Identifier
Created
Classification
Origin
05NDJAMENA454
2005-03-29 06:23:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ndjamena
Cable title:  

NEW FINANCE MINISTER ON FUTURE OIL REVENUE

Tags:  ECON EFIN ENRG EPET PGOV PREL CD 
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290623Z Mar 05

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FM AMEMBASSY NDJAMENA
TO SECSTATE WASHDC 1205
INFO AMEMBASSY ABUJA 
AMEMBASSY LIBREVILLE 
AMEMBASSY LONDON 
AMEMBASSY NIAMEY 
AMEMBASSY PARIS 
AMEMBASSY YAOUNDE 
DEPT OF TREASURY WASH DC
UNCLAS NDJAMENA 000454 

SIPDIS


SENSITIVE

DEPARTMENT FOR AF, AF/C, EB, LONDON AND PARIS FOR
AFRICAWATCHER, TREASURY FOR OTA, ENERGY FOR GEORGE PERSON
AND CAROYLN GAY

E.O. 12958: N/A
TAGS: ECON EFIN ENRG EPET PGOV PREL CD
SUBJECT: NEW FINANCE MINISTER ON FUTURE OIL REVENUE
MANAGEMENT


UNCLAS NDJAMENA 000454

SIPDIS


SENSITIVE

DEPARTMENT FOR AF, AF/C, EB, LONDON AND PARIS FOR
AFRICAWATCHER, TREASURY FOR OTA, ENERGY FOR GEORGE PERSON
AND CAROYLN GAY

E.O. 12958: N/A
TAGS: ECON EFIN ENRG EPET PGOV PREL CD
SUBJECT: NEW FINANCE MINISTER ON FUTURE OIL REVENUE
MANAGEMENT



1. (SBU) SUMMARY: Chad would like to use new oil revenues
to enhance public security and protect vulnerable groups as
well as reduce poverty, according to Chad's newly-appointed
Minister of Finance. In a meeting with the Ambassador March
25, the new Minister also supported an independent panel to
supervise revenues from new fields, but did not take a
position whether the existing mechanism should be charged
with that task. The Minister welcomed future visits by
Treasury advisors for the Oil Revenue Management College.
END SUMMARY.


2. (SBU) On March 25, Ambassador and Econ/Comm Officer met
with Minister of Finance Ngueyam Djiabe, recently appointed
by President Deby's government to replace Awad Sakine.
Ambassador asked for the Minister's views on regulations
regarding the management of future oil revenues. The
Minister noted that the law regarding oil management
specifically referred to the oil-producing sites at Kome,
Miandoum, and Bolobo. He claimed the IMF and World Bank had
insisted on clearly designating only those sites in the law.
He cited the recent decree by the Council of Ministers, which
announced that revenues from future oil fields would be
managed "in the spirit of" the law applicable to current oil
production.


3. (SBU) The Minister noted that, while the existing law
focused on poverty reduction, two other areas also need to be
addressed: 1) investment in good governance and 2) protection
of vulnerable groups. He believed that the concept of good
governance is a positive first-step in curbing corruption and
freeing up resources for fiscal and infrastructure
development, but also needed to include resources for
domestic security. The Minister pointed out that without
resources for the ministries responsible for maintaining
security (i.e., Ministry of Justice, Ministry of Public
Security and Immigration, etc.),it will be difficult to
reduce poverty or establish good governance practices. What

good are new schools, he pointed out as an example, if it is
too unsafe for students to attend them.


4. (SBU) A second missing component of the decree, according
to the Minister, is a clear reference to protecting
"vulnerable groups." At one point, he indicated that
"vulnerable groups" would include retirees. (Comment:
Throughout 2004, the Government has not been able to pay
salaries or retirement benefits. It is not surprising that
the GOC wants to designate "retirees" as a priority. End
Comment.) The Minister noted that the vagueness of the new
decree could pose a problem, as the Chadian public views the
government's management of oil revenues with suspicion. He
said more information for the public about the use of oil
revenues would be necessary to put to rest these suspicions.



5. (SBU) The Ambassador asked Djiabe about the role that the
Revenue Management College would have in the management of
future oil revenues. The Minister said that an independent
panel will manage future revenues in order to prevent the
misappropriation of resources outside the law. He spoke
favorably about the performance of the Revenue Management
College, but did not comment on whether it or some other
mechanism would manage the revenues. Nor did the Minister
respond explicitly to the Ambassador's comment that there did
not appear to be a need to duplicate the efforts of the
College with another independent panel.


6. (SBU) Ambassador raised the possibility of a Treasury
advisor returning to Chad to aid in the oil revenue
management efforts. The Minister expressed appreciation for
past USG assistance. He looked forward to future visits by
Treasury advisors.


7. (SBU) COMMENT: Minister Djiabe gets high marks in
financial circles here for his competence and his commitment
to fiscal disipline and transparency. His support for an
indpendent body for revenue management is positive, tough
the GOC's position on what mechanism will beused remains to
be seen. His comments on the ned for flexibility in
spending oil revenues outsie the priority sectors defined in
the existing ptroleum law reflect a concern heard
increasingly here. The potential for misuse is obvious. But


for a government which has trouble paying teachers' salaries
and is under constant pressures from insecurity on its
eastern border with Sudan and elsewhere in the country, its
frustrations over how it can spend oil revenues are also
obvious. END COMMENT.


8. (SBU) BIONOTE: Previously, Djiabe served as the former
Minister's deputy, in charge of the national budget. He
studied in Paris, and worked as an attach for economic
development for many years in the Bank for Central African
States in Brazzaville. His experience could be an asset for
the GOC, and his background as a civil servant may leave him
free of political entanglements. The Minister is from the
town of Koumra in southern Chad, and has numerous contacts in
the United States.
WALL


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