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EITI helps identify areas of reforms in Chad

EITI helps identify areas of reforms in Chad

To ensure full benefit from its oil revenues Chad must address the treasury’s weak record keeping system and update its petroleum code from 1986, recent EITI reports found.

Chad's economy is highly dependent on oil. The government’s revenue from the oil sector in 2011 was US $2.1 billion, which accounted for 78% of all taxes received by the government.

This information was revealed in recently published EITI reports covering 2007 to 2011 fiscal periods. The reports show what oil companies have paid to the government in taxes and other fees.

Chad is required to publish such reports every year as the government implements the global standard promoting openness about revenues from natural resources, called the Extractives Industries Transparency Initiative (EITI).

Chad became an oil exporter in 2004, yet more than half of its 12 million inhabitants (55%) live below the national poverty line, according to World Bank data. The land-locked Central African country ranks 184 out of 187 in the United Nations' 2013 Human Development Index.

Oil revenues should benefit the poor

Jonas Moberg, Head of the EITI International Secretariat, noted that the EITI Reports have been crucial to enable the government to better understand the intake from country's most vital economic sector.

“The process of reporting under the EITI has allowed Chad to better trace and record the country's tax intake, while making clear that further reform is necessary to make Chad's tax administration more efficient.”

“Chad has taken a big step in the right direction with the publication of these reports, but further work is needed to ensure oil revenues are managed to benefit the poor,” he added.

A Petroleum Revenue Oversight and Control Committee already oversees how oil revenues are allocated and spent in Chad's state budget. Linking the work of this committee and the EITI could better enable citizens to track the oil revenues and hold their government accountable.

Nabia Kana, National Coordinator for EITI Chad, said there has been improvement.

"There is recognition that oil revenues have not yet significantly increased the annual revenues for the average Chadian, however there has been a significant improvement of infrastructure that benefits the poor. More schools, hospitals and roads have been built with revenues from the oil sector. This is why we continue our work to improve the governance of this vital sector of the Chadian economy."

Chad became an EITI Candidate country in 2010 and conducted its first Validation, the EITI's quality assurance mechanism, in May 2013. This Report found that significant progress has been made, but further work is needed to achieve compliance to the EITI Rules.

Based on this Report, the EITI Board will decide whether Chad is Compliant with the EITI Rules in the coming weeks. For more information on EITI implementation in Chad, please visit the Chad country page on the EITI International website.