Chad: Oil money, hungry people

Doba field, Chad. Photo: Esso Chad

Today Chad is facing a food crisis. An alarming number of people are hungry and sick in the northern part of the country.

The Guardian ran a story recently on the dire situation, Chad’s malnourished children offer stark illustration of Sahel food crisis.

Strangely, the article doesn’t mention the fact that Chad is an oil producing nation with sizeable oil revenues.

Chad earned more than US$2 billion in 2011 from the ExxonMobil Doba fields project. As I’ve reported, by 2008 Chad had already earned more than US$8 billion from the Chad-Cameroon oil development project. China is also drilling and refining oil in Chad. I don’t have figures for Chad’s earnings from Chinese drilling, and the Chinese-built and 60% owned refinery has been mired in conflict since it opened in June 2011. But the point remains: Chad has oil revenues, but apparently there’s not enough money to deal with the food crisis.

What’s the point of developing an oil industry, if oil revenues can’t feed your people?

I know, the situation in Chad is complex. Cyclical drought and hunger are ongoing problems. The political upheaval in Libya prompted more than 90,000 Chadians to return home. Northern Chad is a remote and desolate place where, in the best of times, most people just get by. Chad is spending oil money on a number of big, visible projects — a new university and hospital in N’Djamena are two of the most ambitious projects to date.

Some say that Chad spends its oil revenues on white elephant type projects — big, dazzling buildings that look good, but do little to improve the lives of ordinary Chadians. N’Djamena’s 30,000 seat football stadium built with oil revenues, is often cited as one such project.

I’m not saying that universities and hospitals don’t matter. These projects, along with other infrastructure work, are important for the country. But even today, 80% of Chadians depend on subsistence agriculture. As Chad has faced drought, hunger and food crises in the past, wouldn’t it make sense for more of that oil money to go towards improving agriculture and feeding people?

And, sadly, the crazy drilling boom that’s occurring across the continent is putting more pressure on the environment. (Does anyone even talk about global warming anymore?) In Africa, local populations see little of the benefits of oil and gas drilling, but they pay dearly in terms of environmental degradation. The situation in the Sahel, which, of course, can’t be directly connected to global climate change, appears nonetheless to be growing worse each year.

So, again, what is the point of having oil if you can’t feed your people and your oil exploitation may actually exacerbate your hunger problems?

Chad is not alone. Niger is also producing oil and facing a food crisis.

Johnny West at Open Oil has written an excellent think piece on Niger’s nascent oil industry, The story of Niger, or how not to have an oil boom while your people starve.

The article begins, “There can’t be many countries who face famine as their GDP rises by 14%. Yet that is the situation in the West African state of Niger, where the World Food Program, the International Red Cross, Oxfam and other humanitarian agencies launched appeals this week to help some 400,000 people now at risk from severe malnutrition. At the same time as an oil boom kicks in and IMF analysis predicts a rise in government income of 30% in 2012.”

It’s a provocative article and the author provides a list of initiatives that he believes could be implemented and immediately improve the lives of millions:

  • That the Nigerien government suspends its capital expenditure program to make funds available for emergency relief.
  • That foreign oil companies producing in Niger’s new field, China’s CNPC and Algeria’s Sonatrach, defer cost recovery claims by enough to allow all necessary emergency supplies to be bought.
  • That the governments of the Sahel region, where up to ten million people are going hungry again this year, create a regional stabilisation fund using petrodollars from new and established industries in Chad, Mauritania and Niger. The World Bank and IMF could provide technical expertise and match funds.

For now, however, drilling continues, oil and money flow and people go hungry.

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