Identifier
Created
Classification
Origin
05NDJAMENA867
2005-05-31 06:55:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ndjamena
Cable title:  

CHAD'S OIL REVENUE MANAGEMENT COLLEGE UPDATE

Tags:  ECON EFIN ENRG EPET PGOV CD 
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This record is a partial extract of the original cable. The full text of the original cable is not available.

310655Z May 05

ACTION AF-00 

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 ------------------F7A308 310727Z /38 
FM AMEMBASSY NDJAMENA
TO SECSTATE WASHDC 1698
INFO AMEMBASSY ABUJA 
AMEMBASSY DAKAR 
AMEMBASSY LIBREVILLE 
AMEMBASSY LONDON 
AMEMBASSY NIAMEY 
AMEMBASSY PARIS 
AMEMBASSY YAOUNDE 
DEPT OF TREASURY WASH DC
DOC WASHDC
DOE WASHDC
UNCLAS NDJAMENA 000867 

SIPDIS


SENSITIVE

LONDON AND PARIS FOR AFRICA WATCHERS, TREASURY FOR OTA,
ENERGY FOR GPERSON AND CGAY

E.O. 12958: N/A
TAGS: ECON EFIN ENRG EPET PGOV CD
SUBJECT: CHAD'S OIL REVENUE MANAGEMENT COLLEGE UPDATE

REF: A. NDJAMENA 72


B. NDJAMENA 04 2157

UNCLAS NDJAMENA 000867

SIPDIS


SENSITIVE

LONDON AND PARIS FOR AFRICA WATCHERS, TREASURY FOR OTA,
ENERGY FOR GPERSON AND CGAY

E.O. 12958: N/A
TAGS: ECON EFIN ENRG EPET PGOV CD
SUBJECT: CHAD'S OIL REVENUE MANAGEMENT COLLEGE UPDATE

REF: A. NDJAMENA 72


B. NDJAMENA 04 2157


1. (SBU) Summary: Based on the assessment of visiting
Treasury advisors, Chad's Oil Revenue Management College (the
College) is working as intended and even in some cases has
succeeded in exercising a stronger role than mandated.
During their visit to N'Djamena May 15-26, Ken Torp and
Eileen Brown of Treasury's Office of Technical Assistance
discussed the selection of a new resident Treasury and worked
with the College's technical staff on the management of its
internal workload and its budget development and execution.
Additional technical assistance through a new resident
advisor and targeted training will help strengthen the
College's capacity in budget development and execution. End
Summary.

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COLLEGE MEETING ITS MANDATE...
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2. (SBU) In a debrief May 26, the Treasury team told the
Ambassador that the College is largely meeting its mandate.
In 2004, the Government's gross earnings from oil revenues
was 169 million USD. This figure is prior to deductions for
debt payments, funds for stabilization, future generations,
and the producing areas. (Ref A.) The College approved
commitments of all revenues received with the exception of
close to USD 14 million, which the Chadian Treasury, in
conjunction with the Central Bank, rolled over for use this
year. The College has approved close to USD 200 million to
date. The projected gross earnings from oil revenues in 2005
is USD 242 million.


3. (SBU) Nine ministries have benefited from oil revenue
projects. They include public works, agriculture, education,
health, environment, mines and energy, and
telecommunications. The bulk of the projects approved are
for public works and roads, education, and health. Other
expenditures include a small subsidy of 250 million FCFA
(almost USD 500,000) to the Ministry of Petroleum and to
inter-ministerial development, a project designed to link the
Government ministries together with electrical and
communications lines. Another interesting development is the

use of oil revenues to pay salaries in the priority sectors,
such as education and health.


4. (SBU) The College is playing an increasing influential
role earlier in the budgetary process, one which goes beyond
the mandate defined in Chad's petroleum law, according to the
Treasury advisors. With the budget cycle for 2006 just
beginning, the Ministry of Finance will soon issue a letter
to all ministries outlining the Government's budget
priorities and delineating a series of percentages for
expenditures in each sector. The ministries will be
requested to send their "wish list" to the Ministry of
Finance. After reviewing the budget proposals, the Ministry
of Finance will send back a list of how much each ministry
can spend. A budget conference will be scheduled at which
the College will be able to question some of the projects.


5. (SBU) Last year a technical staff member from the
College participated as an observer in this process. This is
the first year that the College will be involved from the
beginning. The College is expected to receive each
ministry's "wish list" in advance. The College's comments
will be sent to the Council of Ministers along with the
Ministry of Finance's recommendations. The Treasury advisors
advocated that a College member attend the budget review
conference along with a technical staff member. A College
member would have a higher status and more likely be able to
ask difficult questions.


6. (SBU) In the past, the College has rejected projects,
and its rejections have been respected, according to the
Treasury advisors. Although the petroleum law stipulates
that the College is authorized to reject projects at the time
of payment, it is now doing so at an earlier stage In
practice, the professional technical staff is intervening to
stop project proposals at the time they review the

procurement notices. This, according to the Treasury team,
saves valuable time so that projects that do not meet the
criteria for funding are stopped well before the obligation
stage. The technical staff confirmed that they turn back
many projects for clarification.

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... BUT NEEDS TO THINK STRATEGICALLY
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7. (SBU) College board members meet regularly to consider
the project proposals vetted by the professional staff. The
Treasury team is concerned, however, that meetings of the
College board members are held to merely rubber stamp the
work of the technical staff instead of setting direction,
trouble-shooting, resolving bureaucratic issues, or
determining if the projects are contributing to overall
poverty alleviation. Another issue that requires leadership
from the members is improvement in the relationship with the
Ministry of Finance, which currently views the College in
almost adversarial terms. A possible positive outcome of
improved relations between the College and MOF, according to
Torp and Brown, would be the adoption of successful College
practices by the MOF to improve their own budgetary process.


8. (SBU) The Treasury team also noted that the College's
monitoring of projects has no enforcement mechanism. It is
extremely important for the College to follow through with
the various ministries in cases where the College attempts to
verify a project and discovers that projects are inadequately
executed (i.e. no wells or a poorly constructed building).
Due to the lack of enforcement, the College is unable to
focus on the results of specific projects. Finally, the
College members, according to the Treasury team, need to have
in place a management system within the College, build a
sense of teamwork, and develop their own budget priorities.
The Treasury team noted that a Resident advisor would aid
these activities not only through providing expertise, but
also through identifying needs for training programs in
specific areas, such as budgetary analysis or IT management.


- - - - - -
SITE VISIT
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9. (U) On May 25, the Treasury team, political assistant, and
member of the College's technical team visited a school in
N'Djamena which is the beneficiary of a project funded with
the petroleum revenues. Prior to the project, some five
thousand students attended class in mud structures with
corrugated tin roofs which had no furniture. The project of
12 billion FCFA (24 million USD) paid for the construction of
concrete school blocks, a wall, a sports facility,
guardhouse, and furniture for the classrooms. The project is
still being completed.

- - - -
COMMENT
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10. (SBU) So far Chad's oil revenue management College
appears to be working as intended. It is still in its early
days, however. Much work remains in terms of determining how
revenues from new fields will be managed, how project
execution will be verified, and how the College will fit into
the overall budget process. A resident Treasury advisor will
have a pivotal role in influencing those decisions.


11. (U) Torp and Brown did not have the opportunity to
review this message before their departure.
WALL


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