R 271435Z MAY 09
FM AMEMBASSY NDJAMENA
TO SECSTATE WASHDC 6958
INFO USDOC WASHDC
AFRICAN UNION COLLECTIVE

UNCLAS NDJAMENA 000200 
 
 
STATE FOR AF/C, AF/EX, EEB 
LONDON FOR POL - LORD 
PARIS FOR POL - KANEDA, DELIA 
ADDIS ABABA FOR AU 
 
E.O. 12958: N/A 
TAGS: PREL APER ECON ETRD ELAB EFIN CD
SUBJECT:  RISING COST OF LIVING IN CHAD'S CAPITAL 
 
------- 
SUMMARY 
------- 
 
¶1.  (U) The prices of basic goods in Chad's capital, N'Djamena, have 
risen significantly over the past year.  The consumer price increase 
is up 15 percent in the twelve-month March 2008 - March 2009 period; 
prices for basic grains and cereals rose 25 - 30 percent; home 
rental rates in the capital rose 56 percent.  Worker strikes 
continue to be common despite a 140 percent raise in the minimum 
wage in July 2008.  This inflation could be due to some combination 
of rising oil prices in the first half of 2008, shortage in global 
food stocks, the global financial crisis' effect on trade and 
credit, competition for goods brought about by increased 
humanitarian and military presence, and the impact of certain GOC 
decisions.  END SUMMARY. 
 
------------------------ 
PRICEY BASIC NECESSITIES 
------------------------ 
 
¶2.  (U) N'Djamena residents have suffered from significant price 
increases in the capital over the past year.  According to Chad's 
National Institute for Statistics and Economic Study and Demography 
(INSEED), the consumer price index in N'Djamena increased 15 percent 
from March 2008 to March 2009.  In March 2009 alone, month-on-month 
inflation was 8.3 percent in Chad, compared with an average 3 
percent for the six-state Central Africa Economic and Monetary Union 
(CEMAC), of which Chad is a member. 
 
¶3.  (U) Prices in N'Djamena for staple cereals, including maize, 
rice, increased 25 to 30 percent between March 2008 and March 2009, 
according to the Famine Early Warning Systems Network (FEWS-NET). 
The organization forecasted continued price increases of these 
staple goods well into 2009 due to a) sustained demand, b) price 
speculation by local traders, and c) decreasing yields in producing 
countries limiting supply in the international market. 
 
¶4.  (U) GOC decisions in 2008 to demolish homes in some parts of the 
capital coupled with increased demand created by a large and growing 
international community have led to increased rental rates in 
N'Djamena.  It is a landlord's market, as demand far outnumbers 
supply.  INSEED data show a 56.1 percent increase in the cost of 
rental housing from March 2008 to March 2009.  The GOC's nationwide, 
permanent ban on charcoal -- for environmental reasons -- has caused 
Chadians to turn to more expensive butane gas for basic food 
preparation, further inflating the cost of living. 
 
------------------- 
COSTLY SUPPLY CHAIN 
------------------- 
 
¶5.  (U) Chadians consumers are disadvantaged in any case in the 
pursuit of low-cost goods.  N'Djamena lies at the end of an 850-mile 
supply route from the Cameroonian port of Doula over which 75 to 80 
percent of Chad's imported goods travel.  The president of the 
Development Bank of Central African States recently said that it 
cost six times more to transport goods from Douala to N'Djamena than 
to ship those goods from Shanghai to Douala.  Transportation costs, 
as well as both Cameroonian and Chadian import duties, add to resale 
prices that are then further affected by rising oil prices (as in 
the first half of 2008), shortage in global food stocks, the global 
financial crisis' effect on trade and credit, competition for goods 
brought about by increased humanitarian and military presence, and 
the impact of certain GOC decisions. 
 
----------------- 
VOCAL UNHAPPINESS 
----------------- 
 
¶6.  (U) Various groups have protested against the rising cost of 
living and strikes have been prevalent over the past several months. 
 Workers at the Chadian Brewery Company struck in April 2009, 
demanding salary increases.  They also protested the rising prices 
of beer, which they claim forces consumers over the border to 
Cameroon where the same bottle can cost 25-30 percent less.  Other 
union strikes that have started over unfair labor practices or poor 
treatment of colleagues have often devolved to wage and salary 
protests.  These strikes have occurred despite the GOC's 2008 
efforts to address the rising cost of living:  in July 2008, the GOC 
raised the minimum wage 140 percent, from approximately USD 52 to 
USD 124. 
 
¶7. (U) Minimize considered. 
 
NIGRO