US embassy cable - 05NDJAMENA454

UNCLAS  NDJAMENA 000454 
 
SIPDIS 
 
 
SENSITIVE 
 
DEPARTMENT FOR AF, AF/C, EB, LONDON AND PARIS FOR 
AFRICAWATCHER, TREASURY FOR OTA, ENERGY FOR GEORGE PERSON 
AND CAROYLN GAY 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, ENRG, EPET, PGOV, PREL, CD, Oil Revenue Management 
SUBJECT: NEW FINANCE MINISTER ON FUTURE OIL REVENUE 
MANAGEMENT 
 
 
1.  (SBU) SUMMARY:   Chad would like to use new oil revenues 
to enhance public security and protect vulnerable groups as 
well as reduce poverty, according to Chad's newly-appointed 
Minister of Finance.  In a meeting with the Ambassador March 
25, the new Minister also supported an independent panel to 
supervise revenues from new fields, but did not take a 
position whether the existing mechanism should be charged 
with that task.  The Minister welcomed future visits by 
Treasury advisors for the Oil Revenue Management College. 
END SUMMARY. 
 
2.  (SBU) On March 25, Ambassador and Econ/Comm Officer met 
with Minister of Finance Ngueyam Djiabe, recently appointed 
by President Deby's government to replace Awad Sakine. 
Ambassador asked for the Minister's views on regulations 
regarding the management of future oil revenues.  The 
Minister noted that the law regarding oil management 
specifically referred to the oil-producing sites at Kome, 
Miandoum, and Bolobo.  He claimed the IMF and World Bank had 
insisted on clearly designating only those sites in the law. 
He cited the recent decree by the Council of Ministers, which 
announced that revenues from future oil fields would be 
managed "in the spirit of" the law applicable to current oil 
production. 
 
3.  (SBU) The Minister noted that, while the existing law 
focused on poverty reduction, two other areas also need to be 
addressed: 1) investment in good governance and 2) protection 
of vulnerable groups.  He believed that the concept of good 
governance is a positive first-step in curbing corruption and 
freeing up resources for fiscal and infrastructure 
development, but also needed to include resources for 
domestic security.  The Minister pointed out that without 
resources for the ministries responsible for maintaining 
security (i.e., Ministry of Justice, Ministry of Public 
Security and Immigration, etc.), it will be difficult to 
reduce poverty or establish good governance practices.  What 
good are new schools, he pointed out as an example, if it is 
too unsafe for students to attend them. 
 
4.  (SBU) A second missing component of the decree, according 
to the Minister, is a clear reference to protecting 
"vulnerable groups."  At one point, he indicated that 
"vulnerable groups" would include retirees.  (Comment: 
Throughout 2004, the Government has not been able to pay 
salaries or retirement benefits.  It is not surprising that 
the GOC wants to designate "retirees" as a priority.  End 
Comment.)  The Minister noted that the vagueness of the new 
decree could pose a problem, as the Chadian public views the 
government's management of oil revenues with suspicion.  He 
said more information for the public about the use of oil 
revenues would be necessary to put to rest these suspicions. 
 
 
5.  (SBU) The Ambassador asked Djiabe about the role that the 
Revenue Management College would have in the management of 
future oil revenues.  The Minister said that an independent 
panel will manage future revenues in order to prevent the 
misappropriation of resources outside the law.  He spoke 
favorably about the performance of the Revenue Management 
College, but did not comment on whether it or some other 
mechanism would manage the revenues.  Nor did the Minister 
respond explicitly to the Ambassador's comment that there did 
not appear to be a need to duplicate the efforts of the 
College with another independent panel. 
 
6.  (SBU) Ambassador raised the possibility of a Treasury 
advisor returning to Chad to aid in the oil revenue 
management efforts.  The Minister expressed appreciation for 
past USG assistance.  He looked forward to future visits by 
Treasury advisors. 
 
7.  (SBU) COMMENT: Minister Djiabe gets high marks in 
financial circles here for his competence and his commitment 
to fiscal disipline and transparency.  His support for an 
indpendent body for revenue management is positive, tough 
the GOC's position on what mechanism will beused remains to 
be seen.  His comments on the ned for flexibility in 
spending oil revenues outsie the priority sectors defined in 
the existing ptroleum law reflect a concern heard 
increasingly here.  The potential for misuse is obvious.  But 
 
 
for a government which has trouble paying teachers' salaries 
and is under constant pressures from insecurity on its 
eastern border with Sudan and elsewhere in the country, its 
frustrations over how it can spend oil revenues are also 
obvious.  END COMMENT. 
 
8.  (SBU) BIONOTE: Previously, Djiabe served as the former 
Minister's deputy, in charge of the national budget.  He 
studied in Paris, and worked as an attach for economic 
development for many years in the Bank for Central African 
States in Brazzaville.  His experience could be an asset for 
the GOC, and his background as a civil servant may leave him 
free of political entanglements.  The Minister is from the 
town of Koumra in southern Chad, and has numerous contacts in 
the United States. 
WALL 
 
 
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