Poverty, Petroleum & Policy Intervention: Lessons from the Chad-Cameroon Pipeline

The ‘resource curse’ -- the tendency of resource wealth to impair natural resource exporting countries on various economic and political dimensions -- has shown some of its strongest manifestations in Africa's petro-states. For this reason, the World Bank's recent attempt to engineer an accountable and transparent oil economy in one of Africa's poorest and most corrupt countries -- Chad -- deserves close scrutiny and critical analysis. Although the World Bank has conducted the Chad-Cameroon Pipeline Project with the belief that the ‘resource curse’ can be mitigated through sound economic and fiscal policies, the results thus far suggest that Chad is doomed to repeat an all too familiar fate of economic turmoil and political strife. This article draws on the disappointing realities since Chad's first oil exports, and examines three major factors underlying Chad's unsuccessful conversion of oil revenues into poverty reduction: institutional capacity constraints, socio-political incompatibilities, and subversive interactions with external lenders. Although the majority of critics attribute the project's failures to the World Bank's policy choices and management, this analysis suggests that the project has been hindered more by the external nature of the World Bank's policy intervention than by any particular design flaws. Given the shortcomings of the Bank's intervention, this article considers plausible revisions to the project, and draws policy implications for future development endeavours of this nature.