Empowering Chad’s businesses: Digital solutions for competitiveness
Digital solutions can help Chadian firms become more competitive and resilient to current and future shocks, including a changing climate, but high costs and poor access are holding them back.
Small and medium-sized enterprises (SMEs) are at the heart of Chad’s economic potential, constituting 97% of all businesses in the country. While they play a critical role in helping to build a diverse and competitive economy, these firms face a range of challenges that prevent them from unleashing their full potential, says a new report by the International Trade Centre (ITC).
Promoting SME Competitiveness in Chad: Building business fundamentals through digital adoption offers insights on the strengths and weaknesses of Chadian SMEs. Developed with the Chamber of Commerce, Industry, Agriculture, Mines, and Handcrafts of Chad, the report is based on an ITC SME Competitiveness Survey of 601 firms across all sectors, sizes and provinces, conducted from December 2023 to July 2024.
Chadian non-oil businesses face barriers including underdeveloped infrastructure and limited access to electricity, land and skilled labour. ‘Chad’s vulnerability to crises such as climate change means that many businesses are also exposed to significant risks to their operations – and increasingly so, as the impacts of climate change are projected to grow,’ the report says.
How can SMEs in Chad become more competitive?
More than half (53%) of the firms surveyed in Chad do not use the internet for business operations, citing high costs and poor quality of internet services as key barriers. Nine out of 10 firms consider internet service costs in the country to be high, and 60% say the expense of internet-enabled devices prevents them from becoming connected.
For businesses in a landlocked country such as Chad, adopting digital technologies is vital to overcome geographical barriers and strengthen connections with stakeholders. Although digital adoption remains low, Chadian companies that do use these technologies report major benefits, such as higher sales, lower costs and better access to customers and global markets.
The report finds that 78% of firms using digital tools in their production processes – such as coordination, operations and design – see clear improvements in efficiency and timeliness. In contrast, just 33% of companies not leveraging digital technologies for these purposes achieve similar outcomes.
Innovation is a cornerstone of firm competitiveness and resilience, enabling businesses to adapt to and withstand both current and future shocks. Firms that innovate regularly are better equipped to navigate unexpected changes in their environment and are more inclined to invest in practices that minimize their environmental impact, laying the foundation for sustainable growth.
The report underscores that innovation requires both skilled employees and access to finance. Notably, 55% percent of Chadian firms with a fully skilled workforce innovate regularly, compared to only 13% of companies facing significant skills gaps among their staff.
The report recommends policy reforms to accelerate digitalization, improve access to finance and enhance skills matching. Expanding access to electricity, broadening internet networks coverage and reducing the costs of internet services and devices are crucial to ensure that Chadian firms remain competitive, it says.
Such steps are important to create an enabling environment where SMEs can thrive and help diversify the country’s economy.
