The global rise in petrol prices favours oil-producing countries like Chad, but the funds allocated to the fight against AIDS in the government's 2008 budget have decreased compared to 2007 because of a need for increased expenditure on security in this unstable country.
Boosted by rising global prices, oil revenues have steadily increased despite lower production in the last few years.
The country started exploiting its oil reserves in 2003, after the World Bank granted funding for the Chad-Cameroon pipeline on condition that 70 percent of Chad's oil revenue would be allocated to poverty reduction programmes like the fight against HIV/AIDS, among others.
Chad passed legislation stipulating that 72 percent of direct oil revenues would be earmarked for "priority sectors" - health, education, social services, infrastructure, rural development - 13.5 percent would go to the national budget, and 10 percent would be set aside in a fund for "future generations", when the oil reserves had run out.
However, the implementation of what was to have been a model plan for other resource-rich poor countries has not always gone smoothly. President Idriss Déby has struggled for years to quell a simmering rebellion in the east of the country, and has accused his Sudanese counterpart, Omar el-Bashir, of supporting the unrest.
In 2005 oil generated CFA francs 144 billion (US$340 million), but at the end of that year the Chadian government "unilaterally enacted changes in the oil revenue management", according to a document on the World Bank website. In consequence, the World Bank suspended its funding to Chad, including the AIDS grant, at the beginning of 2006, on the basis of a problem with governance and mismanagement.
This contravened the agreement with the World Bank and, among other things, was what prompted Déby to denounce the agreement in January 2006. The Bank suspended their programmes until a new agreement was reached in July 2006.
According to the Bank of Central African States, oil brought CFA francs 403 billion ($953 million) into the state coffers in 2006, exceeding the most optimistic predictions.
The annual report of the Collège de Contrôle et de Surveillance des Ressources Pétrolières (CCSRP), an independent body put in place as a result of donor pressure to control and monitor the use of oil revenues, noted that in 2006 the National AIDS Programme received CFA francs 100 million ($236,000) from oil income.
The Projet de Population de Lutte contre le Sida (PPLS2), a poverty alleviation AIDS initiative, financed for the most part by the World Bank, received CFA francs 167 million ($395,000) from the same revenue, the report said.
|12 percent of Chad's gross domestic product will be used to buy weapons - twice the amount allocated to health|
A new memorandum of understanding was signed in July 2006 between Chad and the World Bank, stipulating that 70 percent of the national budget, including the oil money and other government revenues, would be allocated to poverty reduction programmes in 2007, and that a new poverty reduction strategy be drafted with all stakeholders to determine future priorities. This memorandum lifted the suspension on World Bank funds.
The income forecast for 2008, calculated when the oil price was around $100 per barrel, was CFA francs 571 billion ($1.35 billion).
"Oil has given a fairly significant boost to the fight against AIDS," Health Minister Avocksouma Djona Atchénémou told IRIN/PlusNews. "It is thanks to the oil resources that we now have free ARVs [antiretrovirals], which has enabled us to reassure our [international] partners [that Chad is keeping its promises to invest in priority social upliftment sectors].
AIDS spending falls
Despite having this source of income available in a country listed among the 10 poorest in the world, according to the UN Human Development Index, the government will allocate less money to the fight against AIDS in 2008 - CFA francs 1.25 billion (less than $3 million), compared to CFA francs 1.62 billion in 2007.
No explanation for this reduction could be obtained from the government. The budget was drawn up late and promulgated by decree in mid-February without bringing it before parliament, as part of emergency measures taken by President Idriss Déby after a rebel offensive against his regime at the beginning of February.
The ongoing unstable situation in the east of the country resulted in a large percentage of the state's financial resources being allocated to security and defence, despite Chad's commitment in 2006 to dedicate 70 percent of its budget to poverty reduction programmes. According to the International Monetary Fund, 12 percent of Chad's gross domestic product will be used to buy weapons - twice the amount allocated to health.
"This drop [in the amount granted to fight AIDS] can simply be attributed to the war," said Fulbert Mbaïdignodji, a development economist. "As the budget wasn't discussed in parliament, we can assume that other sectors [such as health] were sacrificed in aid of the war. Certain [priority] areas have not been taken into account, or [simply] forgotten, in the fight against AIDS."
But Djedossoum Naoundangar, Secretary General of the Ministry of Health, believes there is no need for alarm. "There is nothing to worry about in terms ARVs. The stocks we have currently could keep us going to the end of the year ," he confirmed. "On top of the projected State money, funding from the Global Fund [to fight AIDS, Tuberculosis and Malaria] is going to start up again to finance ARVs and other reactive drugs."
See also: AIDS in Chad – the neglected crisis
This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions
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