According to a report by Chad’s “Progress” on November 15, on November 14, the Chadian Parliament voted to allow the government to authorize the Chad New Cotton Company to sign two loan agreements with banks, totaling 124.784 billion Central African CFA francs (approximately US$208 million) ). One of the loans totaled 68 billion Central African CFA francs (approximately US$113 million), which was used for the 2016/17 cotton production season. The main expenditures included the purchase and transportation of raw cotton, seed removal, packaging, transportation from the factory to Douala, and pre-loan Interest, statistical taxes and other fixed charges. Another loan totaling 56.784 billion Central African CFA francs (approximately US$95 million) was used for the production of the 2017/18 cotton season and the purchase of related agricultural inputs.
Chad’s New Cotton Company expects to produce 200,000 tons of cotton in the 2016/17 cotton season. Based on a seed removal rate of 40.87%, it can process 81,740 tons of lint cotton, of which 79,527 tons will be exported and 2,213 tons will be digested locally. Based on the export price of 897.34 Central African CFA francs (about 1.5 US dollars) per kilogram, the export revenue will reach 71.363 billion Central African CFA francs (about 119 million US dollars).
Due to insufficient financial resources, Chad’s new cotton company needs to apply for loans every year for cotton production. In November 2014, it received a loan of 95 billion Central African CFA francs (approximately US$190 million), and in the same period in 2015, it received a loan of 144 billion Central African CFA francs ( approximately US$240 million). Before the vote, some members of the Chadian parliament questioned the company’s use of loans to enrich themselves and harm the interests of cotton farmers. The company currently owes cotton farmers 9 billion Central African CFA francs (about 15 million U.S. dollars), cotton transporters 4.8 billion Central African CFA francs (about 8 million U.S. dollars), and other employees 16 billion Central African CFA francs (about 27 million U.S. dollars). In addition, the company owed 30 billion Central African CFA francs (approximately US$50 million) from 2011 to 2015. Chad passes Chad Cotton Company loan agreement
