Four years ago, residents of Koudalwa village, near Bongor in south-western Chad, noticed 4×4 vehicles carrying Chinese people into the bush. They were searching for a good spot to build a central processing facility for their oil extraction project, having bought oil wells from Encana, a Canadian company.
Today, the enormous twin storage tanks of the facility glint in the sunlight, pipelines stretch far into the distance, and a constant roar and a whiff of petrol remind villagers of the gas flare that burns day and night a few kilometres away. A pipeline stretches 300km to a refinery built by the Chinese at Djermaya, near the capital, N’Djamena, and locally produced fuel has been on the market since 2011.
“I don’t understand how the oil is being extracted on my doorstep, yet by the time it reaches me it’s more expensive than before!” says Abangar Basswa, a resident of Koudalwa, reflecting local people’s frustration that the cost of bringing refined fuel back to the Bongor region in tankers along rough roads means that any benefit from its original, cheaper price has been lost.
Not much has changed since the oil project started, but Basswa is happy that the village has a new school and several water pumps, thanks to China National Petroleum. “Like everyone, we just want the best future for our kids,” he says.
A few hundred kilometres further south lies Doba, the first oil-producing town of southern Chad. Esso started work here (pdf) 10 years ago and extracts about 100,000 barrels per day (bpd) from the nearby Kome field.
More than 5,000 Chadians have jobs at the facility, which is by far the biggest private sector employer in the country.
When Chad’s oil project began in 2003, it was with World Bank supportfor a ground-breaking attempt to ensure that most of the revenue would be used for poverty reduction and social development. One aspect of this deal was that 5% of royalties were earmarked for developing the Doba producing region, decided by an appointed regional committee. One of the projects they pushed for was a university.
Sitting in a sparsely furnished office, the university’s vice-rector, Hamdi Mahamat, admits a lot of work needs to be done. “We’re really happy, but two years after we opened we still don’t have enough benches for the students and the library doesn’t have a single book,” he says.
Like several of the projects the committee approved, the university has been called a white elephant. Critics have asked why a town of 50,000 people needs a university, particularly when only about 6,000 students nationally passed the annual baccalaureat exams this year. “Go and ask the people who came up with the idea,” says Mahamat with a smile. “I just manage it.”
Stories like this abound in Chad, which has earned $10bn (£7bn) since oil began to flow. This massively outweighs original projections of about $2.5bn for the 30-year life of the project, and even that was expected to swamp the economy (GDP per capita was $271 in 2000).
There’s clearly no shortage of cash, but, after 10 years of elevated income, the country still performs poorly across a host of development indicators – literacy is 34%, under-five mortality 169 per 1,000 live births, and the country was 184th out of 187 in the UN’s latest human development index. There is a chronic lack of skilled professionals – a handful of gynaecologists, one psychiatrist and a few hundred midwives, for example.
Civil society is quick to accuse the government, and in particular the president, Idriss Déby, of prioritising easy infrastructure projects such as roads and buildings, such as Doba University and a 25,000-seat sports stadium. “We don’t deny there are physical changes but there’s no point having a school if there are no teachers to work there,” says Therese Mekombe, president of Chad’s women’s jurist association.
“Most countries have a fixation with infrastructure, especially when there’s a windfall,” says Alan Gelb, senior fellow at the Center for Global Development. “Part of it is genuine, because there can be a physical transformation, but governments often end up paying a very high price and there is a tremendous opportunity for corruption through the contracts-issuing process.”
In Chad a “college” of civil society, ministry representatives and MPs has responsibility for vetting government spending plans and trying to control this tendency towards undisciplined spending. However, the nine-member body is appointed by the government.
The vice-president of the college, Ahmed Christian Diemathou, is defensive: “Have you seen one person who doesn’t like the way that N’Djamena looks these days? It is a modern city.” However he acknowledges that in 10 years not one request for funds for staff training or professional education has been submitted.
Estimates suggest Chad’s oil could be exhausted by 2030, and Esso has experienced a sharp fall in productivity (pdf), from 225,000 bpd in 2003.
The IMF has been vocal about the economy’s heavy dependence on oil, while other key sectors such as agriculture are ignored. When oil prices crashed in 2009, the government’s fiscal situation was precarious as it had already committed to infrastructure projects based on expectations of high prices.
“Countries need to save for the future and programme that into annual budgets,” says Gelb. “The first step is to get a handle on spending. But discipline is really hard.”
– Celeste Hicks, Guardian Global Development Network