth of 0.7 percentage point in 2020, with a deterioration of 2.3 percentage points in fiscal and 0.9 percentage points in external balances. The shock is still expected to be temporary and a gradual recovery is forecast in 2021. Financing strategy Since the last DSA, Chad has identified significant donor support for 2020 and oil revenue has surprised on the upside. The authorities are expected to request a successor IMF arrangement later this year. Realism tools flagged Large unexpected increase in public debt in the last 5 years. Mechanical risk rating under the external High DSA Mechanical risk rating under the public High DSA 1 The debt coverage has expanded since the last DSA (April 2020) to include domestic arrears in the domestic debt stock (5.8 percent of GDP). Previously domestic arrears only appeared in the contingent risk analysis. Accordingly, “other elements of general government” in the contingent liability tailored test has been reduced to zero 2 With a score of 2.47, Chad’s composite indicator, which is based on the October 2019 WEO and the 2018 CPIA, signals a weak debt-carrying capacity. This debt sustainability analysis (DSA) updates the joint World Bank-IMF analysis of April 2020 to reflect the most recent outlook. Debt remains sustainable under the baseline forecast, but uncertainty remains high. For instance, the outlook includes large unfinanced fiscal and external financing gaps for several years. Historically the authorities have been able to service debt at baseline forecast levels, and program performance under the ECF suggests a strong commitment to obligations. In sum, the debt sustainability picture has not appreciably changed since April. Chad’s risks of external and overall debt distress remain high. The macroeconomic outlook has deteriorated with the pandemic’s more pronounced presence in Chad. In 2020, growth is modestly weaker, but Q1 oil revenues—which are based on 2019 oil exports—have surprised to the upside and donor support has crystalized. In particular, the World Bank i) disbursed (US$ 16.95 million) to prevent, detect, and respond to health threat posed by COVID-19; ii) is preparing a COVID-19 education project; and iii) is preparing a Development Policy Operation in response to the short and long term challenges faced by the country. In the medium term, oil price forecasts have changed very little since the last DSA. The debt sustainability analysis is based on projected continued fiscal prudence and an increase in non-oil revenues after the pandemic crisis abates The RCF request comprises the only substantial change on the external debt side. Chad requested treatment under the Debt Service Suspension Initiative (DSSI) from all creditors, public and private, and intends to adhere to the commitments noted in the LOI. The DSA assumes all official bilateral creditors from the G-20 and Paris Club, plus Kuwait and the UAE, will provide debt reprofiling in 2020, totaling CFAF 7.5 billion. The authorities have begun clearing arrears in accordance with the government clearance strategy adopted in January. Clearance in 2020 may be financed through a CFAF 85 billion, 8-year loan arrangement with banks and (ii) a series of 3- to 5-year treasury bonds amounting to CFAF 25 billion. Thereafter the DSA assumes cash payment of arrears. Finally, this assessment assumes debt relief from the IMF of CFAF 8.2 billion across 2020 and 2021 under the Catastrophe Containment window of the CCRT through April 2022 (subject to the availability of CCRT resources for the next 18 months). Under the baseline, three of the external debt sustainability indicators stay below their respective thresholds, but the debt-to-revenue ratio breaches its threshold from 2021 through 2027. Under stress scenarios—in particular the customized oil price shock and the exports shock—indicators approach levels seen during Chad’s last episode of debt distress. Total public debt vulnerabilities are elevated, and under the baseline the pandemic pushes the present value (PV) of public debt- to-GDP ratio above its benchmark from 2020 to 2024. Following the restructuring in 2018, the new Glencore debt contract contingencies have allowed lower debt service to cushion low oil prices and should provide additional cushion through 2023 under the baseline, with additional cushion capacity remaining. 1 However, the contingency mechanisms could become exhausted in 2021 under the conditions of the customized oil price shock stress test, which would likely lead to a sharp rise in Chad’s debt service-to-revenue ratio, potentially pushing the country back in a situation of debt distress. 1 Under the Glencore debt restructuring agreement, for the period 2021-2026 mandatory amortization could be deferred up to US$75 million mainly if (i) government oil export receipts are lower than Glencore debt service, and (ii) oil prices are lower than US$42 per barrel. 2 Figure 1. Chad: Indicators of Public and Publicly Guaranteed External Debt under Alternative Scenarios, 2020–2030 / PV of debt-to GDP ratio PV of debt-to-exports ratio 50 300 45 250 40 35 200 30 25 150 20 15 100 10 50 5 Most extreme shock is Exports Most extreme shock is Exports 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Debt service-to-exports ratio Debt service-to-revenue ratio 20 30 18 25 16 14 20 12 10 15 8 10 6 4 5 2 Most extreme shock is Exports Most extreme shock is Commodity price 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Historical scenario Most extreme shock 1/ Threshold Customization of Default Settings Borrowing Assumptions for Stress Tests* Size Interactions Default User defined Shares of marginal debt No No External PPG MLT debt 100% Tailored Tests Terms of marginal debt Combined CLs Yes Avg. nominal interest rate on new borrowing in USD 1.0% 1.0% Natural Disasters n.a. n.a. USD Discount rate 5.0% 5.0% Commodity Prices 2/ No No Avg. maturity (incl. grace period) 17 20 Market Financing n.a. n.a. Avg. grace period 8 6 Note: "Yes" indicates any change to the size or * Note: All the additional financing needs generated by the shocks under the stress tests are assumed interactions of the default settings for the stress tests. to be covered by PPG external MLT debt in the external DSA. Default terms of marginal debt are "n.a." indicates that the stress test does not apply. based on baseline 10-year projections. Sources: Country authorities; and staff estimates and projections. 1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. Stress tests with one-off breaches are also presented (if any), while these one-off breaches are deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented. 2/ The magnitude of shocks used for the commodity price shock stress test are based on the commodity prices outlook prepared by the IMF research department. The tailored commodity price stress test presented here does not account for the contingency mechanisms in the Glencore debt as Text Figure 1 does. 3 Figure 2. Chad: Indicators of Public Debt Under Alternative Scenarios, 2020–2030 PV of Debt-to-GDP Ratio 100 90 80 70 60 50 40 30 Most extreme shock is Growth 20 10 0 2020 2022 2024 2026 2028 2030 PV of Debt-to-Revenue Ratio Debt Service-to-Revenue Ratio 700 100 90 600 80 500 70 60 400 50 300 40 200 30 20 100 Most extreme shock is Commodity price Most extreme shock is Commodity price 10 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Most extreme shock 1/ Public debt benchmark Historical scenario Borrowing Assumptions for Stress Tests* Default User defined Shares of marginal debt External PPG medium and long-term 35% 65% Domestic medium and long-term 10% 5% Domestic short-term 109% 30% Terms of marginal debt External MLT debt Avg. nominal interest rate on new borrowing in USD 1.0% 1.0% Avg. maturity (incl. grace period) 17 20 Avg. grace period 8 6 Domestic MLT debt Avg. real interest rate on new borrowing 9.3% 5.0% Avg. maturity (incl. grace period) 1 1 Avg. grace period 0 0 Domestic short-term debt Avg. real interest rate 0% 2.0% * Note: The public DSA allows for domestic financing to cover the additional financing needs generated by the shocks under the stress tests in the public DSA. Default terms of marginal debt are based on baseline 10-year projections. Sources: Country authorities; and staff estimates and projections. 1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented. 4 Figure 3. Chad: Drivers of Debt Dynamics—Baseline Scenario External debt Gross Nominal PPG External Debt Debt-creating flows Unexpected Changes in Debt 1/ (in percent of GDP; DSA vintages) (percent of GDP) (past 5 years, percent of GDP) Current DSA 40 80 Residual 25 Previous DSA 30 70 DSA-2015 20 Interquartile range Price and 20 (25-75) 60 exchange rate 15 proj. 10 50 10 Real GDP growth 0 Change in PPG 40 debt 3/ 5 -10 30 Nominal interest rate 0 -20 20 -5 Median Current -30 10 account + FDI -10 0 -40 Contribution of Distribution across LICs 2/ Change in PPG 5-year 5-year -15 unexpected debt 3/ historical projected changes change change Public debt Gross Nominal Public Debt Debt-creating flows Unexpected Changes in Debt 1/ (in percent of GDP; DSA vintages) (percent of GDP) (past 5 years, percent of GDP) Current DSA Residual 20 Previous DSA 50 DSA-2015 Interquartile range 80 Other debt 40 (25-75) 70 creating flows 10 proj. 30 60 Real Exchange rate depreciation 50 0 20 Real GDP growth Change in debt 40 10 30 Real interest rate -10 0 20 10 Primary deficit -10 -20 Median 0 5-year 5-year -20 Change in debt Contribution of unexpected Distribution across LICs 2/ 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 historical projected changes -30 change change 1/ Difference between anticipated and actual contributions on debt ratios. 2/ Distribution across LICs for which LIC DSAs were produced. 3/ Given the relatively low private external debt for average low-income countries, a ppt change in PPG external debt should be largely explained by the drivers of the external debt dynamics equation. 5 Figure 4. Chad: Realism Tools 3-Year Adjustment in Primary Balance Fiscal Adjustment and Possible Growth Paths 1/ (Percentage points of GDP) 8 0 14 Distribution 1/ 6 12 Projected 3-yr adjustment 3-year PB adjustment greater than 2.5 4 In percentage points of GDP percentage points of GDP in approx. top 10 quartile 2 In percent 8 0 -1 6 -2 4 -4 2 -6 -8 -2 0 2014 2015 2016 2017 2018 2019 2020 2021 Baseline Multiplier = 0.2 Multiplier = 0.4 Multiplier = 0.6 Multiplier = 0.8 1/ Data cover Fund-supported programs for LICs (excluding emergency financing) approved since 1990. The size of 3- 1/ Bars refer to annual projected fiscal adjustment (right-hand side scale) and lines show possible real GDP year adjustment from program inception is found on the horizontal axis; the percent of sample is found on the vertical growth paths under different fiscal multipliers (left-hand side scale). axis. Public and Private Investment Rates Contribution to Real GDP growth (% of GDP) (percent, 5-year average) 40 6 38 36 5 34 32 4 30 28 3 26 24 22 2 20 18 1 16 14 0 12 10 -1 8 6 -2 4 2 -3 0 Historical Projected (Prev. DSA) Projected (Curr. DSA) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Gov. Invest. - Prev. DSA Gov. Invest. - Current DSA Contribution of other factors Priv. Invest. - Prev. DSA Priv. Invest. - Current DSA Contribution of government capital 6 Table 1. Chad: External Debt Sustainability Framework, Baseline Scenario, 2009–2040 (In percent of GDP, unless otherwise indicated) Actual Projections Average 8/ 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2040 Historical Projections External debt (nominal) 1/ 26.1 24.6 21.8 20.0 21.1 29.1 25.5 26.8 25.6 25.8 24.6 31.5 34.4 34.5 33.6 33.1 30.5 20.3 10.5 24.5 28.5 Definition of external/domestic debt Currency-based of which: public and publicly guaranteed (PPG) 26.1 24.6 21.8 20.0 21.1 29.1 25.5 26.8 25.6 25.8 24.6 31.5 34.4 34.5 33.6 33.1 30.5 20.3 10.5 24.5 28.5 Is there a material difference between the Yes two criteria? Change in external debt ... -1.5 -2.8 -1.7 1.1 8.0 -3.7 1.4 -1.3 0.2 -1.3 7.0 2.9 0.1 -0.9 -0.6 -2.5 -1.2 0.5 Identified net debt-creating flows ... 0.0 -1.7 2.7 4.2 2.2 16.8 9.9 3.8 -3.8 0.8 10.0 5.1 3.3 3.6 3.3 2.1 0.9 5.1 3.5 2.8 Non-interest current account deficit 8.0 8.4 5.4 7.1 8.5 8.2 12.6 8.7 6.0 0.7 4.2 13.6 11.0 8.9 8.8 8.5 7.4 2.2 5.9 7.0 6.5 Deficit in balance of goods and services 11.5 10.8 7.5 9.8 9.6 12.5 16.5 16.2 15.2 8.7 9.7 20.2 17.0 14.4 13.7 12.8 11.7 6.7 9.3 11.6 11.6 Debt Accumulation Exports 35.2 37.8 40.6 38.2 33.4 31.5 26.4 22.9 26.5 33.3 34.7 26.2 28.6 30.5 31.4 32.0 32.3 30.9 17.6 8.0 40 Imports 46.8 48.6 48.1 48.0 43.1 43.9 42.9 39.1 41.7 42.0 44.3 46.4 45.7 44.9 45.2 44.8 44.1 37.6 27.0 7.0 Net current transfers (negative = inflow) -7.5 -5.6 -4.3 -4.4 -5.1 -7.9 -7.1 -7.6 -9.4 -8.9 -7.4 -9.6 -8.8 -8.3 -7.7 -7.1 -7.2 -5.4 -4.1 -6.8 -7.2 35 6.0 of which: official -0.6 -0.3 -0.3 -0.7 -1.3 -4.0 -2.5 -2.4 -3.1 -3.2 -1.3 -3.1 -2.6 -2.5 -2.3 -1.8 -2.1 -1.3 -1.2 5.0 30 Other current account flows (negative = net inflow) 3.9 3.2 2.2 1.7 3.9 3.6 3.2 0.1 0.3 0.9 2.0 3.0 2.7 2.8 2.8 2.8 2.8 0.9 0.6 2.1 2.0 Net FDI (negative = inflow) -6.5 -5.2 -4.5 -4.7 -4.0 -5.2 -5.1 -2.4 -3.6 -3.0 -4.3 -4.3 -4.7 -4.7 -4.5 -4.6 -4.5 -0.9 -0.6 -4.2 -3.2 4.0 25 Endogenous debt dynamics 2/ ... -3.2 -2.6 0.3 -0.3 -0.8 9.3 3.6 1.4 -1.6 0.9 0.7 -1.2 -0.9 -0.7 -0.7 -0.8 -0.4 -0.2 3.0 Contribution from nominal interest rate ... 0.2 0.4 0.7 0.6 0.7 1.1 1.7 1.0 0.6 0.7 0.5 0.6 0.6 0.6 0.5 0.4 0.2 0.1 20 2.0 Contribution from real GDP growth ... -3.1 0.0 -1.9 -1.1 -1.4 -0.7 1.5 0.6 -0.5 -0.8 0.2 -1.8 -1.6 -1.3 -1.2 -1.2 -0.6 -0.3 Contribution from price and exchange rate changes ... -0.3 -3.0 1.5 0.2 -0.2 8.8 0.4 -0.3 -1.7 1.0 … … … … … … … … 1.0 15 Residual 3/ ... -1.4 -1.1 -4.5 -3.1 5.8 -20.4 -8.5 -5.1 4.1 -2.0 -3.1 -2.2 -3.2 -4.5 -3.8 -4.6 -2.1 -4.6 -3.6 -3.2 0.0 10 of which: exceptional financing ... 0.0 0.0 0.0 0.0 -0.1 -0.8 -1.1 -1.0 -1.3 -1.6 -0.4 -0.4 -0.4 -0.4 -0.3 -0.3 -0.2 -0.1 -1.0 -2.0 5 Sustainability indicators 2020 2022 2024 2026 2028 2030 PV of PPG external debt-to-GDP ratio ... ... ... ... ... ... ... ... ... ... 20.7 26.0 27.3 26.9 25.9 25.2 23.5 15.4 7.6 PV of PPG external debt-to-exports ratio ... ... ... ... ... ... ... ... ... ... 59.7 99.2 95.4 88.0 82.5 78.8 72.6 50.0 43.2 Rate of Debt Accumulation PPG debt service-to-exports ratio 2.0 1.5 2.2 3.2 3.9 15.6 9.6 14.4 9.0 6.1 4.0 6.0 7.1 7.7 7.7 7.5 6.8 4.3 4.4 Grant-equivalent financing (% of GDP) PPG debt service-to-revenue ratio 5.7 3.1 3.9 5.7 7.1 31.0 24.0 34.5 22.4 16.9 10.9 11.5 18.0 18.3 17.0 17.7 15.8 7.7 4.7 Grant element of new borrowing (% right scale) Gross external financing need (Million of U.S. dollars) ... ... ... ... 755.2 1114.1 1101.1 980.4 486.4 -25.0 137.6 1101.8 916.6 784.8 861.5 871.1 742.8 525.6 2242.2 Key macroeconomic assumptions External debt (nominal) 1/ Real GDP growth (in percent) 4.1 13.6 0.1 8.8 5.8 6.9 1.8 -5.6 -2.4 2.3 3.0 -0.8 6.1 4.9 4.0 3.8 3.8 3.0 3.2 3.4 3.6 GDP deflator in US dollar terms (change in percent) -14.2 1.1 13.7 -6.4 -1.0 0.8 -23.2 -1.4 1.2 7.0 -3.8 -6.9 3.0 3.3 3.2 3.1 3.1 2.9 3.2 -1.2 2.1 of which: Private of which: public and publicly guaranteed (PPG) 40 Effective interest rate (percent) 4/ ... 0.7 1.8 3.3 3.4 3.7 3.1 6.2 3.8 2.8 2.6 1.9 2.0 2.0 1.8 1.7 1.2 1.0 1.0 3.1 1.8 Growth of exports of G&S (US dollar terms, in percent) -26.0 23.2 22.3 -4.1 -8.4 1.4 -34.4 -19.2 14.5 37.6 3.1 -30.2 19.3 15.7 10.5 8.9 8.2 2.5 1.7 3.6 5.5 35 Growth of imports of G&S (US dollar terms, in percent) 2.2 19.4 12.7 1.6 -6.0 9.9 -23.7 -15.1 5.4 10.3 4.5 -3.3 7.5 6.6 8.0 6.2 5.3 2.4 4.3 1.9 4.3 Grant element of new public sector borrowing (in percent) ... ... ... ... ... ... ... ... ... ... 36.2 37.6 37.6 37.6 37.6 37.7 37.8 37.8 ... 37.5 30 Government revenues (excluding grants, in percent of GDP) 12.3 18.9 23.2 21.7 18.5 15.8 10.5 9.5 10.6 12.0 12.6 13.7 11.4 12.7 14.2 13.6 13.8 17.1 16.6 15.3 14.4 25 Aid flows (in Million of US dollars) 5/ 350.8 263.4 279.6 477.1 377.5 369.1 433.3 326.8 527.7 511.9 303.8 834.0 1059.8 877.5 811.2 878.9 680.8 683.2 1177.2 Grant-equivalent financing (in percent of GDP) 6/ ... ... ... ... ... ... ... ... ... ... ... 7.1 6.4 5.3 4.8 4.8 4.0 2.9 2.4 ... 4.4 20 Grant-equivalent financing (in percent of external financing) 6/ ... ... ... ... ... ... ... ... ... ... ... 63.6 59.7 65.7 70.3 69.0 80.9 81.0 68.9 ... 74.7 15 Nominal GDP (Million of US dollars) 9,315 10,701 12,183 12,411 12,994 14,003 10,952 10,202 10,079 11,036 10,934 10,097 11,035 11,964 12,840 13,746 14,720 20,328 36,997 Nominal dollar GDP growth ... 14.9 13.8 1.9 4.7 7.8 -21.8 -6.8 -1.2 9.5 -0.9 -7.7 9.3 8.4 7.3 7.1 7.1 6.0 6.5 2.2 5.9 10 5 Memorandum items: PV of external debt 7/ ... ... ... ... ... ... ... ... ... ... 20.7 26.0 27.3 26.9 25.9 25.2 23.5 15.4 7.6 0 In percent of exports ... ... ... ... ... ... ... ... ... ... 59.7 99.2 95.4 88.0 82.5 78.8 72.6 50.0 43.2 2020 2022 2024 2026 2028 2030 Total external debt service-to-exports ratio 2.0 1.5 2.2 3.2 3.9 15.6 9.6 14.4 9.0 6.1 4.0 6.0 7.1 7.7 7.7 7.5 6.8 4.3 4.4 PV of PPG external debt (in Million of US dollars) 2265.7 2626.9 3011.3 3214.6 3329.0 3463.8 3453.7 3136.9 2818.4 (PVt-PVt-1)/GDPt-1 (in percent) 3.3 3.8 1.8 1.0 1.0 -0.1 0.1 0.7 Non-interest current account deficit that stabilizes debt ratio ... 9.8 8.3 8.8 7.4 0.2 16.3 7.4 7.3 0.5 5.5 6.6 8.1 8.8 9.8 9.1 9.9 3.4 5.4 Sources: Country authorities; and staff estimates and projections. 1/ Includes both public and private sector external debt. 2/ Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = growth rate of GDP deflator in U.S. dollar terms. 3/ Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes. 4/ Current-year interest payments divided by previous period debt stock. 5/ Defined as grants, concessional loans, and debt relief. 6/ Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt). 7/ Assumes that PV of private sector debt is equivalent to its face value. 8/ Historical averages are generally derived over the past 10 years, subject to data availability, whereas projections averages are over the first year of projection and the next 10 years. 7 Table 2. Chad: Public Sector Debt Sustainability Framework, Baseline Scenario, 2017–2040 (In percent of GDP, unless otherwise indicated) 8 Table 3. Chad: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2020–2030 (In percent) Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PV of debt-to GDP ratio Baseline 26.0 27.3 26.9 25.9 25.2 23.5 21.0 18.7 17.2 16.2 15.4 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 2/ 26.0 26.8 27.0 26.3 25.9 25.1 25.1 24.5 24.7 25.6 26.7 B. Bound Tests B1. Real GDP growth 26.0 31.1 34.2 33.0 32.1 29.9 26.8 23.8 21.9 20.7 19.7 B2. Primary balance 26.0 27.9 28.1 26.5 25.0 22.6 19.7 17.1 15.4 14.2 13.2 B3. Exports 26.0 34.0 44.7 43.2 42.1 39.8 36.8 34.0 31.8 29.3 27.2 B4. Other flows 3/ 26.0 30.6 33.0 31.9 31.0 29.1 26.5 24.1 22.3 20.7 19.5 B6. One-time 30 percent nominal depreciation 26.0 34.3 29.7 28.7 27.8 25.8 22.8 19.9 18.2 17.3 16.6 B6. Combination of B1-B5 26.0 39.3 41.9 40.5 39.4 37.1 33.9 30.8 28.3 26.3 24.6 C. Tailored Tests C1. Combined contingent liabilities 26.0 26.9 25.7 23.8 22.2 19.8 17.0 14.4 12.7 11.6 10.7 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 26.0 31.2 34.5 33.5 32.4 30.1 27.0 24.0 21.6 19.6 18.0 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 30 30 30 30 30 30 30 30 30 30 30 PV of debt-to-exports ratio Baseline 99.2 95.4 88.0 82.5 78.8 72.6 63.4 57.1 53.3 50.8 50.0 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 2/ 99.2 93.7 88.4 83.6 80.9 77.7 75.6 74.9 76.4 80.2 86.5 B. Bound Tests B1. Real GDP growth 99.2 95.4 88.0 82.5 78.8 72.6 63.4 57.1 53.3 50.8 50.0 B2. Primary balance 99.2 97.5 91.9 84.4 78.1 69.8 59.4 52.2 47.6 44.4 42.8 B3. Exports 99.2 166.7 281.1 264.2 252.7 237.0 213.5 200.1 189.1 176.6 169.5 B4. Other flows 3/ 99.2 106.8 108.0 101.3 96.9 90.1 80.0 73.6 68.9 65.0 63.1 B6. One-time 30 percent nominal depreciation 99.2 95.4 77.5 72.6 69.3 63.5 54.7 48.5 44.7 43.1 42.8 B6. Combination of B1-B5 99.2 154.4 112.3 168.7 161.3 150.3 133.8 123.5 114.6 107.9 104.5 C. Tailored Tests C1. Combined contingent liabilities 99.2 93.9 84.3 75.7 69.3 61.1 51.2 44.0 39.4 36.4 34.6 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 99.2 131.7 130.5 118.9 109.8 98.2 83.5 75.1 68.7 63.1 59.7 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 140 140 140 140 140 140 140 140 140 140 140 Debt service-to-exports ratio Baseline 6.0 7.1 7.7 7.7 7.5 6.8 7.8 8.2 5.7 4.4 4.3 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 2/ 6.0 7.6 8.6 9.0 9.2 8.6 10.5 11.6 7.8 5.7 5.6 B. Bound Tests B1. Real GDP growth 6.0 7.1 7.7 7.7 7.5 6.8 7.8 8.2 5.7 4.4 4.3 B2. Primary balance 6.0 7.1 7.7 7.7 7.5 6.7 7.7 8.0 5.7 4.4 4.2 B3. Exports 6.0 10.4 16.2 17.1 16.7 15.1 17.1 17.8 15.2 16.8 16.4 B4. Other flows 3/ 6.0 7.1 7.8 7.9 7.8 7.0 8.0 8.4 6.6 5.9 5.8 B6. One-time 30 percent nominal depreciation 6.0 7.1 7.7 7.5 7.4 6.6 7.7 8.1 5.6 3.5 3.5 B6. Combination of B1-B5 6.0 9.2 12.8 12.8 12.5 11.3 12.9 13.5 12.0 9.9 9.7 C. Tailored Tests C1. Combined contingent liabilities 6.0 7.1 7.6 7.6 7.4 6.6 7.6 8.0 5.5 4.2 4.1 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 6.0 8.8 9.4 9.4 9.0 7.9 8.9 9.3 7.3 6.5 6.3 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 10 10 10 10 10 10 10 10 10 10 10 Debt service-to-revenue ratio Baseline 11.5 18.0 18.3 17.0 17.7 15.8 17.7 17.4 12.0 8.3 7.7 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 2/ 11.5 19.2 20.5 19.9 21.6 20.1 23.7 24.7 16.2 11.0 10.1 B. Bound Tests B1. Real GDP growth 11.5 20.5 23.4 21.7 22.6 20.1 22.5 22.2 15.3 10.6 9.8 B2. Primary balance 11.5 17.9 18.3 17.1 17.7 15.7 17.5 17.0 11.9 8.5 7.6 B3. Exports 11.5 18.6 20.2 19.8 20.5 18.3 20.1 19.8 16.6 16.7 15.4 B4. Other flows 3/ 11.5 18.0 18.7 17.6 18.3 16.3 18.2 17.9 13.9 11.3 10.4 B6. One-time 30 percent nominal depreciation 11.5 22.6 23.0 20.9 21.8 19.4 21.8 21.6 14.8 8.5 7.9 B6. Combination of B1-B5 11.5 20.5 23.4 21.7 22.5 20.1 22.3 22.0 19.2 14.5 13.4 C. Tailored Tests C1. Combined contingent liabilities 11.5 17.9 18.2 16.8 17.4 15.4 17.3 17.0 11.6 8.0 7.4 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 11.5 23.9 24.5 22.9 22.9 19.5 20.5 19.3 14.9 12.2 11.0 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 14 14 14 14 14 14 14 14 14 14 14 Sources: Country authorities; and staff estimates and projections. 1/ A bold value indicates a breach of the threshold. 2/ Variables include real GDP growth, GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows. 3/ Includes official and private transfers and FDI. 9 Table 4. Chad: Sensitivity Analysis for Key Indicators of Public Debt, 2020–2030 Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PV of Debt-to-GDP Ratio Baseline 43.5 41.9 39.8 37.5 35.7 33.7 30.3 27.3 25.2 23.7 22.4 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 2/ 43 43 43 44 45 46 46 46 47 49 51 B. Bound Tests B1. Real GDP growth 43 84 93 92 91 90 88 86 85 85 85 B2. Primary balance 43 45 45 42 41 39 35 32 30 28 26 B3. Exports 43 47 55 52 50 48 44 41 38 35 33 B4. Other flows 3/ 43 45 46 43 42 39 36 33 30 28 26 B6. One-time 30 percent nominal depreciation 43 87 83 79 76 72 67 63 59 56 54 B6. Combination of B1-B5 43 44 45 43 43 42 39 36 34 33 31 C. Tailored Tests C1. Combined contingent liabilities 43 57 54 52 49 47 42 39 36 34 32 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 43 77 81 85 88 89 87 86 85 85 85 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Public debt benchmark 35 35 35 35 35 35 35 35 35 35 35 PV of Debt-to-Revenue Ratio Baseline 235.8 275.9 243.1 211.1 209.0 195.7 169.2 147.4 140.8 123.9 114.5 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 2/ 236 280 259 244 257 258 247 240 252 247 251 B. Bound Tests B1. Real GDP growth 236 532 532 489 506 498 465 441 455 427 420 B2. Primary balance 236 295 272 238 237 224 196 172 166 146 135 B3. Exports 236 312 335 293 292 276 245 219 211 183 166 B4. Other flows 3/ 236 297 280 245 243 229 200 176 169 148 135 B6. One-time 30 percent nominal depreciation 236 587 514 453 451 426 380 343 334 298 279 B6. Combination of B1-B5 236 291 270 240 248 240 216 193 189 169 158 C. Tailored Tests C1. Combined contingent liabilities 236 378 332 290 288 270 236 209 200 176 162 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 236 609 579 550 568 547 496 453 466 436 428 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Debt Service-to-Revenue Ratio Baseline 56.5 59.7 55.8 55.5 64.0 63.3 67.4 66.1 62.4 54.7 52.1 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 2/ 56 61 53 56 71 72 82 87 87 78 78 B. Bound Tests B1. Real GDP growth 56 65 68 70 81 82 88 89 87 78 76 B2. Primary balance 56 59 59 59 61 59 64 64 61 54 51 B3. Exports 56 60 56 57 65 64 68 67 65 61 58 B4. Other flows 3/ 56 60 56 56 65 64 68 67 64 57 54 B6. One-time 30 percent nominal depreciation 56 58 58 54 65 64 68 67 61 52 49 B6. Combination of B1-B5 56 60 58 58 67 66 70 70 66 58 56 C. Tailored Tests C1. Combined contingent liabilities 56 59 54 52 59 58 63 64 60 53 51 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 56 73 69 70 90 89 90 85 82 75 73 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Sources: Country authorities; and staff estimates and projections. 1/ A bold value indicates a breach of the threshold. 2/ Variables include real GDP growth, GDP deflator and primary deficit in percent of GDP. 3/ Includes official and private transfers and FDI. 10