Government wants to change oil laws to access more petrodollars

Chad's government is stepping up efforts to change a law that says it must set aside a chunk of oil revenues for future generations. It wants to tap the petrodollars now to help fix a financial crisis and deal with lingering insecurity. Authorities could face a hard sell after the Central African country was recently ranked the most corrupt in the world by international watchdog, Transparency International. But at the end of last week, Prime Minister Pascal Yoadimnadji set out the government's case to diplomats in the capital, N’djamena. “The concept of [saving funds for] future generations is in itself noble," Yoadimnadji said, according to a transcript of the speech obtained by IRIN on Tuesday. "But that future, in our view, could be better secured if these resources were used to build sound infrastructures to hand down to those future generations and better educate the youth of today," he said. “Maintaining this law will not allow us to optimise the use of our oil resources and would aggravate the frustrations of our citizens at a moment when our country faces grave financial difficulties and other daily challenges." Chad, a landlocked, impoverished country, has been hit in recent months with widespread labour strikes. The government is also trying to defuse tensions after scores of soldiers defected. And it is still grappling with the economic after-shocks of housing almost 200,000 refugees from Darfur, which lies just across its eastern border. The current oil revenue law stipulates that 10 percent of funds should be set aside for future use, while other portions go towards improving health, education, roads and water supply in this country, ranked the fifth poorest in the world by the UN Human Development Index. The law was part of the framework required by the World Bank in return for financing part of the US $3.7 billion project to set up a pipeline that snakes 1,100 km through savannah and jungle from the Doba oilfields in southern Chad, across Cameroon to a mooring buoy in the Atlantic Ocean. When the spigot officially opened in 2003, the project -- the largest private sector investment ever undertaken in Africa -- was touted as one that would defy the bleak record of the continent's other oil producers where petrodollars have enriched an elite few but where the masses have seen little to no return. However, the annual corruption barometer, published earlier this month by Transparency International, put Chad firmly at the bottom of the pile of the 159 countries surveyed. The Berlin-based group did pay tribute to Chad's ground-breaking oil project, but said more political will was needed for success. “While Chad has achieved a degree of transparency not seen in other oil-rich countries, ongoing reports of mismanagement or corruption must be followed by government action,” the watchdog said. And civil society groups on the ground in Chad say the government's move to change the oil laws is action of the wrong sort, threatening to saddle the project with the very problems it had been set up to avoid. Wrong direction “The government is breaching its commitment,” Gilbert Maoundonodji, leader of a civil society coalition monitoring the oil project, told IRIN. “It is headed in a terrible direction.” The coalition says that social tensions and financial problems -- the reasons the government has offered for needing immediate access to more petrodollars -- can be put down to one thing. "In a nutshell, it's bad governance," the group wrote in a letter to the prime minister, which was also sent to the World Bank, the International Monetary Fund, the UN Development Programme, the European Union and foreign ambassadors in Chad. Some analysts argue that the fact that the Chadian government is trying to renegotiate the terms of the oil laws shows that the current system is working because authorities cannot circumvent it. "It may be argued that the latest attempt to renegotiate the terms of the legislation is a mark of its success," said Chris Melville, Africa analyst with the London-based research group Global Insight. But he said the prospects of the government being successful were slim. "The World Bank would be reluctant to see a renegotiation of the terms and could not be seen to back down on the hard line it has taken with the Chadian government," Melville said. In the meantime, Chadian authorities are trying to improve their anti-corruption credentials. A Ministry of Moralising is one of the measures prime minister Yoadimnadji said the government is taking to stamp out graft. “We recognise along with all of you that the management of our resources must be better protected by a resolute fight against the misappropriation of public funds," he told diplomats. Many Chadians say corruption was small-scale until the crude began flowing down the pipeline. "Corruption is not new, only it has increased to worrying proportions recently,” one government employee said, on condition of anonymity. “An attitude has developed on the part of civil servants that one can do nothing without asking for money.” And Maoundonodji of the civil society coalition agrees. "Corruption has always existed to some degree in Chad," he said. "But big corruption has come with the oil revenues.”