Identifier
Created
Classification
Origin
06NDJAMENA1301
2006-11-06 08:49:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ndjamena
Cable title:  

MANAGING CHAD'S OIL REVENUES: 2005 REPORT CARD

Tags:  ECON EFIN ENRG PGOV EPET CD 
pdf how-to read a cable
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FM AMEMBASSY NDJAMENA
TO RUEHC/SECSTATE WASHDC 4538
INFO RUEHUJA/AMEMBASSY ABUJA 1309
RUEHDK/AMEMBASSY DAKAR 1210
RUEHLO/AMEMBASSY LONDON 1588
RUEHNM/AMEMBASSY NIAMEY 2852
RUEHFR/AMEMBASSY PARIS 2024
RUEHYD/AMEMBASSY YAOUNDE 1396
RUEHKL/AMEMBASSY KUALA LUMPUR 0049
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS NDJAMENA 001301 

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR AF, EB, ENERGY FOR CAROLYN GAY AND GEORGE PEARSON,
TREASURY FOR OTA, LONDON AND PARIS FOR AFRICA WATCHERS,
DAKAR FOR FCS REPRESENTATIVE CYNTHIA GRIFFITH GREENE

E.O. 12958: N/A
TAGS: ECON EFIN ENRG PGOV EPET CD
SUBJECT: MANAGING CHAD'S OIL REVENUES: 2005 REPORT CARD


UNCLAS NDJAMENA 001301

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR AF, EB, ENERGY FOR CAROLYN GAY AND GEORGE PEARSON,
TREASURY FOR OTA, LONDON AND PARIS FOR AFRICA WATCHERS,
DAKAR FOR FCS REPRESENTATIVE CYNTHIA GRIFFITH GREENE

E.O. 12958: N/A
TAGS: ECON EFIN ENRG PGOV EPET CD
SUBJECT: MANAGING CHAD'S OIL REVENUES: 2005 REPORT CARD



1. (SBU) SUMMARY: Chad's Oil Revenue Management College 2005
Annual Report presents a vivid picture of just how difficult
it is to spend money well in Chad -- despite the multitude of
needs. While the College continues to strengthen its ability
to verify use of oil revenues, it lacks the resources to
fully monitor projects, and does not have a strong enough
role in the government's budget process. The College cannot
remedy every problem: poorly constructed schools and
unfinished roads are also symptoms of weak government
capacity and lack of competitive markets for goods and
services. The good news is that the spotlight of the Annual
Report has enabled Chadians to have a better notion of how
their oil resources are actually being spent. As indirect
tax payments cause Chad's oil revenues to balloon in 2007,
College oversight (limited to those projects funded from
royalties) will be exercised over an increasingly smaller
percentage of oil revenues earmarked for poverty reduction.
END SUMMARY.

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2005 COLLEGE REPORT - THE BAD NEWS IS THE GOOD NEWS
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2. (U) On September 20, the Oil Revenue Management College
(CCSRP) released its 2005 Annual Report evaluating projects
programmed with oil royalties. Over the course of 2005, the
College approved 124 projects with a value of approximately
USD 164 million. Priority sectors in education, health,
mines and energy and agriculture were each awarded a sizable
share of the resources, but the USD 64 million going to
Public Works overshadows the resources allocated to the rest.
In addition to receiving funding for capital projects, the
Ministries of Education and Health were authorized to use
approximately USD 12 million for recurring costs (salaries.)
(The College also advanced the Government some USD 76 million
for "social payments": salaries and pensions.) While not a
formal and exhaustive audit, the Report is well done, and
provides a thorough picture of the College's work as well as
a decent accounting of the oil revenues flowing into Chad in

2005.


3. (U) College visits to a sampling of sites turned up a
depressing litany of unfinished and substandard construction.
But not all projects were failures --the report card on the
various ministries (showing which have been able to
successfully disburse funding) is revealing. Social Welfare
performed the worst on this account; the Ministry of
Infrastructure (of which more later) came out on top as the
best performer. The report was highly critical of the Mayor
of N'djamena and blasted the Committee overseeing the five
percent of royalties (about USD 14 million) earmarked for the
oil-producing region. Press coverage of the report was
extensive, and both the Mayor of N'djamena and the President
of the Oil Producing Region Committee felt obliged to defend
their record publicly (the latter vigorously arguing the
merits of the Committee's decision to construct a USD 4
million sports stadium in Doba).


4. (U) All in all, the spotlight of the Annual Report,
supported by good media coverage and civil society activism,
has enabled a curious citizenry to have a better notion of
how oil resources are actually being spent. However,
recognizing that the public at large is not well-informed
about the College and the government's use of oil revenues,
the College highlighted in its conclusions the need for a
ramped-up communications strategy to inform the public as
well as to enlist its support in watching for fraud and
abuse.


5. (SBU) In a meeting with World Bank Representative
Marie-Francoise Marie Nelly to discus