Civil society members are disappointed that the World Bank investment in oil in the Doba oil fields in southern Chad has broken down.
The landmark 2001 deal between the World Bank, a United States oil consortium and the Chad government aimed at ensuring that the government harnesses its new found oil wealth to reduce poverty across the country.
The deal gave oil-producing communities in the south 5% of the royalties, and the national government 15%. The remainder was to be spent on the country’s crumbling infrastructure, including its roads, schools and healthcare facilities, as well as on helping cash-strapped rural areas.
But Michel Wormser, director of Africa operations with the World Bank, said the Chad government failed to meet its anti-poverty investment promises. “Not only was the level of investment not being met, but also the quality [of anti-poverty measures] was not there.”
Oil wealth fails to trickle down to the local population
In 2004, its first year of full production, Chad’s GDP jumped 18% to reach almost 30% growth, in part, because of its new-found oil revenue, according to the World Bank.
So far this year Chad has earned $1,4-billion in oil revenues, said Wormser.
Despite this revenue boost, more than 60% of the population still lives in poverty, according to the United Nations.
Wormser said the government has invested too little in infrastructure and social programmes and the programmes it has put in place are poorly designed and executed.
“Roads that were constructed were not maintained, schools were not completed. Clinics had nothing on the shelves. The benefits to the population were very limited.”
The government added security as a national priority to enable more arms spending, according to a report by the US-based think tank, the Council on Foreign Relations.
The government subsequently renegotiated with the World Bank to double its share of oil revenue to 30%.
Delphine Djiraibé Kemneloum, coordinator of Chad-based non-profit organisation the Monitoring Committee for Peace and Reconciliation, said the World Bank should have also helped Chadians directly fight poverty instead of only going through the government. “The damage has already been done — Chadians can only cry because the oil money has not contributed to improving their living conditions but rather to fuel armed conflict.”
Oil revenue watchdog groups in Chad have accused the government of funnelling oil revenue into fighting back periodic rebel groups trying to unseat it.
For Gilbert Maoundonodji, coordinator of an independent oil pipeline monitoring group, the World Bank’s oil investment pull-out was not surprising.
“From the outset of the project, civil society groups said the basis of the agreement was distorted and the World Bank could not make big changes in an environment where most promises are not kept,” he said.
“At the outset we asked for management capacity to be strengthened so that the project could succeed, but these were considered by many to be hysterical demands — now we are in exactly the situation that we predicted,” Maoundonodji said.
Others say the World Bank overstepped its powers. Government official Ousman, who did not want to give his full name, said: “We are a sovereign nation. We have our priorities. We are ready to fight against poverty, but we also have other major challenges to face, namely the Sudanese aggression. It isn’t normal that the World Bank can direct our behaviour from Washington when the reality on the ground is so different.”