Chad Oration: Salt & the Oil Curse

Natron

Natron deposit in Era Kohor

Historically, Chad's national resource was natron, a type of salt famous for being used in Ancient Egypt for the preservation of mummies. Natron was an important commodity in ancient times for its everyday use as a preservative. It is a complex sodium carbonate that was also used in the area in the making of soap and medicines. [1] Natron was still used in ceramic and glass making until 640 A.D. Chad's natron was found on the shores of Lake Chad, a volcano in the western Tibesti Mountains called Trou au Natron, and the Era Kohor crater of Emi Koussi, a volcano in the southestern Tibesti Mountains. [2]

Until the 20th century, Chad's only resources were natron, fish from Lake Chad, gold, limestone, sand, koalin (clay) and gravel. [3] Oil was discovered in the late 1960's, but was left alone due to Chad's political instability and corruption. [4]

Chad-Cameroon Pipeline

Path of the Chad-Cameroon pipeline

In an attempt to boost the economy of Chad and alleviate poverty, the World Bank proposed a 1999 plan to build a 650 mile pipeline from the Doba oilfield of Chad to the Gulf of Guniea. An agreement was reached between the World Bank, the Chadian government, and Exxon Mobil the next year, ensuring specific requirements. [5] Chad would use the majority of its profits to fund education, healthcare, public works, and poverty reduction programs. Another fund would hold 10% of each year's revenue for use when the oil dried up. [6] The remaining 12.5% of Chad's oil income would be sent to a London-based Citibank escrow account for the World Bank to monitor. All of these allocations were put in the 1999 Petroleum Revenue Management Law. [7] A list of these percentages can be found here.

As the project was approved on June 6, 2000, the World Bank gave the initial 190 million dollars of the 3.7 billion dollar project. [8] By 2003, Chad was producing oil. In 2005, the country exported 134 million barrels of oil, earning 400 million. [9]

Buried pipeline in the jungle

Chad took back its promise. As one of the most corrupt and least democratic countries in the world, Chad's controlling institute, the Collège de Contrôle, didn't feel impaired by the agreed upon regulations. [10] Citing concern for security on the Sudanese border, the country insisted that the money be redistributed in 2006. In a compromise with the World Bank, it was decided that the government would receive 30% of the oil revenue while still keeping up its improvement projects. [11] The 10% savings fund was done away with. [12]

In the next couple of years, reports of irresponsible use of "relief" money surfaced, stating that the school and hospital products were of terrible quality and that many of the wells were unfinished. Next, Chad repaid their 65.7 million dollar debt to World Bank. Considering that they had made over 1 billion from the oil, this was easy to do. [13] After attempted dialogues with the Chadian government, World Bank was obliged to withdraw its support. [14]

Thinking back, many say they saw it coming. They say it was a good deal in a bad environment - the "Oil Curse" of Africa. Perhaps it would have worked better if the money had not had to go through the government in order to provide resources for Chad's poor. Although now enjoying millions of dollars of oil revenue every year, Chad remains a poor and corrupt country with bad infrastructure and lacking social programs. [15]