Chads government said on Tuesday it had agreed to put a bill before parliament changing a law which safeguards oil profits for future generations in the poor Sahelian country, despite objections from the World Bank, reports the Banks press review Wednesday.
The original law, agreed with the global lender, has been touted as a test case in Africa to show petro-dollars can help the poor, with 10 percent of oil revenues meant to be saved in a special overseas fund to fight poverty in the long term.
– The adopted bill redefines the priority areas, abolishes the future generations fund, alters the way in which funds are allocated and extends the law to apply to new oilfields, said government spokesman Hourmadji Moussa Doumgor.
He said the National Assembly would have to debate and approve the government bill before sending it to President Idriss Deby to be signed into law.
Chads direct earnings from the pipeline project over the next 30 years are put at 2 billion to 6 billion US dollar – an enormous amount for a poor African country -, of which 10 percent is supposed to go into a fund for future generations, 4,5 percent into developing the southern oil-producing Doba region and 80 percent into the priority sectors of health, education, infrastructure and rural development.
Under the new plan the government will scrap the “future generations” fund, giving it immediate access to around 36 million dollar in an overseas escrow account, and broaden the priority sectors to include security spending.
The World Bank pressed Chad to pass the original oil revenues law in exchange for funding for a 3,7 billion US dollar pipeline which carries crude 1.000 km from the landlocked country to the Gulf of Guinea for export.
World Bank officials in Washington have said the global body may withdraw from the investment if the law is changed and halt lending to the government, a move which would be a major setback for its biggest investment in the worlds poorest continent.
Some analysts say the need to beef up state security is the real factor behind the governments thirst for cash, particularly after scores of soldiers fled their barracks before regrouping in the countrys remote and volatile east last month.
The deserters are threatening to force Deby from power unless he accepts calls to step down.
Kilde: www.worldbank.org
