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Last Updated: Friday, 6 January 2006, 15:46 GMT
World Bank suspends loans to Chad
Welders working on Chad oil pipeline
Chad's plans for its oil revenues have come under fire
The World Bank has suspended all loans to Chad, saying the African country's government had breached an agreement over oil revenue controls.

Bank president Paul Wolfowitz announced the move, one of the most drastic the bank can take against a member country.

He accused Chad's government of acting "unilaterally" after it voted to relax controls on the use of its oil profits.

The bank had lent Chad more than $39m (23m) on condition that non-government groups checked its use of oil revenues.

The private sector arm of the World Bank, the International Finance Corporation, also lent another $100m and mobilised a further $300m for the pipeline.

Spending row

The World Bank said the move aimed to ensure that money generated from oil was used to reduce poverty in the country, as the loan would be used to help build an oil pipeline with an estimated cost of $4bn.

However, the bank's demands prompted protests from Chad's government, which last month accused the organisation of acting like a coloniser and of using the country's people as guinea pigs to test different types of management.

"We've been trying for some time to open dialogue with the government of Chad to see if the concerns that they have expressed can be addressed, and regrettably instead of engaging in dialogue they have proceeded unilaterally," Mr Wolfowitz told the Reuters news agency.

"We haven't given up on dialogue and hope in fact that perhaps if they stop and appreciate how serious the issue is from our point of view and not only from theirs, we can find some common ground," he added.




SEE ALSO:
Chad angry at World Bank over oil
30 Dec 05 |  Business
Chad being 'cheated of oil dues'
08 Oct 04 |  Business
Chad's oil watchdog 'powerless'
25 May 04 |  Africa
Chad set for oil production debut
29 Nov 02 |  Business


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