US embassy cable - 05NDJAMENA1151

UNCLAS  NDJAMENA 001151 
 
SIPDIS 
 
 
SENSITIVE 
 
LONDON AND PARIS FOR AFRICA WATCHERS, TREASURY FOR OTA, 
ENERGY FOR GPERSON AND CGAY 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, ENRG, EPET, PGOV, CD, Oil Revenue Management 
SUBJECT: TREASURY TEAM MEETS WITH OIL REVENUE COLLEGE, GOC 
OFFICIALS 
 
 
1.  (SBU) Summary:  The candidate for the Treasury Advisor 
position in Chad and accompanying Treasury officials were 
warmly welcomed at the Oil Revenue Management College and 
government ministries during their visit to Chad from July 10 
to 14.  The mission was designed to introduce the prospective 
Treasury Advisor to the College, government ministers, and 
the representatives of the international financial 
institutions.  The presence of a resident advisor to assist 
the College on budget issues received the full support of the 
College and relevant ministries, all of which acknowledge the 
importance of building the capacity in Chad's institutions 
that have responsibility and oversight for petroleum 
revenues.  Reactions from the international financial 
institutions follows in septel.  End Summary. 
 
2.  (SBU) On July 11-13, a Treasury team consisting of Office 
of Technical Assistance Director Michael Ruffner, Treasury 
Resident Advisor Candidate Linda Gregory, and Treasury 
Advisor Ken Torp, met with members of the Oil Revenue 
Management College and the Ministers of Finance and Petroleum 
to introduce Gregory and discuss the management of oil 
revenues.  P/E and E/C officers accompanied the Treasury Team 
to official meetings. 
 
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COLLEGE, TECHNICAL STAFF WELCOME TREASURY ADVISOR 
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3.  (SBU) On July 11, the Treasury team met with Oil Revenue 
Management College Vice President Therese Mekombe, General 
Secretary Barka Michel, and Bidoumi, one of the National 
 
SIPDIS 
Assembly's two representatives on the College.  Mekombe said 
that the College welcomes the presence of a full-time 
Treasury Advisor.  Mekombe said that the College will be able 
to utilize Gregory's budget skills and experience.  The 
College anticipates that the Treasury Advisor would help the 
College on budget issues pertaining to the oil revenues as 
well as the College's internal budget.  Information 
technology assistance could be provided through visits by a 
specialist who can help the College streamline its ability to 
follow a project from introduction to completion and 
inspection.  Mekombe and Michel then turned to specific 
position-related requirements.  They asked if a letter of 
engagement would be prepared outlining who supervises the 
Treasury Advisor and pays for travel and office equipment. 
The Treasury team noted that a letter of engagement and 
detail terms of reference would be prepared.  In addition, an 
action plan would also be developed.  Mekombe and Michel 
emphasized that the Treasury Advisor must work solely for the 
College, and not the Ministry of Finance, as did the previous 
advisor.  The Treasury Team assured the College that the new 
resident advisor would only be working for the College, but 
could help foster collaboration between the College and 
government ministries.  (Comment: The Colllege is concerned 
about government interference in its work and is trying to be 
as independent as possible from the Ministry of Finance.  End 
Comment.)  Gregory was introduced to the College's small 
technical staff and worked with them as well as members of 
the College during her visit. 
 
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MEETING WITH MINISTER OF PETROLEUM 
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4.  (SBU) On July 12, Minister of Petroleum Youssouf 
Abassallah warmly greeted the Treasury team in his office. 
Abassallah welcomed Gregory and the possibility that she 
would return as the resident advisor to the College. 
Abassallah stated that the Revenue Management College was 
extremely important in the management of oil revenues, and 
required the support of the Chadian government and the 
international community.  He pointed out that while it was 
too early to determine whether the College was a success, it 
had made some progress in its capacity to oversee the 
implementation of oil revenues.  However, he argued that the 
College was hampered by its limited role, and said that the 
body would actually be more effective if it were involved 
earlier in the budget formulation stage.  The fact that the 
College is involved only in oversight means that it lacks the 
 
 
ability to influence the execution of projects. 
 
5.  (SBU) The Minister then noted that while the College's 
presence was positive, it did not solve the need to re-assess 
the existing Revenue Management laws.  Abassallah contended 
that due to changes in the country's economic priorities, the 
current laws are out-dated. The priority sectors, according 
to the Minister, afford little flexibility to address 
priority needs, such as government salaries, that fall out of 
the scope of these sectors.  Abassallah also pointed out that 
a lack of unified budget system meant that government 
revenues could not be transferred from non-oil to oil 
priorities and vice-versa. 
 
6.  (SBU) Abassallah then turned to his own Ministry, saying 
that it also faces a host of difficulties.  He noted that 
limited resources hinder the organization's ability to 
effectively carry out its mandate to promote the country's 
petroleum sector and ensure the management of its oil 
resources.  Abassallah explained that while he would like to 
see more promotion of the country's oil potential, the 
Ministry lacks the financial means to reach out to 
international investors.  At the same time, the Ministry 
lacks the tools to monitor the exploitation of oil resources 
by companies. 
 
7.  (SBU) Abassallah concluded by noting that the Ministry 
required the resources to explain the impact of the oil 
project to the public.  He indicated that expectations 
surrounding the project need to be tempered to prevent 
criticism of the oil project.  The Minister said that based 
on projections for reduced revenue for the coming fiscal 
year, the government needs to reduce expectations.  Decreased 
revenues will only create further tension among the Chadian 
public. 
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MEETING WITH MINISTER OF FINANCE 
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8.  (SBU)  On July 13, Gregory, Torp, Ruffner, and P/E 
officer were received by Minister of Finance Ngueyam Djaibe. 
Djaibe had just returned from a meeting about the 
supplementary budget, and although rushed, he warmly welcomed 
the Treasury team.  He assured Gregory that she would could 
have an important impact on building the capacity of the 
College.  He emphasized that it is important for the College 
to be involved in the budgeting process and not just at the 
end stages.  However, this requires an understanding of the 
various budget cycles, procurement process, and finally, 
project evaluation.  Returning to the issue of the national 
budget, Djaibe stated that the Government was initiating a 
review of the oil consortium's accounts.  He noted that the 
price of oil has increased, but the amount of money per 
barrel that Chad is receiving has not.  He clearly understood 
the amounts being deducted from the price per barrel, but 
wanted to know why the consortium has increased fees for the 
use of the pipeline and for transportation.  It was his 
understanding that these are fixed costs that should not 
increase. 
 
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COMMENT 
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9.  (SBU)  Overall, the introduction of the Treasury Advisor 
candidate at the College and Ministries went well.  The 
Ministers of Petroleum and Finance recognize the need for 
capacity-building on budget issues within their own 
ministries and the College.  We expect they will be helpful 
to a resident advisor.  We will look into the issue of the 
oil prices.  End Comment. 
 
10.  (U)  The Treasury team did not have the opportunity to 
review this message before its departure. 
 
WALL 
 
 
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