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World Bank, Govt of Chad Sign Memorandum of Understanding on Poverty Reduction

Available in: Français
Press Release No:2007/19/EXC


In Washington: Tim Carrington (202)473-8133

Damian S. Milverton(410)702-5775



WASHINGTON, July 14, 2006—Representatives from the World Bank and the Government of Chad have signed a memorandum of understanding under which the Government of Chad has committed 70 percent of its budget spending to priority poverty reduction programs, and provided for long-term growth and opportunity by creating a stabilization fund.  The Government also will enhance transparency and accountability with a new pledge of support for the role of the Collège, Chad's independent oil revenue oversight authority.


Priority programs are in the areas of health, education, agriculture, infrastructure, environment, rural development, de-mining, and good governance.


During the period covered by the memorandum, the Bank and the International Monetary Fund will work in partnership with the Chad Government to develop a framework to guide annual budgetary process, beginning with the 2007 budget. The Bank has been working with the authorities on the 2006 budget currently before Parliament. Under the new agreement Government revenues in excess of the projections of the expenditure framework will be set aside in a reserve stabilization fund for future use.


To map out poverty reduction priorities and provide a permanent framework for spending, the Bank, other donors, and civil society groups, will support the government in preparing a Poverty Reduction Strategy Paper. This strategy is likely to take around 12 months and, when complete, will be implemented in law.


Earlier this year, the Bank and Chad reached a temporary agreement to direct 70 percent of limited revenues to priority sectors. The new accord substantially expands Chad's commitment to its poorest citizens as 70 percent of all revenues will be devoted to poverty programs.


"We now have a good foundation for the work ahead. This is a huge step forward," World Bank President Paul Wolfowitz said. "The Chadian authorities have committed to ensuring that all oil revenues, not just the royalties, are spent on health and education and other basic needs of the poor."


Additionally, the World Bank and the Chad authorities agreed to strengthen the Collège de Controle et Surveillance des Revenues Pétrolières – an independent body with oversight of the use of oil revenues for poverty reduction – by ensuring it has the resources to more effectively perform its duties.


The new agreement also provides for the continued allocation of five percent of oil revenue for projects on behalf of the people in the Doba region itself.


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