The World Bank said on Thursday it has clinched an interim deal with Chad to unblock frozen oil revenues owed to the impoverished African country.
The global lender said the Chadian government has promised to adopt a new Budget law that will reserve 70% of its oil proceeds for poverty reduction.
”A final agreement is still to be reached, but I welcome the government’s efforts to address these issues,” World Bank president Paul Wolfowitz said in a statement late on Wednesday.
”We believe the steps outlined in this accord provide a way forward to ensure that the people of Chad see the benefits of the aid and oil revenue their country receives,” he said.
Chad and the World Bank have been at a standoff for months since the government of President Idriss Déby Itno changed a law that strictly monitors how it manages its new-found oil wealth.
That law was sponsored by the World Bank and set conditions tied to a $124-million package of loans and grants to help Chad build a pipeline to channel its oil to customers.
The bank reacted by suspending its loans in January and ordering the freezing of the London Citibank account in which Chad holds its oil revenues. N’djamena responded with a threat to suspend its oil production.
The World Bank said that after a third round of talks, an interim accord had been reached allowing it to resume loan disbursements for education, health, HIV/Aids, agriculture, electricity, water and infrastructure.
It said that Chad will in return pass a new Budget law that will keep the lion’s share of the proceeds for social spending, and fund security spending from its general tax revenues.
”If the Bill does achieves this … the Bank will release one-third of the total amount on deposit over each of the next three months, with the understanding that we will work on a further, more permanent agreement during that period,” the lender said.
The United States sent a diplomat to N’djamena this week to mediate in the crisis. A consortium made up of the US oil companies ExxonMobil and ChevronTexaco and Malaysia’s Petronas manages the extraction of oil in Chad.
The World Bank agreement comes as Déby prepares to run for a third presidential term in a May 3 election that is being boycotted by the opposition.
Two weeks ago, government forces repulsed an attack on N’djamena by rebels seeking to topple Déby. Chad accused neighbouring Sudan of sponsoring the attack.
Chad has also withdrawn its delegation from African Union-brokered peace talks for Sudan’s troubled western region of Darfur because of Sudanese attacks.
The World Bank, acknowledging that Chad faces a refugee crisis from the Darfur conflict, said the interim deal provided for independent monitors to step up their oversight to ensure Chad’s oil revenues reach the neediest.
”Our aim has always been to help the government improve the basic services Chad’s people desperately require, from HIV/Aids projects to schools and roads,” Wolfowitz said.
”Suspending aid was a difficult decision but one the Bank had to take given developments that undermined the original agreement to ensure that resources went to benefit the poor people of Chad.” — Sapa-AFP