CHAD: FISCAL TRANSPARENCY REPORT

UNCLAS NDJAMENA 000095 SIPDIS SIPDIS LONDON AND PARIS FOR AFRICA WATCHERS EEB/IFD/OMA FOR SNOW AND FIGUEROA AF/EPS FOR BREITER AND REPKO AF/C FOR FOX AND BETHEA E.O. 12958: N/A TAGS: EFIN EAID PGOV CD SUBJECT: CHAD: FISCAL TRANSPARENCY REPORT REF: SECSTATE 8670 ¶1. Summary: Despite efforts by the World Bank and other donors to improve accountability and transparency in Chad's budget, the country's fiscal transparency has deteriorated since the last fiscal transparency report in 2003. End summary. ¶2. Chad's national budget is available in print but this document is not readily available to citizens. Not all revenues and expenditures are made public. Over-budget and off-budget expenditures for security are a particular concern but the accuracy of other revenue and expenditure figures is also subject to question. ¶3. According to the report of the IMF/World Bank multi-donor mission in 2007, public finance management in Chad suffers from lack of transparency, deficient budgetary controls, and inadequate human resources. Lack of transparency is certainly a function of weak institutions and inadequate capacity. It is also a function of lack of will. The need to fund ballooning military expenditures in the face of increasingly bold incursions by rebels seeking to overthrow the regime has taken precedence over efforts to increase budget discipline or improve transparency. ¶4. Since February 14, 2008, following a rebel attack on N'Djamena, the Government enacted exceptional measures under which budgetary controls were suspended and normal public procurement procedures waived for 15 days. The measures were subsequently extended for another 15 days. ¶5. Chad is a new petroleum producer, and petroleum revenues have rapidly become the major source of government income. Chad applied to become a member of the Extractive Industries Transparency Initiative in 2007 and has taken steps to conform with EITI standards. The Oil Revenue Management Body set up under the auspices of the World Bank Chad/Cameroon oil pipeline project publishes information on use of oil revenues from royalties. The substantially larger oil revenues from indirect sources (primarily taxes) are not overseen by the body. Since the last fiscal transparency report, U.S. Treasury support to the Oil Revenue Management Body has been discontinued. ¶6. In 2006 the United States supporting budget training for Chadian parliamentarians with Economic Support Funds (ESF). The goal of the training was to provide training in "budget basics" - preparation and analysis of national budgets. ESF funding was also used to purchase computer equipment for the National Assembly. ¶7. The World Bank - with support from the European Union and France - continues to implement a Public Finance Management Capacity Building Project (PAMFIP) to improve the quality of public financial management system and strengthen capacity to make the best possible developmental use of its public resources, including oil revenues. This project includes support for the Oil Revenue Management Body. NIGRO