Chadians struggle despite oil wealth

May 15, 2006 02:00 AM

by Joe Bavier

It has been three years since Chad became an oil-exporting nation. The promise of petroleum revenues had fuelled hope that the central African country, long one of the world's poorest, would embark on the road to prosperity.
But there are few, if any, visible signs of improvement. Joe Bavier recently travelled to Chad and filed this report.

As temperatures creep towards 50 degrees Celsius along the main commercial street in Chad's capital N'Djamena, 35-year-old Yankal Dankor sits in what shade he can find, a cautious five meters from his stock of smuggled fuel.
"Gasoline catches fire just like that," he says. "I have seen it happen. People get killed. In 1984, we had a barrel that exploded. Gas went everywhere. People were burned alive. It was here on this road."

Chad has insufficient refineries, so many Chadians still rely on gas smuggled from abroad. Despite the dangers involved, Dankor has been doing this job for more than 20 years. He says it is the only one that will allow him to support his family of eight. On a good day, he says he can earn as much as $ 5.
Three years ago, Chad joined a handful of African nations as an oil exporter. Today, it exports around 170,000 bpd and has, so far, received around $ 400 mm in oil revenues. The World Bank estimates that the new income will boost Chad's annual budget by 40 to 50 % during the next 25 years.

But since production began, the population has grown even poorer. In 2002, Chad ranked eighth to last on the UN human-development index. Today, it is among the bottom five.
"We do not have anything here," says Dankor. He says the "suffering you see here, it’s even worse than it was before."
In Africa, for ordinary citizens oil has usually been more of a curse than a blessing. Nearby Nigeria is among the world’s top 10 oil producers and is sub-Saharan Africa's sole OPEC member country. But production in its oil-rich Niger Delta has become synonymous with armed conflict, corruption and environmental destruction.

Things were meant to be different in Chad.
In 1998, the government agreed to set aside the majority of its oil revenues to pay for social projects as part of a deal with the World Bank to fund the construction of a 1,070-km-long pipeline to neighbouring Cameroon.
Some 10 % of revenues were to be held in a trust fund for future generations. Some 80 % of royalties and 85 % of dividends were to pay for education, health, rural development and infrastructure and environmental projects. Some 5 % of royalties were destined for reinvestment in oil-producing areas.

But last December, Chad's parliament voted to change the law. Government officials said they needed more control over the money to carry out immediate poverty reduction projects and to combat a growing rebel insurgency in the east. Earlier this year, President Idriss Deby said Chad was planning to use some of the money to buy arms.
The World Bank accused Chad of reneging on its agreement, froze off-shore oil accounts and suspended its assistance to the country. Chad replied by threatening to block oil exports.

Chad's finance minister, Abbas Tolli, says as the position of the World Bank hardened, "we felt it was better to cut off production if we were not going to have access to the revenues anyway."
In April, lender countries agreed to an interim deal with Chad that will allow 30 % of oil revenues to go directly to government coffers. But Tolli says it is not enough, and much of the World Bank deal will need to be renegotiated.

The US government has been involved in the poverty reduction scheme from the very beginning. And though US ambassador to Chad, Marc Wall, admits there have been setbacks, he says there are signs the deal has in some ways benefited Chad's people.
"It is an experiment," he said. "And it has had its ups and downs. Revenue has been going into poverty reduction programs. It takes time for these projects to bear fruit, and people are always impatient. But there has been some progress."

For his part, Dankor says he not sure who to blame for the lack of progress. The government should be doing more, he says. But he says he has little hope that the situation will change anytime soon.
President Deby was declared the winner of a May 3 presidential election, which observers say were marred by instances of fraud and low turnout. Chad has never experienced a non-violent transfer of power.

Dankor says nothing changes in Chad. He says it’s the suffering that gets worse. He says he has never seen the oil.
"I could not even tell you what colour it is," he said.

Alexander's Commentary

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