1. Executive Summary
In order for Chad’s economy to succeed in the future, major reforms on oil revenue transparency are necessary. As a result of social and political conflicts, Chad has historically been characterized by division and warfare. Since the discovery of oil during the 1960s, these conflicts have only been exacerbated. The oil pipeline that began construction in 1999 as a result of this discovery inadvertently fueled the tension that had been created. The revenues that were generated from the pipeline were not allocated with transparency, which caused dissent on a global scale. This project was supposed to be an example for all oil-dependent developing countries that agreement and control of revenues could help grow a country’s economy. Ultimately, the methods used to control the revenues in Chad have been inefficient, and are in need of further reforms such as improved national dialogue and access to information.
2. Background
Chad has gone through decades of corruption and poverty due to lack of transparency with oil revenues from the government.
Chad has a diverse population that is divided by a destitute North and a wealthy South. The country is characterized by perennial warfare, with tension between these two “poles,” civil wars from 1979 to 1982, and the advent of anarchy in the country under Hissène Habré from 1982 to 1990. Following Habré’s reign, Idriss Déby continued what Frank and Guesnet called a “cycle of violent power struggles in which
Situated along the coast of the Gulf of Guinea is a region about the size of South Carolina that offers a land full of sweet, light crude oil, known as the Niger Delta (Delta). The Delta sits within the country of Nigeria in West Africa and is in a constant state of crisis, underpinned by a multitude of key issues. Those issues include severe poverty, soil and water contamination, high infant mortality rates, low life expectancy, depletion of natural resources, corruption, and armed militia groups. These issues have one thing in common: oil.
Oil has often been referred to as any economy’s lifeblood. Although this is an overemphasis, oil has been the key, nonhuman resource of the economy throughout the largest part of the 20th century. In the book “The Prize: The Epic Quest for Oil, Money, And Power” by Daniel Yergin, the author illustrates the political, societal, economic, and geo-strategic importance of this product.
The Sudan is home to two civil wars taking place dating back hundreds of years. “The older of the two, pitting the Muslim revels from the south, has claimed 2m lives in the past two decades, and spurred 4m people to abandon their homes.”(Economist 11) Although the two sides in this old war are close to a peace resolution, a new insurgence has begun in the region pitting “Arabs” against the “black Africans”, in an effort to attract peace concessions from the Sudanese government just as the older rebels did years before. An uprising by rebel groups against government targets sparked this new war because they felt neglected by the Sudanese government. But the response of the government to the new revolt falls extremely short of peace concessions, and instead perpetuates an environment of violence, torture and depression. The government has given its own militia, the janjaweed, free reign to pillage, rape and kill black civilians in a futile attempt to squelch the revolt. This can be see as an “ethnic cleansing” in which the government feels that the killings of blacks will hopefully rid the country of the rebels given that the Darfur rebels are mostly black Africans. Thus, the Sudanese
Since 2003, the black African farmers of western Sudan's Darfur region have been victims of genocide. The genociders are Sudan's Arab-dominated government and nomadic Arab militia groups known as the Janjaweed. Darfur’s residents have suffered from discrimination, lack of resources, education, health services, etc. There is a large gap between the resources that the government has invested in Darfur and those invested in riverine Sudan. A fact that clearly illustrates the lack of safety towards the Muslims in the Darfur region is, “Thousands of villages were destroyed, pillaged, burned to the ground, and residents dislocated and killed amongst the violence. Only the villages of African tribes were bombed and attacked; nearby Arab villages were left unharmed, “ (Combat Genocide 1). This quote emphasizes the fact that because of the violence occurring, residents are getting killed or being force to be “dislocated.” In 2009 the United Nations estimated that there were 2.7 million internally displaced persons (IDPs) in Darfur and approximately 270,000 refugees in eastern Chad (Combat Genocide 1). The battles between the rebel groups and the Janjaweed spread into Chad, which led to tensions between Chad and Sudan. Chad had huge problems with dealing with the huge number of refugees (Combat Genocide 1). In the refugee camps, the Janjaweed captured, attacked and raped women when they go outside refugee camps to collect firewood. Many refugees who fled their homes continued to flee from repeat attacks by the Janjaweed throughout Darfur. The genocide of the Darfur people have clearly taken a toll on the persecuted people, creating a life of violence for
“We have been independent ever since August 1, 1960!”, could most of the Chad populace have claimed. After all, the Zoe Arch affair had reopened old wounds. You could once again hear terms like “neo-colonialism” or “French Africa”, not only in some Chad media commentaries, but also in everyday conversations. Ordinary people cared little about the details behind the case. All that remained in the public eye is that a group of White people, French citizens even, had tried to illegally fly off 103 African children.
The Chad oil pipeline was started in October 2000 and was a project consisting of over 300 oil wells in Chad which was planned to extract over one billion barrels of oil. The idea was to run a 640 mile long underground pipe from Chad through Cameroon to an off shore factory where it would be loaded, funded by big companies like Exxon/Mobil, and Chevron with a sizable lone from the World Bank the project seemed like a no brainer. Chad was granted it's independence from France in 1960 and has been plagued by civil wars since mostly notably the Chadian Civil War of 2005 to 2010 which lasted just over four years due to the strained relationship with the Muslim population of the North and the non-Muslim population of the south.
A popular Burkinabé proverb is “An axe does not cut down a tree by itself.” This means that behind every event and collapse, there is always a cause.The military has large amounts of power, and effectively commanded Burkina Faso for 20 years. Of all the countries in Africa, Burkina has the highest amount of coups, with a staggering six or seven total. Class inequality and poverty go hand in hand, with about 50% of the population under the poverty line. In the case of Burkina Faso, almost fifty years of constant changing of power, heavy militarization, social inequality, and crippling poverty are the ones swinging the axe, and with each chop, the country is about to fall down.
The biggest problem with this disaster is that ultimately the people of Chad and Cameroon must repay the loans, it comes out of the equity share they receive from the oil companies operating the project. Those funds that are paying off the loans could have benefited the people of Chad as intended, but instead they went to pay for weapons of war so that President Idris Deby could stay in power through "rigged elections"
The Chad-Cameroon Oil Pipeline Project was a little known project funded by the World Bank. The World Bank worked with Chadian President Idriss Deby and corporations such as Exxon and Chevron to build an oil pipeline from Chad's Doba basin to Cameroon's Atlantic port city of Kirbi in Central Africa. The project was funded by the World Bank in order to bring wealth to the country, reduce poverty, and improve governance. Unfortunately, these ideals did not even come close to seeing the light. Instead of helping his desperate people, Idriss Deby used the oil revenues to fund his dictatorship. Not only did he change the constitution to ensure his permanent rule, but he also used over 30% of the profits on war and even more money on other shady
The Chad Cameroon Petroleum Development and Pipeline Project is one of the largest investments in the private sector in Africa that costs approximately US$3.7 billion. The project is being funded by the World Bank and the International Financial Corporation. The involvement of these two major financial institutions is a demonstration of the rationale that the project will generate revenue that will enable the Chad and Cameroonian governments to invest more in programs that focus on reducing poverty like rural employment, education, and health. The involvement of the International Financial Corporation will be geared towards accomplishing three major roles. These are long-term financing, stabilizing role, and uplifting the quality and standard of mitigation plans and environmental assessments.
Corruption can be defined as the use of entrusted power to accumulate public wealthy for personal benefit. Corruption is not peculiar to any country, continent or state; it is sure a global issue which is an endemic to all government all over the world. However, corruption is prevalent in the Niger delta region of Nigeria; public officers in this oil producing state of Nigeria are corrupt. Consequently, it has defied the Niger delta from developing politically and economically which has left the states reputation in a mess. Radicalization of youths, abject poverty and -political instability are the three leading effects of corruption in the Niger delta region of Nigeria.
The Niger River Delta region was rich in mineral oil deposits and they also produced palm oil, coffee, and tin for export. The economy of the new nation was largely dependent on selling oil production leases to foreign companies and money earned from export of oil. Since, each region had its own government, the politicians were focused on channeling the wealth from the sale of oil into their own region so as to benefit themselves, their followers and their own regions. This gave rise to competition, greed for oil money and corruption among politicians.
Whenever tourists and other people come to our country, and when they ask us what we have, our answer will only be oil. Furthermore, after finding several oil fields in Kurdistan, many problems faced Iraq, especially between the central government and the regional government. We don’t even know how to make use of our oil efficiently. However, oil sector dominates Iraq's economy. Theoretically, Iraq should be a rich country because it is the third largest country in the production of oil. Therefore, Iraq should absolutely set strict and organized laws for the production of oil and especially when it comes to trading and having agreements sharing with other countries. We should have a formal economy, so that the government limit those foreign oil companies for how much production and revenue they should have and to whom they should sell it. But now we have informal economy, which the government does not have the control over those companies. This way they can produce as much as they want each year. This informal economy is what takes us to an unpredictable future of our country because it might be a reason to expose our economy to ups and downs. Furthermore, what the government says is that our system is democratic,
Over the last 50 years, the world has struggled to maintain an economic balance and stability, while flourishing countries try to maintain a steady income to support its people and relations with other countries. Therefore, when a continent like Africa fails to maintain a stable government and economy, super powers such as America decide to intervene with its relations. Africa has great potential to become another pillar of the world’s economic structure with its mass amounts of uncultivated land. Unfortunately, corruption and irresponsible governments hinder that progress. Foreign aid while helpful should be limited to a yearly amount because it allows the government to repudiate responsibility and gives room for corruption; it creates a
Chad’s lack of transparency with respect to oil revenues has yet to be solved by reform. Generally, transparency of oil revenues benefits not only citizens and the World Bank, but also oil companies and the government.