In the last three years, Chad’s economy has experienced strong economic growth from its oil industry. In 2004, foreign investments into Chad and petroleum exports via the Chad-Cameroon pipeline were the primary driving forces behind the country’s considerable real gross domestic product growth (GDP) rate of 30 percent. In 2005, high oil prices attributed to Chad’s GDP growth rate of 7 percent. Investments in Chad’s oil industry have led to growth in other areas as well, such as the trade, transportation, and public services sectors. Additional economic growth is expected to come from foreign investment in new oil exploration licenses that are to be offered in 2007. Although oil production was not impeded, Chad experienced civil strife throughout 2006, which included rebel forces marching on the capital, N’Djamena.

Cameroon’s economy has exhibited steady economic growth since the mid 1990’s. However, the country saw a slight decline in real GDP growth after the completion of the Chad-Cameroon pipeline. In 2005, the real GDP growth rate was 2.6 percent. High energy prices have helped offset economic growth declines, but they have also increased inflationary pressures in Cameroon. In 2005, inflation was 2 percent. In May 2006, the International Monetary Fund (IMF) and the World Bank indicated that Cameroon had completed its obligations under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Cameroon will now receive more than $1 billion in bilateral debt relief and additional multilateral aid, which together, will provide a 50 percent reduction in the country’s total external debt.

Chad became a net petroleum exporter after the Chad-Cameroon pipeline came online in 2003. Industry experts still consider Chad under-explored, and future oil discoveries could increase petroleum exports even more. Chad lacks refining infrastructure and relies on neighboring Cameroon and Nigeria for refined product imports, however, delivery problems often leave Chad faced with refined product shortages. Chad has no known natural gas reserves and neither produces nor consumes natural gas. Due to a lack of investment, Chad generates and consumes only small amounts of electricity, of which, 100 percent is conventional thermal electricity. In place of electricity, the majority of Chadians rely on biomass fuels such as wood and animal dung.

Cameroon has experienced a fairly steady decline in its domestic oil production over the past 20 years. The country is still a net oil exporter, but if new fields do not come online in the near future, Cameroon could become a net oil importer. Currently, Cameroon does not produce any natural gas, but the country has plans to develop its natural gas reserves for generating electricity in the future. The majority of electricity generated in Cameroon comes from hydroelectric power stations, though droughts can often leave the country dealing with electricity shortages.