Chad and the World Bank reach agreement

Chad and the World Bank have reached an agreement resolving a four-month dispute over how the central African country uses its revenues from a World Bank-backed oil program, the foreign affairs minister said Thursday.

Photo: Chad and the World Bank reach agreement

"The World Bank and Chad have finished (their negotiations). They have reached an agreement," Foreign Affairs Minister Ahmad Allam-mi told The Associated Press. Allam-mi said that he did not have the details of the agreement yet but he knew a deal had been reached.

The World Bank released a statement from Washington dated Wednesday saying an "interim accord" had been reached. It was not immediately clear whether Allam-mi's statement Thursday referred to further progress.

The World Bank had frozen hundreds of millions of dollars (euros, pounds) in oil royalties banked in London and aid to Chad. Chad retaliated by threatening to shut off its oil pipeline, setting Sunday as a deadline.

In its statement Wednesday, the bank said it would resume paying out some loan money for education, health, community development, AIDS programs, agriculture, electricity, water and infrastructure.

The World Bank statement said Chad had in turn agreed to pass a 2006 budget law "that will specify that 70 percent of the oil revenues will be used for priority poverty programs." Once that is achieved, the bank said it would start reversing its freeze of the oil revenue account.

The World Bank had helped finance oil industry infrastructure after Chad agreed to observe stringent rules on the use of revenues. The World Bank argued that agreement had been breached when Chad's parliament voted to allow the release of more revenues to the government's general budget instead of channeling them to health, education and infrastructure.

Chad has argued that it needs the money to arm its military and other security forces to fight a six-month rebellion that began in eastern Chad.

In its statement Wednesday, the World Bank said security spending would be funded from the general treasury under the interim agreement, reports the AP.

I.L.