The Short, Sad History of Chad’s ‘Model’ Oil Project

A well-written summary of the Chad Oil project fiasco which serves to illuminate why it can be so difficult to do business in many places in Africa...

But since the arrival of the oil money, life in Chad, a country three times the size of California with only a few hundred miles of paved roads, has gotten worse: the conflict in Darfur has spread from Sudan into Chad; the country’s government, already weak and corrupt, has become weaker and more corrupt; and bandits have become rebels. All of this in a country of 9 million people, 80 percent of whom live on less than a dollar a day.
(..)
Statistically, it’s not a surprise that oil money has destabilized Chad. Many academic studies show that underdeveloped countries that are highly dependent on money from natural resources tend to be poorer, less democratic and more unstable than similar countries without resource revenues. What’s surprising is how quickly Chad has deteriorated.
(..)

“The shorthand of what went wrong in Chad is that the revenue-management law was based on the expectation that a law could fix something in a country without the rule of law,” Ian Gary, a policy advisor for the relief agency Oxfam, who has been studying the project since its inception, told me. “Chad has no independent judiciary, no history of peaceful transfer of power and no locally elected officials. All the power is located in the presidency, and it’s only grown more concentrated over time. The [World Bank] characterized the project as ‘High risk. High reward.’ If it went well the bank would have looked good, but all the risk was born by the people of Chad.” (World Bank employees have blogged about their shock and bewilderment at being evacuated because of fighting in the capital this December.)