Oil royalties flow to Chads oil producing region

Oil royalties flow to Chad's oil producing region

Chad News 4-4-2005

Since the opening of the Chad-Cameroon oil pipeline, large amounts haves started flowing into Chad, mainly as oil royalties. Of these, 5 percent are legally bound to go to the oil producing Eastern Logone province, by now amounting to over US$ 4 million.

Last week, the government of Chad set in motion the mechanism to manage the oil royalties destined for Eastern Logone, where national oil production is based. The launch was marked as the government-appointed Provisional Committee and local non-governmental organisations (NGOs) met to discuss the southern region's development priorities.

Since July 2003, the Chad-Cameroon Oil Pipeline has allowed Chad to export oil to the world market. The huge investments needed to finance the pipeline empowered the World Bank and other institutions to oblige the Chadian government to bind up its future oil revenues in efforts to fight poverty.

According to the revenue key agreed upon and approved by the Chadian parliament, 10 percent of oil revenues must be put aside and invested for future generations. Of the remainder, 80 percent must go to specific priority sectors, including health, education, and infrastructure. Fifteen percent goes to the treasury of the national government to finance general expenditures, while 5 percent goes to finance development programmes in the oil producing region of Eastern Logone.

According to information released by the World Bank today, by the end of 2004, the Eastern Logone had accumulated US$ 4.2 million in oil royalties. Now, the N'djamena government and local pressure groups have started discussing how to best invest these funds.

Last week, the nine members of the government-appointed Provisional Committee met with local NGOs in Doba, the region's capital, to describe their responsibilities and seek the communities' views on priority uses for the funds. The Committee stressed that not all desires could be met instantaneously and choices would have to be made.

Together with local communities, the Provisional Committee and local NGOs are to "identify what development priorities should be undertaken first. They will also oversee project execution and evaluate outcomes," according to the World Bank.

While these tasks normally would fall to local authorities, regional elections to choose decentralised authorities are not expected before 2006 and the communities did not want to wait so long to benefit from oil revenues.

Local communities in Eastern Logone already have put some thought into their needs. Their primary concerns are to improve access to basic infrastructure such as clean water, schools and clinics, and build a larger marketplace. Women's groups were particularly concerned that women not be forgotten in the priorities, given the exceptional burden poverty places on them, such as fetching water and feeding their families.

The Provisional Committee, based in Doba, is composed of three parliamentarians from the oil producing region - two of whom are women - two civil society representatives, two government representatives, and two members from the traditional village and district chiefs of the region.

In the coming weeks, the Committee are to begin touring the region to explain its responsibilities and encourage the local communities to identify explicit priority actions to be funded by the revenues, the World Bank reports. It plans to have identified specific projects in all of the region's four departments by the end of June.

By staff writer