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Chad: Escaping from the Oil Trap

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Chad: Escaping from the Oil Trap Policy Briefing Africa Briefing N°65 Nairobi/Brussels, 26 August 2009 Chad: Escaping from the Oil Trap the bank of the management of oil revenues. The rivalry I. INTRODUCTION among Western countries and China over Chad’s petro- leum resources has limited the bank’s room to manoeuvre. Since 2003 the exploitation of oil has contributed greatly to the deterioration of governance in Chad The increase in oil prices in 2007 generated enough re- and to a succession of rebellions and political crises. sources for the regime to undertake large public works The financial windfall – in 2007, 53 million barrels projects. Advertised as a way to modernise the country earning the government $1.2 billion – has increased through oil revenues, these projects led in 2008 to a corruption, stoked domestic dissent and led to rebel- budget deficit that is likely to persist. Moreover, the lions supported by neighbouring Sudan. The revenues opaque awarding of public works contracts increased have also allowed President Idriss Déby to reject politi- cronyism and corruption. The government also gradually cal dialogue with his opponents and to respond to the reduced the role of the committee that had been estab- threat from Sudan by overarming his military forces. lished to involve civil society in the management of oil The hope aroused by the discovery of oil has given way revenues, the Committee of Control and Supervision of to generalised disenchantment. To escape this vicious Oil Revenues (CCSRP in French). By changing the circle and establish the conditions needed for durable membership of the CCSRP in 2008, the government stability, the government must work to establish a limited its ability to control the use of the revenues. national consensus on the management of oil revenues. In sum, oil has become a means for the regime to Its principal external partners – France, the U.S. and strengthen its armed forces, reward its cronies and co-opt China – must condition their support for the regime members of the political class. This has further limited on such a consensus. political space for the opposition and helped keep the Chad’s petroleum project was bedevilled by numerous country in a state of political paralysis that has stoked controversies that almost blocked its realisation. Begin- the antagonism between the regime and its opponents. ning in 2000, however, the involvement of the World As a result, there is recurrent political instability that is Bank allowed the project to move forward. It was an likely to ruin all efforts to use oil for the benefit of the apparent role model for development, because the country and its enduring stability. For the people who mechanisms for managing oil revenues seemed to guar- have not seen their lives improve and who are subjected antee an effective fight against poverty. These mecha- to increased corruption, oil is far from a blessing. Given nisms specified that the revenues were to be dedicated the current situation, the following measures should be primarily to improving the lives of Chad’s present and taken to extricate Chad and its external partners from future population. the petroleum trap: In 2004, less than a year after the exploitation of oil be- The government should include the question of how gan, the closing of the nation’s political space for the to use oil revenues in the domestic dialogue started benefit of President Déby aggravated dissension within under the accord of 13 August 2007. It should organ- the Chadian power structure and increased tension ise a round table including the political opposition, throughout the country. This situation led to several civil society and representatives of the oil-producing attempted coups d’état by close collaborators of the regions. The principal recommendations of the round president, who subsequently joined the rebellion fight- table should be included in the follow-up mechanisms ing the government. Weakened by the armed opposition for the accord. supported by Sudan, Déby decided in January 2006 to The government should strengthen internal control and modify the initial system of management of oil revenues oversight mechanisms of oil revenues. The CCSRP’s in order to make more funds available to buy arms. regulations should be revised to stipulate that its members will meet full-time, like other independent In reaction, the World Bank suspended its programs. Far state bodies, such as the Supreme Court or High from forcing the government to backtrack, this motivated it Council for Communication. This change is needed to put in place regulations that removed any oversight by to improve the CCSRP’s efficiency and technical Chad: Escaping from the Oil Trap Crisis Group Africa Briefing N°65, 26 August 2009 Page 2 proficiency. The ethics and justice ministries should adoption of a new constitution on 30 March 1996 and systematically apply its recommendations and inves- victory in presidential and legislative elections in 1997.1 tigate problems it brings to light. Hailed as the gateway to a more promising era in Chad’s The government should regularise its procedures so troubled history, the ceremony of 10 October 2003 has that the great majority of government contracts are let nevertheless struck a false note in some quarters: the on the basis of competitive bids and not by bilateral Collectif des associations tchadiennes de défense des agreement. Such a change is indispensable for fight- droits de l’homme (CADH – Collective of Chadian ing corruption and for eliminating the opaque award- Human Rights Organisations) marked the day by observ- ing of contracts as a source of unjustified enrichment. ing “national mourning”, declaring notably that “oil reve- There should also be an audit of the various public nues equip the authorities with a new weapon and will 2 works now being built. be of hardly any benefit to the population”. The government should ensure an improvement in the This episode, just like the frequent controversies that have technical abilities of civil servants. Petroleum reve- flared up during the implementation of the oil project,3 nues should be used to establish a program supported vividly illustrate the ambivalent impact of oil upon the by civil society to train them on a continuing and political scene; they are a portent of the extent to which regular basis. poor management of the oil sector will exacerbate politi- To replace the International Consultative Group (GIC cal and security tensions. in French), whose mandate expired in June 2009, an independent, multidisciplinary body composed of A. THE HEAVY-HANDED ELIMINATION OF representatives of Chadian and international civil POLITICAL OPPOSITION society should be created and receive financial support from the World Bank. Its role would be to undertake Chad’s entry into the oil producing countries’ club came studies, make recommendations and give technical at the end of a lengthy and tortuous process. The main support to the CCSRP. hurdle to be overcome was the political and institutional France, the U.S. and China should collectively sup- uncertainty that had, for decades, blocked the path to any port an inclusive Chadian national dialogue in order to create the conditions likely to lead to enduring stability. They should make their support for Déby 1 contingent on the proposed reforms and measures See Crisis Group Africa Reports N°111, Chad: Back towards War, 1 June 2006, and N°144, Chad: A New Conflict Resolu- cited above. The three countries, but in particular tion Framework, 24 September 2008, for a historical back- China, which is present in both the Chadian and ground and proposals for a durable solution to the Chadian Sudanese oil sectors, should also weigh in more crisis. Crisis Group Africa Report N°149, Chad: Powder Keg heavily in favour of stabilising relations between in the East, 15 April 2009, analyses the internal reasons for N’Djamena and Khartoum and of halting support by the repeated armed rebellions in the east of the country. each country for rebels in the other country. 2 See “Cinq ONG dénoncent la recrudescence de l’insécurité au Tchad”, a statement published on the website of the Fédération internationale des droits de l’Homme (FIDH), which can be II. FULFILMENT OF THE OIL DREAM found at http://survie.org/5-ONG-denoncent-la-recrudescence. html; and A. Nadjingar, “Une journée de deuil mal comprise”, POSES BIG CHALLENGES N’Djaména Bi-Hebdo, nos. 709 and 710 (2003). 3 The origins and evolution of the exploitation of Chad’s oil have been the subject of a number of books, articles and reports: Martin On 10 October 2003, production of Chad’s first barrel Petry and Naygotimti Bambé, Le pétrole du Tchad. Rêve ou of oil was officially inaugurated in a grandiose ceremony cauchemar pour les populations? (Paris, 2005); Géraud Magrin, held at Doba, in the south of the country. With the presi- Le Sud du Tchad en mutations, des champs de coton aux sirènes dents of the Central African Republic, Congo (Brazza- de l’or noir (Montpellier, 2001); K. Horta, “Chad/Cameroon ville), Sudan and Niger in attendance, the Chadian presi- oil” in Pipeline project, background and recent informations dent Idriss Déby symbolically opened the valves of the (Washington, 1997); Gilbert Maoundonodji, Etude relative à complex that would pump Chadian crude out of the un mécanisme alternatif de monitoring du projet pétrolier ground and onwards to the world market. A veritable tchadien, Cellule d’information et de liaison des organisations apotheosis for Déby, the ceremony was just the latest in non gouvernementales (CILONG, N’Djamena, 2000); Centre de a series of political successes accumulated by his regime formation au développement (CEFOD), “Pétrole tchadien: les enjeux du développement” in Tchad et Culture no. 209- since he took power in 1990: the Sovereign National 210 (N’Djamena, 2002); Renodji Djimrabaye, Pétrole et dette.
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